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10p tax review – a must



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Published Date: 16 April 2008
Any tax hike for those on low incomes is wrong.
Although the recent simplification of the tax system sees many low income families and pensioners better off there are some losers. That's why I have written to the Prime Minister, Labour Party Chair Harriet Harman and the Treasury clearly stating that something must be done to put right the unintended consequences of the change.

As a Labour MP I have been proud of the focus that our Labour Government has placed on improving incomes for those who have the least. We introduced the minimum wage, tax credits and boosted a whole range of employment rights. We targeted resources on poor families meaning 700,000 fewer children are now living in poverty and we aim to eradicate it by 2020. The Pension Credit system we introduced has lifted over two million pensioners out of poverty. These are all significant achievements although we always need to do more.

However, before talking about what needs to be done I firstly want to clearly identify the problem. Some of the recent stories being circulated are wide of the mark.

The tax simplification measures which have just come into effect ensure that some 16 million families will be better off and in particular pensioners over 65 and families with children will see a rise in their income.

The changes to the base rate of income tax (from 22 to 20p) combined with increased personal allowances and national insurance threshold mean that anyone who earns over £15,080 gains overall.

The substantial increase in Working Tax Credit means that all those who earn from £8,612 (30 hours a week on the minimum wage) up to £13,000 will be better off.

There are, however, those who lose out. Those who earn between £13,000 and £15,000 a year will lose out by a small amount – less than £1 a week. There is also a group who work less than 30 hours a week who will be worse off from the abolition of the 10p band. However, the maximum loss for someone who works is £152.40 a year (£2.93 a week). This would be the case for someone earning £143 a week. Clearly much less than the £500+ figures that have been bandied about.

But the simple fact is that a significant number of people in Hastings fall into these income brackets and they cannot afford to lose anything. I have therefore been forcefully calling upon the Government to find a solution. Indeed I produced a policy paper suggesting a solution which can be obtained by contacting my office.

Those on low incomes must always be a priority and I can assure you I will continue to demand a solution that addresses these unfortunate unintended consequences.

I want to finish, however, on yesterdays visit by David Cameron. I understand the Conservatives are suggesting we reinstate the 10p rate but without explaining how they would fund the £8billion it would cost. £8billion is simply not affordable in the current global financial climate. That money has already been redistributed so we need to find a solution that targets simply those who have lost out.

No one can seriously believe the Tories care for the less well off when you consider the spiralling poverty they oversaw in the 80s and early 90s. Its not David Cameron's fault that he's a rich Old Etonian. But it is his fault that he opposed the minimum wage, that he opposed tax credits and was previously considering a flat tax (meaning those on the minimum wage and millionaires pay the same). Hardly policies that have the best interests of Hastings at heart. His 'crocodile tears' fool no one.

The full article contains 623 words and appears in n/a newspaper.
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  • Last Updated: 17 April 2008 11:49 AM
  • Source: n/a
  • Location: Hastings
 
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bart simpson,

17/04/2008 08:20:52
Re Post Office Closures and other new labour spin

Michael have you been telling more
Great Big Whoppers!

FOSTER and CRONIES OUT
2

parker,

17/04/2008 08:54:19
How much do councillors get in expenses?
M.P'S wages and expenses? How Much??
Highly paid researchers (new labour) How much??

The ordinary hard working Hastings Resident..Not that Much!
3

O.M Riley,

17/04/2008 08:59:34
Michael, as your new labour crocodile, has used up all his tears, perhaps he can borrow some from Mr Cameron.
After all,new labour have borrowed policies from the Tories, so I am sure that they wouldn't object!
4

,

17/04/2008 09:27:43
Comment Reported Unsuitable By User
5

Darryl,

Hasting 17/04/2008 09:30:27
CONT : cornucopia of waelth compared to them! A case of those on glass houses shoouldn't throw stones !
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Darryl,

Hastings 17/04/2008 09:54:21
FLAT TAX

As a solicitor , I can quite understand why Michael is unable to grasp the concept of flat tax. Those countries ( to which it was appropriate ) , have found that ordinary workers pay less tax , as more wealth is created and millions are saved by having a simple tax system.

I understand that it was Osborne , not Cameron who was looking at the poetntial for such as system. Indeed is that not the duty of a Chancellor ..to look at new and more efficient ways of doing things whether or not they are adopted ?

We now have the highest taxes in the developed world , and all Mr Foster can do is attack the opposition instead of coming up with solutions.

Clearly our MP is past his sell by date. Time for re-cycling !
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Googling,

17/04/2008 10:40:01
Darryl

flat taxes
Do not necessarily result in ordinary workers paying less - surely it would depend at what rate the tax was set comparative to what came before? However the main concern on this is the complete inequity that would result from everyone paying the same tax - investment bankers and street cleaners paying the same? personally i don't see the benefit to society

Highest taxes in the developed world?
total fiction - our overall tax burden in the UK is roughly 42% of GDP - the lowest in the major economies except for the USA (which has huge wealth disparity and extreme poverty as a result). France is 45%, german and italy something similar and the scandanavian countries are all over 50%.

its all very well to say you want a classless society but how then do you bring this about? you say raise allowances - fair enough but shouldn't benefits be targetted upon those who need it? raising allowances benefits everyone and costs money that could otherwise be spent on public services

if you want good public services they must be paid for and that means tax. i'm not saying raise taxes but to pretend you can cut taxes and get good hosptals and schools for everyone is a joke
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Darryl,

Hastings 17/04/2008 11:34:22
Googling

You need to look at the countries who have flat tax..its a fact that ordinary people have benefited. I admit its a complex issue. I'm not saying that is the solution for the UK ..but it should be looked at as should any other way which could result in a more efficient system.

I don't agree with the figures that you supply ..but it depends on what you class as tax. Ie. My definition includes Income tax, VAT and Council Tax. I must admit that I didn't include the Scnadinavian countries. Maybe I should have stated leading developed countries.
Your point on wealth gaps. Since the 11 years of penury with Labour the gap between rich and poor has increased markedly. That is an indeputable fact !

Raising allowances does benefit everyone ..but not proportionately. Poorer earners would gain and very low earners would not be even in the direct tax system.

Yes money has been spent on the public services by Labour. But this has been squnadered by the present government. Spending does not relate to better services. We need refom and efficiency. Not more crippling taxes for the fiscally incompetent government.

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Darryl,

Hastings 17/04/2008 11:45:28
HIGH TAX BRITAIN :

Besides the increasingly crippling individual taxes on individuals I note with concern that a FTSE 100 company , Shire Pharmaceutical Group is to move offshore to escape " the country's increasingly heavy tax burden". A new first for Labour !

This is of concern to us all. We will loose tax revenue and potentially in the future, jobs. Other companies are thinking of doing so. It is time for the government to encourage industry ..not drive them offshore !

This has serious implications for the UK .

We have been warned. We need to get this incompetent government out!
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Darryl,

Hastings 17/04/2008 12:01:36
ANOTHER LETTER FOR MICHAEL TO WRITE !

In today's papers :

Half the country hasn't an NHS dentist ! Thousands are now turning to hospital emergency departments for treatment because they cannot find a dentist due to the Government's bungling of the Dental contract negotiations.

Said Michael Summers of the Patients Association " This really is a scandal. People tell us it is almost impossible to find an NHS dentist in many parts of the country ". Quite.

And if you can get a check up it will now cost £15.90 instead of £6.00 !

Another Labour first.

Get you pen out Michael ..a letter to the Health Secretary is called for !

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