Friday, 18 July 2008
Nick Clegg's tax rises
So despairing are some Conservatives about David Cameron's embrace of tax rises that they are giving house room to Nick Clegg's pretensions of being a tax cutter. In one sense, you could credit Clegg with being the heir to Margaret Thatcher: after all, her income tax cuts were paid for by a hike in VAT. In fairness, Clegg's proposals are more progressive. But Clegg is promising two tax rises that will hit middle earners hard: an extra £1000 a year tax for £50,000 earners contributing 10% of their income to pension (something that will particularly hit those who save for old age without employer contributions) and a big rise in council income tax (for many, it will be over £1000) to boot. For them, this is a tax rise. There is certainly a case for raising the threshold at which people pay tax - perhaps by removing some tax credits - but I do wonder how many Lib Dem voters realise that for them, Clegg's tax 'cuts' would leave a big hole in their pockets.