People earning less that £10,000 a year would not pay income tax under proposals supported by East Surrey MP Peter Ainsworth.
The proposals, put to the House of Commons by Conservative colleague Geoffrey Clifton-Brown, and formally backed by Mr Ainsworth, would mean that people who earn less than forty-five per cent of average earnings would pay no income tax at all.
Welcoming the move, Peter Ainsworth said, “People on the lowest wages are disproportionately the youngest workers and the elderly. It is morally wrong to tax such low wages, and only acts as a barrier to those seeking work.
“Under these plans the tax bill for the poorest in our society would be reduced by almost £900. Tax should be simpler and fairer, and these plans achieve exactly that.”
Introducing his Ten Minute Rule Bill to the House of Commons, Geoffrey Clifton-Brown said, “This Bill, a Bill designed to take people living in poverty permanently out of the income tax system, can be supported by all sides of the House. Helping our lowest paid workers is not a party-political issue, it is a moral good.
“And this is, I believe, a practicable proposal, and a modern manifestation of the proud Conservative traditional of offering opportunity to the most disadvantaged in our society.”
Geoffrey Clifton-Brown proposes to permanently abolish income tax for those earning least, which on the basis of current figures includes all of those whose income is £10,000 per year or less.
Their income tax bill would be reduced by £872.30 per year, which would substantially increase their disposable income, provide an incentive to work, and improve their standard of living.
To make the proposals included in this Bill workable, he suggests the adoption of a system to ease those whose income is between £10,000 and £15,000 per year back into the existing income tax system by decreasing their new tax allowance by one pound for every additional pound they earn. This would mean that those earning between £10,000 and £15,000 would pay half the amount of income tax that they currently pay, whilst those earning more than £15,000 would be taxed according to the existing system.
Geoffrey Clifton-Brown said that the reforms could be undertaken without significant reductions in Government revenue due to the increase in indirect tax revenues, the decrease in welfare costs as people move into work, the increase in National Insurance revenues, the savings in Government bureaucracy, and the tackling of tax-avoidance problems. The reforms should result in increased economic growth. |
