10p U-Turn STILL taxes the poorest
Reuben and I couldn’t sleep, so we decided to go for a drive, pick up a Daily Mail and McD’s breakfast and see if that helped. On returning home, we read the frontpage of the Mail and decided to work out whether the Labour Party’s U-Turn really did help the poorest who were affected by the axing of the 10p band.
Proving that he has inherited his Papa’s hard sums genes, Reuben (with a teensy weensy bit of help) created the following spreadsheet to show the effect of Alistair Darling’s latest turnaround.
|2007||2008 Old||2008 New||Change on 2007||% Loss / Gain on 2007|
The table is very easy to read. On each income row you can see what tax was paid in the tax year 2007-2008, then what the abolition of the 10p rate changed that to. The third colum of figures shows the change from 2007 to the tax bands announced yesterday.
The obvious conclusion is that this doesn’t help the poorest at all. The ones who still lose out under the new tax bands are those who earn between £7000 and £10000. After that, the new £600 increase in the threshold means that income tax payers on an income above 10000 now are better off than in 2007.
So to summarise so far – Between £7000 and £10000 – worse off. More than £10000 – better off.
"But don’t stop there", said Reuben (or gurgles to that effect). The last column shows the percentage loss or gain in terms of the individual’s income. This column demonstrates that as a proportion of their income, the Chancellor is still taking away from those who earn £8000 as much as he is giving to those who earn £15000.
This from a party that claims to want to lift people out of poverty.
At this point Reuben had had enough, similar to most of those struggling hard to raise a family on £10000 or less, and burst into tears only to be consoled by his mother and what he could get out of her. "Drink up", said Papa. "Mr Darling has milked all the most vulnerable in this country already and given it to those who are better off. You get as much as you can right now before the Chancellor finds another source of income to fund his latest nightmare".
Labour’s 10p debacle – If even a four day old knows it’s a disaster, what hope have they got of convincing the electors of the UK, let alone Crewe and Nantwich, that they deserve to stay in power?
Update – Dizzy has the musical version of the analysis above.