Under the proposals, the current income tax threshold would be raised to £10,000 which would mean four million low paid workers and pensioners would no longer have to pay any income tax.
That\’s the good news, although for both logical and moral reasons it should be linked to the minimum wage full time, full year earnings. Somewhere in the £11,500-£12,000 bracket.
The moral reason is that if we have a law stating that you cannot sell your time for less than this then it is immoral (in the limited sense that a taxation policy can be immoral) for the government to take a slice of this.
There\’s a logical part too: the Joseph Rowntree Trust has done a couple of surveys asking what people thought was a reasonable definition of poverty. The pre tax number was around £13,400: which equates very nicely to that £11,500 or so post tax. (Please note that JRT was asking the right, Smithian, question about poverty: a linen shirt is not a necessity for a working man but if the society assumes that a linen shirt is indeed such a necessity and a working man cannot afford one then by the standards of that society the working man who cannot afford one is indeed poor.)
This however is insane:
Mr Cable will detail a new 0.5 per cent levy on the value of properties over the £1 million threshold.
We have huge regional variations in house prices. This is thus more a tax on living in a certain region than it is upon being rich as stink.
Actually, that\’s true of our incomes and income tax system as well, but that\’s another matter.