Azara Blog: Lib Dems propose yet another random change in fiscal policy

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Date published: 2009/04/20

The BBC says:

The Liberal Democrats have said they want to cut the amount of income tax paid by most workers by £700 a year.

The party proposes raising the threshold at which people start paying to £10,000, with all those earning under £100,000 paying less.

BBC political editor Nick Robinson said this move replaced the commitment to cut the basic rate of income tax by 4p.

But Labour said it was "policy on the hoof" by a party which had changed its tax policy twice in 12 months.

Introducing the proposal Liberal Democrat leader Nick Clegg said "big businesses and millionaires" would make up the shortfall in revenue.

It was "nonsense" to say cuts could not be brought in during a recession because a "tax switch" was "affordable", he said.
It estimates the overall cost of the pledge will be £17bn a year - slightly less than the cost of the previous pledge to cut 4p in basic tax, which was estimated at £19-20bn.

The Lib Dems say they would find the money through raising taxes on richer people, for example cutting top rate tax relief on pension contributions, raising capital gains tax and closing some loopholes for companies and high earners.

It's amazing how "affordable" something is when you get someone else to pay for it. Needless to say, by trying to screw the "rich", the Lib Dems would end up taking in a lot less than the 17 billion they are willing to throw at tax cuts, since the really rich are perfectly capable of shuffling their money around to avoid tax. The Lib Dems keep trying to be seen as a populist party, with their perpetual attempt to come up with new ways to screw a minority to benefit the majority (hey, how principled can you get). Unfortunately they are just a bunch of muddled academic middle class no-hopers.

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