This is what should happen.
If the Tories want a morally sound and hugely popular tax policy, they should scrap the whole thing and instead cut the taxes of the very poorest. As far as I’m concerned, it’s nothing short of obscene that workers on the minimum wage pay income tax at all, and then have to beg pitifully to be allowed some of it back – assuming they’re eligible, that they can understand the forms, and that they can get over the worry that an incompetent state machinery will pay them too much, and then send the bailiffs round.
Tax credits make their recipients suffer the highest marginal tax rates of any group in society. They show what happens when a man with no imagination and too much faith in his own intellect is allowed to design a policy. Most importantly, as far as the Tories go, they are a policy that has sticky Brown fingerprints all over them, and one that Labour could never disown.
The replacement should be a non-traditional tax cut, aimed squarely at those at the bottom of the workforce. If the Tories scrap the £15bn that tax credits cost, and can fire a further £35bn worth of Gordo’s army of useless numpties, they could afford to raise the personal income tax allowance to a whopping £15,000. If you\’re concerned that vital services would be devastated, just remember that no one really noticed when they were all hired, so it would be surprising if anyone noticed when they get fired. This cut would free those working a 48-hour week on the minimum wage – or up to £6 per hour – from paying any income tax at all.
Nothing could be more powerful, or more attractive. It would be the great symbol of the new Toryism. It would be a slap in the face for Labour’s pretence to be the party that looks after the poor. Every piece of syrup-brained interfering middle-class leftism of the last half-century, from inhuman council estates to ‘progressive’ schooling, has hit the poor hardest. It could be the start of the roll-back – if Cameron has more bottle than Brown.
Guess which political party already advocates this? UKIP.