With bottomless cynicism, Cameron relies on public ignorance on tax. Like the Liberal Democrats, he hopes most people are clueless as to the true effect of raising the personal threshold. It sounded so progressive when he said that no one on the minimum wage who worked 30 hours would pay tax when the threshold rose to £12,500 in 2020. Surely that’s good for low earners? Well, it delivers them £176 a year. But when you ask the IFS who gains most, the great bulk of the colossal sum already spent on this – more than £10bn – went to people in the upper layer of the top half of earners. Only a quarter went to the low paid. This next threshold raise will cost £5.5bn, and again the bulk goes to higher- not lower-earning households. Cameron’s other pledge is to lift to £50,000 the threshold before people start paying the 40p rate. That will cost £1.5bn and mostly go to those already earning more than £50,000. “The vast majority goes to the highest 10% of earners,” says the IFS’s James Browne. So there you have it: the feast is for Conservative core voters; famine for those least likely to vote Cameron. The windfall for the better-off comes cleverly disguised as kindness to low earners.
Posted on: Tue, 27 Jan 2015 14:32:25 +0000
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