Monday, April 07, 2008

Scrapping the 10p tax band.

Labour are under fire for scrapping the 10p tax band and making poorer people worse off, richer people better off. I guess they've completely forgotten their socialist origins now.

Whilst I 100% agree with eliminating pointless extra complexities from the tax system (like the unnecessary 10p band that labour introduced and is now retracting) it should have been done cleanly - by raising the personal allowance sufficiently to ensure that no low earners were worse off - i.e. worse case was break even.

Trying to correct it by fiddling with tax credits that don't apply to everyone (more unnecessary complexities) was foolish.

I applaud labour simplifying our tax system but they deserve to be derided for sheer incompetence in doing so.

Next please can we bin NI entirely (since it hasn't been ring fenced for years) and increase basic rate tax by the same amount.

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