In his letter to the Courier last week (Morally wrong and no sense 29 March 2013) Cllr Adam Wilkinson lambasts the coalition, claiming millionaires are getting a tax cut whilst benefits are reduced.
I’m fed up with Labour politician’s trying to claim the moral high ground over taxation issues so lets get some facts straight.
Over the five years of this Parliament a millionaire (earning £1m p/a) will pay £381,000 more tax on their income (income tax and NICs) than they did under the last five years of the Labour government. That’s because the current rate of income tax for high earners (45%) is higher than almost every day of the last Labour Government (only 40%). Income tax is just one form of taxation, and Coun Wilkinson should be reminded that the rate of capital gains tax has been increased to 28% for high earners. In addition there are new stamp duty charges on large properties over £2million, and a cap on the maximum the super rich can claim in tax reliefs. When we look at the whole picture of taxation millionaires are contributing more to reducing the defect then ever before. Contrast this with Labour who cut Capital Gains Tax for the richest every year, slashing the rate they paid from 40% to 18%. If that wasn’t bad enough Labour attacked workers on a low income by cutting the 10p tax rate when in office. This left more half a million low-paid workers worse off. Under Labour, the poorest fifth of the population paid a greater proportion of their income in tax than the richest fifth. We need to build a stronger economy and a fairer society, I believe that means ensuring that hard work is rewarded. That is why Liberal Democrats in government have given a £700 tax cut to working people on a low incomes, and recently announced Labour it seems would rather defend a something for nothing welfare culture.
Coun James Baker