Left-Wing Think-Tank Wants Labour to Tax the Poor More

The best policy idea to come out of LibDem conference was Danny Alexander’s call for tax thresholds to be raised to £12,500, effectively taking minimum wage earners out of income tax. Reversing Gordon Brown’s complicated tax – the – poor – and – pay – them – benefits strategy. Brown effectively and deliberately made those in work on low earnings recipients of welfare benefits. Brown wanted everyone to be on state benefits (welfare “universalism”) for purely political reasons so as to maximise buy-in from all classes into the welfare state. Hence the cynical Brown/Balls attachment to child benefit for millionaire mums and winter fuel allowances for Michael Winner.

Raising the tax threshold is simple, has popular appeal and will benefit those on low earnings proportionately more than those on higher earnings. It will take some pressure off the “squeezed middle” and won’t increase the welfare trap. It isn’t a perfect policy, prominent Orange-booker Mark Littlewood, a wonk the Institute for Economic Affairs, is wary that it will result in millions of voters being unaffected by the basic rate of income tax who therefore won’t be incentivised to vote for parties and policies that favour lower taxes. He fears that low-earners will have no reason to buy-in to tax cuts if they are taken out of the income tax bracket entirely.

ippr

The organised opposition to this policy however is coming from the left-wing, EU-funded think-tank IPPR. The IPPR was founded and funded by the unions back in the Kinnock era to drag the Labour Party to the centre, in the post New Labour era and under new management it is dragging the Labour Party away from the centre towards the left. IPPR is arguing against raising tax thresholds because it won’t help the poorest who are on benefits and not working. This criticism cuts no ice because tax cuts, by definition, are designed to help taxpayers. IPPR argues that targeting benefits, sprecifically towards childcare, would be more effective and cheaper. It is as if they are speaking a different language, the problem of welfare dependency won’t be solved by paying out more benefits.

Nevertheless Guido wishes IPPR well, their wonkish sophistry may well appeal to Ed Miliband. If in 2015 the coalition parties are standing on a platform of reducing taxes on the working poor with the Labour Party standing on a platform of taxing the poor, Miliband will be on the wrong side of the dividing line. “Vote Labour and tax the poor” is a winning campaign slogan – for the coalition parties.




Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

President Trump on May’s Brexit deal:

“I would say that Brexit is Brexit. … The people voted to break it up. So I would imagine that’s what they’ll do. But maybe they’ll take a different route, I’m not sure that’s what they voted for.”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
Paul Mason Reported to Police Paul Mason Reported to Police
Etonian Free Cabinet Etonian Free Cabinet
Tory MP Puts Letter In to Brady Tory MP Puts Letter In to Brady
Lord Carrington Lord Carrington
Poll: May’s Deal or No Deal? Poll: May’s Deal or No Deal?
Labour’s Chequers Survival Kit Labour’s Chequers Survival Kit
Whips’ Patsies in Full Whips’ Patsies in Full
Tories Will Lose Votes if They Cross Brexit Red Lines Tories Will Lose Votes if They Cross Brexit Red Lines
Remain Used Same Spending Tactics as Leave But Far Worse Remain Used Same Spending Tactics as Leave But Far Worse
Paul Mason’s Coming Home to England Paul Mason’s Coming Home to England
Penny’s Sign Language at Despatch Box Penny’s Sign Language at Despatch Box
Lefties Disappointed as England Win Lefties Disappointed as England Win
SNP Plot to Ruin England Match SNP Plot to Ruin England Match
MEPs Vote to Reject Transparency MEPs Vote to Reject Transparency
Labour Reinstate Jared Labour Reinstate Jared
Hancock Jumps on a Wall Hancock Jumps on a Wall
PM Runners and Riders PM Runners and Riders
Cabinet Brexiters Silent as Robbins Rubs Out Red Lines Cabinet Brexiters Silent as Robbins Rubs Out Red Lines
Cadwalladr and Collins to Share Platform at Byline Festival Cadwalladr and Collins to Share Platform at Byline Festival