Labour Policy Watch: Salaries and Taxation

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Salaries and Taxation
Chapters Salaries and Taxation Pensions Benefits Health and Care Education Housing Employment Trades Unions and Labour Laws Trade and Industry Transport Energy Environment Agriculture, Fisheries, Food and Rural Life Crime Legal System Immigration and Asylum Local Government Devolution and Regional Government Parliament and Democracy Media Freedom of Information and Privacy Northern Ireland European Union Foreign Policy Defence and Disarmament Conclusions	Preamble		Chapters Salaries and Taxation Pensions Benefits Health and Care Education Housing Employment Trades Unions and Labour Laws Trade and Industry Transport Energy Environment Agriculture, Fisheries, Food and Rural Life Crime Legal System Immigration and Asylum Local Government Devolution and Regional Government Parliament and Democracy Media Freedom of Information and Privacy Northern Ireland European Union Foreign Policy Defence and Disarmament Conclusions
	Under the Tories, inequality had grown at an unprecedented rate. This was partly because wages councils were abolished and the difference in salaries grew very fast, and partly because the rich paid much less tax, e.g. the top rate of income tax fell to 40%, more of our tax came from spending (VAT, excise duty, etc.) and council tax took twice as high a proportion of disposable income from the poor as from the rich. We have since learnt that some rich people were even allowed to pay a fixed sum in tax without having to declare their income.
	Labour policy was:
	1	To bring in a minimum wage at half male median earnings
	2	To raise the top rate of income tax
	3	To raise more of our tax from income and less from spending
	4	To make council tax fairer
	5	To tackle tax evasion by the rich and business
	6	To tax the windfall profits made when former state utilities were privatised
	7	(Anything on business taxes?)
	In fact under New Labour:
	1	The minimum wage was brought in, but at a lower rate and with even less for young people
	2	There has been a pledge not to raise the top rate of tax
	3	Even less of our tax comes from income and more from spending
	4	The council tax system is unchanged
	5	The special tax arrangements for the rich continue and Britain campaigned against proposed EU measures on tax evasion
	6	The windfall tax was brought in, but some privatised utilities were exempted
	7	Business taxes have been cut and big business offered favourable tax terms
	In addition:
		Other changes to income tax, especially the 10p starting rate, are of most help to the poor
		Tax credits (see Benefits) have also helped the poor
		Spending which once came from taxation now comes from the lottery, and so disproportionately from the poor
		Tax avoidance by big business costs about £85 billion per year
		Overall, New Labour's first two terms left inequality marginally worse
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