Stop the Lib Dem's 'poll tax'
Bizarrely, the Lib Dems
have managed to create an impression that they are to the left of Labour,
through mendacious media spin and half truths.
A good example of how
they present a thoroughly regressive policy as if it is progressive is the Lib
Dem's proposed "local income tax"
At the launch of the
Lib Dem's general election manifesto, leader Charles Kennedy stuttered and
stumbled when pressed to name the household income at which people would pay
more tax under their proposed local Income Tax. And then he pronounced the
figure of just £40,000.
And remember this is
household income. This means that in multiple occupation households where people
are on low incomes, they will pay more! For example, four people sharing an
inner city terraced house and each earning £15,000 a year would pay much more. A
working class family, earning just average wages, but where they have an adult
child in work would pay more.
The Council Tax is far
from perfect, but the biggest problem with it is that Gordon Brown has refused
to increase income tax on the rich, and therefore has sought to shift the
taxation burden for local services from national to local government. Excessive
increases in council tax hit pensioners and those on low income hardest, but
this is a political choice by New Labour to preserve low taxes for the wealthy.
Local councils no longer keep monies raised from the business rate. The Lib Dems
do not intend to redress this.
And the Lib Dem's local
income tax is thoroughly regressive. It will increase tax by a flat average of
3.74% in addition to the current tax rates of 10%, 22% and 40%.
This means the 10% rate
goes up to 13.74%, an increase of 3.74%.
The 22% rate goes up to 25.74%, an increase of 1.74%
The 40% rate goes up to 43.74%, an increase of 0.94%
And the Lib Dems say that their local income tax will not apply at all to income
Let us be clear, the
biggest increase of income tax burden would be on the lowest paid, and the
lowest increase would be on the highest paid.
What is more the Lib
Dems propose that no local taxes at all should be paid on second homes. This
would mean that the provision of local services for those rich enough to own two
homes would be absolutely free for their second home. In rural areas suffering
the blight of the rich buying holiday homes this would be devastating. Areas
such as Cornwall and Devon where there are high numbers of weekend homes for the
rich suffer from low wage rates, and due to the dispersed rural population the
cost of providing services is higher than average. Under Lib Dem proposals the
tax burden for providing weekend retreats for the rich will fall on the
shoulders of low paid rural workers. This is a return to the middle ages.
What is completely
absent from the Lib Dem's proposals is any grasp of wealth inequality. Their
local income tax is a flat rate, and they take no account of wealth other than
income. They calculate that 8 out of 10 pensioners may benefit, but this is only
because most pensioners have extremely low incomes. Any benefit for pensioners
would of course be welcome, but this is shallow opportunism on the Lib Dem's
part because the hardest hit by their scheme will be working families on low
This is no accident.
The Lib Dems are a thoroughly Thatcherite party. They originally opposed the
minimum wage when it was introduced, and have opposed increases in it. They are
deeply hostile to trade unions, and their manifesto includes a pledge to ban
strikes in "vital areas". They oppose state intervention to save jobs. They are
deeply undemocratic and are in favour of key levers of the economy being handed
to unelected bankers, indeed their advocacy of Euro membership will further
shift control away from democratic accountability.
The weakness of the
left in not standing up and damning the Lib Dems as a Tory party is deeply