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Woo Income tax down to 18%
Read more about: Economy, Labour Party
A move of desperation or a stroke of genius or a bit of both. But Pat Rabbitte’s signally that Labour will cut the lower rate of income tax by 2% is certainly putting the cat amongst the pigeons. Saying that they will cut the lower rate where as the PD’s will cut the higher rate is another rallying topic stemming from the old class war rhetoric. To tell you the truth I am in shock here (as much as a tax policy really can do). While personally I think a cut in VAT would be better (also less headline grabing). As a pure political stroke this is brilliant something I didn’t think Rabbitte had in him. Lets see what the PD’s do about this.
Interesting - I think it fits in well with Labour’s claim of being a left (of centre) party - something they had failed to justify in recent months in my opinion… it was also the only stick they had to beat the Government with after the last Budget, so it made sense for them to make promises to act on the “injustice” rather than just point it out.
That said, there is a huge benefit to it too (besides the obvious public support) - The PDs (and, FF to a lesser extent) have used taxation as a way of talking voters away from Labour - saying they would up income tax to higher levels (along with corporation tax).
Where before Rabbitte could only reply by saying they wouldn’t make any changes to taxation levels; now, of course, he can say that on the contrary the party is pledging to lower taxes, and more importantly, it’s promising to lower the tax that effects the harder off in society, rather than the better paid group that McDowell has been (re)promising the 40% rate to lately.
The PDs were doing what they were doing because they do not have any supporters who do not pay the top rate of tax. Which should be seen as an admission of failure in that so many still pay at the higher rate and that so few support them.
I don’t pay the higher rate of tax dan
Neither do I any more but there are temporary reasons for that (Research is no way to make you a millionaire), I would have pay at the higher rate previously and would be again once back in the regular work force or so I’d hope. It is strange that the PDs were 20 odd years ago very focused on the ordinary taxpayer. Now, they are focused on only the top rate.
Many of the people who would have benefitted from cuts in PAYE are out of the tax net already, it would not matter to them if the rate of income tax is 8 percent or 18 percent.
If the labour party really want to make a difference, they need to change something else, increase the ceiling for medical card eligibility or bring the drugs payment scheme cost down.
Reducing vat will only benefit retailers, who will undoubtedly keep the VAT reduction for themselves and will be of no benefit to anyone.
squid, both Labour and FG are both committed to increasing the number of medical cards and through that the number of people who have access to free medical care. I’m not at all sure why you’re talking about VAT?
Interesting to hear Michael Martin tonight accuse the Labour Party of initiating “auction politics” Why is that when Pat Rabbitte announces his policy to cut the lower rate of tax by 2% he is accused of auction politics. However when Brian Cowen announces a further cut in the high rate of tax in next years budget he is not engaging in the same. This proposal by the Labour Party will benefit the lower and middle income earners.
“I’m not at all sure why you’re talking about VAT?”
I mentioned VAT because at the bottom of the post simon said that reducing VAT would be a better idea.
Right enough.