Miliband's 10p tax rate proposals

[Tangled up in Blue]

http://www.bbc.co.uk/news/uk-politics-21453444

This is an interesting one.
Presumably Ed. was anticipating it might figure in Boy George's March budget.
In any case it makes quite a nice Valentine's day gift to the voters of Eastleigh, rather undercuts the Lib/Dem's own mansion tax proposals and divorces Labour from Gordon Brown's "mistake."
Only trouble is it won't actually raise a lot of revenue.
Over to you.

 

[OldBlueLady]

Miliband is trying to appeal to Tory voters by blaming Gordon Brown. I think that's pretty poor coming from his successor to being leader of the Labour party.

 

[Crabby Shrimper]

I'd say he's got one eye on the next election, and believes there's a good chance he'll not get a majority. I think he's just paving the way for a coalition with the Liberals

 

[Neil_F]

Here's a prediction - it won't be in the Labour Manifesto for 2015.

Superficially it looks attractive, but the detail is a different story.

Introducing the starting rate of 10% for £1,000 of income above the personal allowance (which is what he suggested) would cost about £7bn per the IFS. That can be reduced to about £3bn if restricted to only basic rate taxpayers (again something he said yesterday). The problem with this is it drags more people into the 40% bracket.

The mansion tax would raise £2 bn (Policy Exchange) but it has one monumental problem - every house in the country would need to be revalued. That would mean moving hundreds of thousands of houses up the council tax brackets such that they paid more. The most likely to move would be those earning around 40-50k i.e. those who will be moved into the 40% bracket.

Further to that, the 10% rate will save £100 per year. Except it doesn't. When tax credit withdrawl from higher net income is factored it it actually gives an individual higher income of £34 per year, which is 67p per week.

So it would mean hitting middle income families (the squeezed middle????) to deliver a negligible benefit to the lowest paid. I also suspect that a mansion tax wouldn't raise that much either. It would cost a fortune to administer and would depress property prices around the threshold. Good luck enforcing a charge on an owner tax resident in another country as well.

This is the problem with the tax and benefit system now; it has become so complicated that it is virtually impossible to change it without hitting some people hard for an ever diminishing benefit to another group.

 

[Uncle Leo]

I'd say he's got one eye on the next election,

If he hasn't got both eyes on the next election, he's in the wrong job.

 

[Tangled up in Blue]

Here's a prediction - it won't be in the Labour Manifesto for 2015.

I make you right on that.Probably because there will be a similar type of proposal in Osborne's March budget.

 

[superblue24]

The funny thing for me was more how utterly out of his depth Millibund looks when delivering speeches. I don't think you could rouse a **** with Ol' Ed's charisma

 

[Tangled up in Blue]

Miliband is trying to appeal to Tory voters by blaming Gordon Brown. I think that's pretty poor coming from his successor to being leader of the Labour party.

Interestingly,both Eds.were of course in the Treasury at the time GB made his decision.They advised him against going ahead but collective responsibility and all that.:whistling:

 

[Neil_F]

They advised him against going ahead

Did they? Do you have a source for that?

I can perfectly believe that post hoc they claimed to have advised him against it but I'd be surprised.

 

[Davros]

Thye could of course do this all without creating any hoo-ha, by playing some jimmery pokery with the tax codes, but that just wouldn't be politics eh!

 

[Tangled up in Blue]

Did they? Do you have a source for that?

I can perfectly believe that post hoc they claimed to have advised him against it but I'd be surprised.

It was mentioned in the biography I read on EM recently.Andrew Neil also made the same point yesterday in his Daily Politics show after interviewing Ed Balls live.

 

[Neil_F]

To answer my own question, this is from Anthony Seldon's biography of Brown:

“[Spencer] Livermore, a senior political adviser, was fiercely opposed, as Balls later claimed himself to be. Balls’s claim is strongly contested by those present at the time...a meeting between Brown and Balls resulted in the latter switching his position and becoming an advocate of abolishing the 10p rate; in return he received a “rock-solid” commitment that he would be given a department of his own.”

​

Pretty shameless and entirely in character for Mr Balls if true.

I've also just discovered that Labour have already pledged to levy a mansion tax and spend the £2bn proceeds on reversing the 1% uplifting of tax credits.

They appear to be spending the same notional money twice.

 

[dloman]

The mansion tax is a funny one to me, it strikes me as a tax on the South East of the country.(I am only guessing, but surely this where the majority of the 2m+ house would be)

 

[OldBlueLady]

The mansion tax is a funny one to me, it strikes me as a tax on the South East of the country.(I am only guessing, but surely this where the majority of the 2m+ house would be)

There's an awful lot in Cheshire and N Yorkshire as well! But I take your point.

 

[steveo]

They appear to be spending the same notional money twice.

Socialists spending money they dont have? Surely some mistake here.

 

[Mad Cyril]

I can't believe the government have taken my child benefits away.

The look on their faces on steak night (turkey mince night for them now) is heartbreaking.

 

[Benfleet A1]

£2million Mansion Tax, nice figure that. Red Ed misses paying that by £100,000. Lucky old him eh.

 

[South Bank Hank]

£2million Mansion Tax, nice figure that. Red Ed misses paying that by £100,000. Lucky old him eh.

Interesting indeed, but I'm really struggling with the mansion tax idea anyway.

In what way can it be justified that someone who has legitimately earned money, paid tax on that money at what's likely to be the highest rate of tax, then paid a large amount of additional tax on the purchase of property through excessively high stamp duty and gained a liability for a huge further tax burden should they then pass the asset on to their family on their passing, should then have to retrospectively pay further tax on their previously taxed purchase?

Am I missing the point here?

 

[Mad Cyril]

Interesting indeed, but I'm really struggling with the mansion tax idea anyway.

In what way can it be justified that someone who has legitimately earned money, paid tax on that money at what's likely to be the highest rate of tax, then paid a large amount of additional tax on the purchase of property through excessively high stamp duty and gained a liability for a huge further tax burden should they then pass the asset on to their family on their passing, should then have to retrospectively pay further tax on their previously taxed purchase?

Am I missing the point here?

Who said they paid tax on it?

 

[South Bank Hank]

Who said they paid tax on it?

Oh yes, I forgot. Anyone with a bit of money or something to show for it MUST have been fiddling...

Who says they didn't pay tax on it?

IF they didn't pay the due amount of tax, you chase any of THAT tax owed or you shut down any loopholes. Introducing a new tax burden on previously taxed income and property, just in case, doesn't cut it.