Wednesday, 25 March 2009

LibDem says tax the poor, not the rich

Lib Dem candidate, Peter Carroll, has stuck two fingers up at people on low incomes in his commentary on the credit crunch. The latest copy of their Focus has him saying that the reduction in VAT should not have happened and that there should be a reduction in income tax instead.

Anyone with a basic understanding of economics knows that VAT is a regressive tax and income tax is progressive. The lower your income the greater the impact of VAT on your spending power, i.e. his idea will hurt pensioners, the unemployed etc. rather than people on higher incomes. On the other hand income tax payments increase the more a person earns and reducing income tax means that the rich get richer.

I find it quite bizarre that Maidstone LibDems are backing such an appalling stance. So much for their claims of being progressive!

This is the transcript:

Peter Carroll said, "I agree with Vince Cable that the VAT cut was a waste. The Government should have cut Income Tax instead. Such a move would have given people more spending power which would have helped local businesses."

1 comment:

Robert said...

I think the tax policy they're referring to is this one: http://www.libdems.org.uk/home/cuts-in-income-tax-needed-to-boost-economy-cable-72471941;show

In short they want to decrease income tax on low and middle income earners paid for by closing tax loopholes for the rich. I don't have the article but they might not have made that clear.