28 September 2011

Only Labour could say cutting tax for the low paid is regressive

Labour are determined to have a monopoly on progressive politics. That can be the only conclusion to be drawn from a frankly bizarre report by the IPPR (reported on Lib Dem Voice) that implies that raising the threshold when low paid workers start paying income tax is regressive. It appears to be based on the assumption that any further rises in the threshold don't benefit those already benefiting from the zero tax rate who by definition are the poorest of the working poor.

This is ludicrous sophistry of the highest order and the sort of rationale that led to Gordon Brown adding layer upon layer of complexity into the tax and benfits system in the name of being 'progressive'. The result is that now the highest effective rates of tax aren't paid by those at the top, but those at the very bottom, because of the steep tapers in the withdrawal of tax credits/benefits.

The IPPR are Labour's favourite think tank. And it's not hard to see why. This report's author was Kayte Lawton who is a regular contributor to Labour List, secretary of the Barnsbury ward Labour Party and the organiser of Islington South and Finsbury Labour Party’s policy forum.

Frankly, it's time Liberals abandoned the word 'progressive' and leave it to Labour and their friends on the left who can carry on in a futile exercise of trying to prove that only they are keepers of the faith. Meanwhile Lib Dems in government can get on with the job of making life better for people at the bottom of the heap and undo the 13 years of useless policy making - no doubt advised by the IPPR - that saw the gap between the richest and the poorest rise to record levels.

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