Yesterday was a very bad day for the airlines industry and the LibDems have chosen today to confirm the introduction of a ‘take-off’ tax that could add £35 to the cost of every airline ticket. Gaz-guzzling cars will see a near 1000% increase in vehicle excise duty. The LibDems’ Vincent Cable hopes to raise another £4.5bn from removing allowances on capital gains tax – changes that will devastate the incentive to innovative. Wealthier Britons will also be hit by changes to pensions allowances, stamp duty and inheritance tax.
In return for all of this the LibDems promise a 2p cut in the standard rate of income tax.
Vince Cable’s plan to abolish the manifesto commitment to introduce a 50% top rate of tax may not win approval from next month’s LibDem conference. Evan Harris is campaigning for a LibDem commitment to tax all income over £150,000 at a 50% rate. Even if Cable overcomes Harris’ resistance the tax burden on higher earners will treble under the LibDem plans.
Shadow Chancellor George Osborne has attacked the LibDem plans and
questioned whether the devastating changes to CGT could begin to raise
the revenues that are included in the LibDem figures.
Related link: Ming wants a 21st century dominated by the left
11.15am update: Mark Hoban MP, Shadow Financial Secretary, issued this statement yesterday: “The Liberal Democrat tax plan looks typically ill thought out and would mean soaring tax bills on hard-working families across Britain. Allowing town halls to impose a local income tax would mean even more money grabbed from your pay packet. Their plans to abolish tax relief on pensions would make Britain’s pensions crisis even worse and discourage people from saving. They are the kind of wild assumptions that only a party that knows it is never going to have to introduce a real budget will produce."