March 21, 2007

Brown doubles tax on low paid

If Gordon had wanted to give a tax cut that would have really helped people then instead of removing the 10% tax band and making everybody pay at the 20% rate, he would have removed the 10% tax band and then not made them pay any tax at all. I don't yet know how this will effect the marginal withdrawal rate for the low paid but I doubt that it will help them and expect that it will be even worse than before, creating even more of an incentive not to work or if they do work not to work any more than currently. The headline might be a tax cut, but remember this is revenue neutral as the government cannot afford a tax cut because it is broke (not that Gordon Brown would be really want to) so the money has to come from somewhere and Gordon decided to take it from those that can afford it least because their votes are already guaranteed to go to Labour. This isn't Gordon Brown being generous, this is Gordon Brown attempting to gather some good feelings to counteract his consistently poor poll results compared to David Cameron. No surprise there then.

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