Tax the poor

[Gromit]

Changes to the Tax system mean that the lowest earners (Under �18,500) will pay more tax. They had previously been taxed on a low rate which the Government has now abolished. Meanwhile, those better off, will see their tax rate cut.

http://news.bbc.co.uk/1/hi/uk_politics/7333496 .stm

I never thought I would see a Labour government double the tax rate of the very poor.

Is this shameful?

[ludwig]

For a 'labour' government, yes it is shameful. I'll be interested to see if there are any New Labour supporters out there who are willing to have a go at justifying this.

[helpmetoo]

ah yes,

tax credits the parasite on the shoulder of responsible citizens

[sp1814]

I'm a Noo Labour supporter, and I'm shocked by this story.

Whilst it makes sense to simplify the tax system, I can't understand how they will be able to ensure that the lowest paid won't be adversely affected.

NL have a policy of reducing chiild poverty by 50% by 2010...perhaps this their way of funding it(?)

[ludwig]

I'm sure they'll meet that target SP. They'll probably have everyone over the age of 4 reclassified as a 'non-child'.

[youngmafbog]

I fail to see how removing the lower rate of tax simplifies things.

Want to simplify then remove the bewildering tax credit system that to me seems to have been deliberatley setup to put people off claiming.

Turns out my daughter because she is profoundly deaf can apply, but did anyone tell her - no, it was just because I happened on it when surfing. Also you try finding the calculation they use. I've still not found it so if anyone knows it I would be grateful. I am unable to claim a penny but I want to ensure my daughter is not swindled by McBottle and his fat cat cronies.

[scoobydooby]

I earn just over the said amount, so I'm hoping it won't affect me. Hubby is a higher earner but our income isn't brilliant when you consider that we're both working full time. We're not really skilled and only earn what most couples could if they both worked full time. However, did you know that if hubby were to move into a rented room down the road for say, �200 pcm inclusive (nothing to say he cannot eat meals at home - after all, he's entitled to see his children) I'd end up getting at least double that amount through tax credits ??? Ridiculous!!

A friend of mine, recently split from her hubby, has just bought a pair of GHD's - courtesy of tax credits. She said she'd never have been able to spend over �100 on straighteners whilst she was living with her husband!!!

[Lindylou]

Just worked out that I shall be �4.90 odd poorer each week. Nearly �20 per month. My income is the State Pension and an NHS pension of approximately �3,000 per annum. I really don't know how we will manage what with all the recent increases in Council tax, fuel prices, food prices etc etc. I'm sure my rent will go up shortly because of the increased interest rates. I'm getting really worried - almost frightened - as to how we shall manage in future. I'd like to leave Britain but no one would have us now as we're too old. The only good thing is that we can still rely on the NHS. Or can we..?

[ludwig]

I can't help noticing that the usual bunch of Brown supporters are keeping strangely quiet on this topic.

[New Judge]

What intrigues me somewhat about this issue is that it was actually announced more than twelve months ago in last year�s budget. Now, two days after its introduction, we (allegedly) have MPs jumping up and down and threatening rebellion. The time for them to jump up and down was last year when they voted on the Finance Bill that followed the budget. Now is too late and their action smacks of posturing.

We mere mortals should not be at all surprised at the measure. The government�s argument is that �many� people will be better off when the effect of Tax Credits and benefits are taken into account. That�s because they would like all the electorate to become ever more dependent upon the state for their existence and consider that people who are simply trying to provide for themselves and their families (and so keep as much of their hard-earned as possible) are jeopardising that aim.

Someone working 40 hours per week for the National Minimum Wage of �5.52 will see their tax bill increase from �21.32 to �23.25 from this week. They will see a small reduction (of about 50p per week) in their NI contributions but overall they face an increase of some 9% in their deductions. Someone on a more modest income of �8,000 pa will see their tax bill increase by almost 50%.

Looking at linylou�s example, if she is not yet 65 and assuming she has the full State pension, then the tax bill on her �7,700 income will increase from �5.39 per week to �8.77 � an increase of some 62%. Meanwhile, of course (tax free) benefits rise in line with inflation.

Yes, there are winners and losers, but the losers in this instance can scarcely afford to lose a penny. MPs should have been up in arms on behalf of their low-income constituents last year. They were not, and that just about says everything there is to say about all of them of all parties.