Restore 10p tax-band, with cash from top rate windfall, says MP
Petrol-price campaigner and Conservative MP Robert Halfon is urging the Government to commit to restoring the 10p basic rate of income tax, which was abolished by Gordon Brown in 2008.
Research shows that a basic income tax-rate of 10p could halve the income tax bill for every British worker on the minimum wage.
A basic income tax-rate of 10p would also move minimum wage workers halfway towards earning the Living Wage in cash terms.
The Government has signalled that it will cut the 50p income tax rate to 45p in April 2013, with the goal of raising billions of pounds more in tax-revenue from the rich.
Mr Halfon said: “As the economy recovers, lower taxes for lower earners must become a moral mission for the Conservative Party.
“Conservatives have been criticised for reducing the top band of income tax to 45p.
“But what better way to show that this is a Robin Hood Government, than by using all the extra revenue that is raised to help the poor, and restoring the basic 10p rate of income tax?”
Restoring a 10p rate of income tax, between £9,205 and £12,000, would cost around £6 billion pounds per annum according to the House of Commons Library.
It would instantly halve the income tax bill of a British worker on minimum wage, and reduce the cash-gap between the Living Wage and the minimum wage by 50 per cent.
Mr Halfon has proposed paying for the move by recovering some of the £7 billion pounds in tax-revenue that was lost to HMRC, when Labour brought in the 50p income tax rate - i.e. that all the extra money generated should be ringfenced, to reduce the tax-burden on low and middle earners.
Mr Halfon said: “Under the last Labour Government, Gordon Brown scrapped the 10p tax-band.
“This crushed working people with a tax-rise of £232 a year.
“My new campaign, at www.CutTaxTo10p.com, is about lower taxes for lower owners and restoring the 10p income tax band.
“The best way of creating a sustainable Living Wage - without hurting jobs - is not by piling burdens onto business, but by cutting taxes instead.
For example, if income tax was cut to 10p, on all earnings below £12,000, workers would keep around £280 more in their pay-packet every year.
Instantly, it would move every single British worker on the minimum wage halfway towards earning a Living Wage, by halving their income tax bill.
Alongside the Universal Credit, this would help to end the poverty trap, and to make sure that work always pays.
Sign up to support the campaign at www.CutTaxTo10p.com
For all the latest news see Thursday’s (January 17) Echo.
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