Lower taxes for lower earners

As the Harlow Star reports, I am glad that the new Government has adopted the Liberal Democrat Election Policy to raise the tax threshold for lower earners: The full Coalition document, published today states:

"We will increase the personal allowance for income tax to help lower and middle income earners. We will announce in the first Budget a substantial increase in the personal allowance from April 2011, with the benefits focused on those with lower and middle incomes. This will be funded with the money that would have been used to pay for the increase in employee National Insurance thresholds proposed by the Conservative Party, as well as revenues from increases in Capital Gains Tax rates for non-business assets as described below. The increase in employer National Insurance thresholds proposed by the Conservatives will go ahead in order to stop the planned jobs tax. We will further increase the personal allowance to £10,000, making real terms steps each year towards meeting this as a longer term policy objective".

This is a great tax measure and a policy I have long supported. It is a morally just tax cut as it helps lower earners. It also takes people out of the poverty trap - in which they earn less by working because of the loss of benefits and high taxation. It is good too that the Government will be raising National Insurance thresholds so that NI contributions do not increase. Lower taxes for lower earners is the guiding principle of this new Government - and something every Conservative should support.

P.S. Remember Gordon Brown's abolition of the 10p tax rate. All the more surprising from a party that claims to be the party for the poor.

by Robert Halfon - www.roberthalfon.blogspot.com