By Paul Goodman
Follow Paul on Twitter.
Ed Miliband's pilfering of Robert Halfon's 10p tax rate restoration proposal, balanced out by his borrowing of Vince Cable's plan of a mansion tax on homes worth more than £2 million, is almost completely meaningless. The Labour leader is not committing to the measure if he wins a majority in 2015. (See Andrew Neil wring this out of Ed Balls above.) Since neither Ed knows what the Government's future spending plans are, and therefore haven't yet committed Labour either to keeping them or chucking them, it could hardly be otherwise.
All Miliband is saying that were he Prime Minister now, he would fund the 10p cut by the mansion tax hike. Which he might or might or not do. Most likely, voters would get the hike, but not the cut. However, it is a supreme waste of time following that train of ifs any further.
Which is a reminder that Miliband's announcement (cleverly concealed; no leak – which is a bit of a start) is not about economics, but politics. Which is where the story gets more interesting – a little bit, anyway. The Labour leader has three main aims, which are roughly as follows.
What about the merits of the 10p tax rate idea itself? Tim Montgomerie tweets that he likes the combination of it and more property taxes. I don't like the idea of complicating the system further, but can see the political merits of Halfon's plan.
Policy Exchange says that "under this proposal, net incomes for
low paid working families would only increase by 67p a week if they are
on in-work benefits. This is because of complex interactions between the
tax and benefit system".
Over at Coffee House, Ryan Bourne shares my concern about complicating the tax system, says that raising thresholds is better targetting, and points out that if, as Labour say, the policy would benefit lower earners only, this implies dragging more people into the 40p band. Miliband's plan may or may not happen after 2015, and it may confuse the Coalition in the meantime, but one thing is certain: he has just raised Halfon's profile even further.