December 17, 2022

Could Labour become the low tax party?

Could Labour become the low tax party?

Starmer has vowed to cut taxes for "working people." What does this mean, and could Labour really become the low tax party?

"I want taxes to come down for working people. They've been really clobbered time and time again, whether that's on income tax, whether it's National Insurance or council tax," said Keir Starmer. "The highest tax since WW2 - this really is anti-Conservative stuff.”

Indeed, progressive parties don't need to be high tax ones. JFK's Democrats slashed marginal tax rates in the 60s and the New Zealand Labour Party did likewise in the 1980s. Social Democrats abolished Sweden's inheritance tax.

JFK cut taxes drastically in 1963.

And, of course, the Blair Government wasn't high tax. Tony said “I don’t think that the answer…is to take some money off those at the top and give a few more pounds in benefit to those at the bottom.” This shows he understood the importance of aspiration for our economy.

Tony Blair sought to keep taxes low.

But to be effective Sir Keir’s tax cuts would have to be for everyone, including the almost 20% of taxpayers who now pay higher or additional rate.

When he talks of tax cuts “for working people” does this include the 1% of taxpayers who pay 30% of the income tax bill?