From Tuesday's PMQ's (Col. 165 to 166):
Mr. Nick Clegg: ... Last weekend, the Prime Minister said that he was all in favour of aspiration. Could he explain to us exactly what is aspirational about a tax system that he has created in which the poorest 20 per cent. pay more from their income in tax than the richest 20 per cent?
The Prime Minister: It was because of all these things that we introduced the tax credit system, which is the means by which we take people out of poverty. We reward work for people who are in work, and for people who pay income tax it removes their liability by giving them tax credits instead. It is the means by which we bring greater justice, take people out of poverty and make work pay, and I hope that the right hon. Gentleman will continue to support the tax credit system, which is an essential part of our tax and benefits system in this country.
OK, I sat there with bated breath waiting for Clegg to point out that he was referring to the ludicrously high effective marginal tax rates faced by lower earners, especially those entitled to benefits, rather than the absolute tax burden on lower earners (or even the tax rate in isolation). The worst type of benefit is Tax Credits, which are withdrawn at 39p for every £1 earned gross, as well as 31% income tax/NIC, so the effective tax rate is 70%.
He could have pointed out that at annual earnings of £10,000 or £11,000, a single adult has about £20 a week in income tax/NIC deducted from his salary and then has to fill in a myriad forms to reclaim £20 in Tax Credits, thus seguing into the Lib Dems' sensible policy of upping the tax-free personal allowance to £10,000 (which has long been UKIP policy, of course).
Nope.
Clegg really did just mean the tax rate, as his follow-up question makes clear, i.e. he completely misses the point and a golden opportunity to hint that he might know what he is talking about:
Mr. Clegg: The Prime Minister talks about justice. He has not delivered justice or fairness in the tax system. He is the one who scrapped the 10p tax rate. It is his rules that allow a City banker to pay less tax on capital gains than a cleaner pays on wages. He is about to hit millions of average earners with higher national insurance bills. Where is the fairness, where is the aspiration, in any of that?
No H&S here lads
2 hours ago
1 comments:
They're all stuck in soundbiteland. Neither Cleggy or Brown have any interest in actually debating all this with facts. They just want to sound like they are scoring points. In any event neither of them has a clue how to make the points you make in a manner that is accessible to the masses. Neither has Cemeron come to that. And as for Osborne......
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