Labour could introduce a new income tax bracket
09 May 2017
A news item in the Financial Times has reported that John McDonnell, the shadow chancellor, has promised that people earning less than £80,000 a year would pay no more income tax under a Labour government., after announcing plans for an income tax rise for anyone earning more than £80,000.
McDonnell said that people earning above £80,000 would pay a “modest bit more” and has refused to rule out a 60p tax rate on people earning over £100,000. He has also ruled out raising National Insurance contributions (NICs) or value added tax beyond an already announced plan to charge VAT on private school fees.
Labour has already committed to retaining the triple lock on state pensions, which guarantees they rise every year by whichever is the highest of average earnings, inflation or 2.5 per cent. The Prime Minister has promised not to raise VAT after the election but has left open the possibility of raising income tax or NICs. She has also not recommitted to the pensions triple lock. At the 2015 election, the Tories promised a “tax lock
According to the Financial Times the shadow chancellor said those most affected by income tax increases would be “the 1% at the top”, a figure that roughly equates to the proportion already on the highest, 45% rate of income tax. But he added the party was still “consolidating and confirming our manifesto”.