Thread by @NeilDotObrien

My Spectator piece on why we should put low and middle income families at the front of the queue for tax cuts - a quick thread (1/)

blogs.spectator.co.uk/2019/06/boriss…

Raising Higher Rate threshold benefits a bit over 4 million people.
Raising the starting rate for National Insurance would benefit 32 million people.
Cutting council tax benefits 27 million households.
We must focus on cutting the taxes people on average incomes pay.
(2/)

The CPS, polled the idea of raising the national insurance threshold to £12,000 a year – and found that 76% approved.
In contrast, raising the top rate threshold polls badly. A Populus poll found that 58% of voters said they were against, and only 21% in favour.
(3/)

Some people say that increasing the higher rate threshold to £80,000 would help “middle earners”. In reality, 83% of the benefit of such a change would flow to the very richest 10%. That’s not the middle. The average household income is around £28,000.
(4/)

Some people say that there are more people paying the top rate of tax than there used to be in the 1980s. That’s true, but also misleading: we’ve changed lots of other things in the tax system too.
(5/)

Overall the top 10% now pay a *smaller* share of their income in all taxes than during the Thatcher years. Between 1979 and 1990 the richest 10% paid 36% of their income in all direct and indirect taxes, compared to just 34% on average under the current government.
(6/)

After direct tax the top 10% had 21% of income between the 60s and mid 80s. Their share went up in the late 1980s, and levelled off at an average of 28% 1997 - 2018.

The bottom 50% saw their share of disposable income fall from 32% to 27%. They need tax cuts most.

(7/)

Poorer people have less money, so feel the benefit of each extra pound more. And because poorer workers are also more likely to increase the amount they work in response to tax cuts, it means a bigger economic boost too.

(8/)

The chart below compares three options and shows how much they would increase the incomes of different groups, from the poorest tenth on the left, to the richest tenth on the right. Each of them would reduce tax revenues by a roughly equal amount.

(9/)

First option, in orange, is raising the higher rate threshold in income tax from £50,000 to £80,000. Does little for people in the middle. The second option, in green, would involving raising the NICs threshold for everyone from £8,600 to £11,850. Does more for the middle. (10/)

3rd option, in blue, is increasing the threshold for National Insurance to £13,500 for households with children (households with kids are twice as likely to be poor) & also cutting council tax for everyone by 15%, because pensioners don’t pay NICs. (11/)

As you can see, this third option (in blue) would more again to help people on middle incomes – in fact it would do far more for everyone except at the very top end. Essentially all households would get some benefit. That's the sort of thing we need. (12/)

Helping ordinary working people get on in life is a core Conservative principle. To win, and deserve to win, our next PM needs to show that our tax cuts - and our values - are firmly on the side of ordinary working people. (13/13)

blogs.spectator.co.uk/2019/06/boriss…