What should be Tory policy on the 45p tax band?

5pm update:

THE RESULTS OF TODAY'S POLL

• 41% of 711 people who answered the poll said the Conservatives should oppose the 45% tax band.
• 16% said we should support the band.
• 39% said we should wait and see.

WE'LL BE DEBATING ANOTHER IMPLICATION OF THE PBR IN THE MORNING.

***

The Conservative Party's clearest statement on Labour's plan to impose a 45p income tax band on those earning over £150,000 was made by our Number 2 Treasury spokesman, Philip Hammond.  This is what he said (as recorded by Coffee House):

“Clearly if the government is going to announce a huge package of additional borrowing today there will have to be large tax rises after the election.  Of course people on higher incomes will have to pay their share of that but don’t let anybody be deluded by the political spin into thinking that the black hole that Labour has created will be filled by a tax on a really quite small number of very higher earners, it won't.  We are talking about a couple of billions of pounds, the hole is likely to be a hundred billon pounds big, its going to require tax rises across the board and I’m afraid it will be ordinary families and businesses that are hit not just the very rich.”

What do you think the Tory position should be?

VOTE IN OUR SPECIAL POLL HERE.

Comments

[David Cooper]

Why not just a straightforward one line statement that a 45p income tax rate is a bad idea and will form no part of a Conservative budget? At the opposite extreme, we could go into reams of detail about the Laffer Curve and explain how increases in the rate of taxation do not necessarily increase tax revenue - or resort to emotive language about how outrageous it is to tax every last drop of incentive to work harder out of those who are already highly taxed - but is there any real need to expand upon a simple "we will have no part of this"?

[Malcolm Dunn]

He hasn't said anything. Nor in my opinion would it be possible to know unless you have all the facts at your finger tips which Osborne doesn't.
If Darling is right (pigs might fly) and the economy is growing striongly in 2010 and tax receipts are bouyant then it might be possible but if we are in the depths of a slump with high unemployment it would be extraordinarily difficult.

[Raj]

GB£, I only "badger" people when they are trolling or making unrealistic demands - like having 20% flat tax paid for by cutting "waste".

As for your question, sorry but I'm not sure why I have to respond when and where you want - sometimes people work during the day that means they don't read every comment on a blog. My response is that I can't give you a "yes" or "no" answer because I don't have a hotline to CCHQ, nor can I predict whether they will need to modify their position given Labour's apparent spending cuts.

As for Obama, he inspired people to vote for him because of who he was as a person/how he came across, not because of his policies. So if you want to hear more policy statements from the Tories I wouldn't bring him up.

[pp]

A government always "needs" more money...

That is where accountability comes in. No taxpayer money should be collected (let alone spent) without a regularly reviewed, agreed and published business case.

[Adam in London]

Steve Tierney,

it's not that much of a win-win. The poorest who receive tax credits will lose out. They'll lose more in tax credits than you'll give back to them in income tax cuts. You have to - the tax credits are only for some people, the income tax cuts are for everyone. You might argue this is still a good idea, but to say it's a win-win is disingenuous.

[GB£.com]

Obviously, imvho, the biggest trap Labour has set the Tories is not the 45p tax band but its tough spending plans post 2010.

Cameron made a huge announcement just 9 days ago, about post 2010 spending being less than Labour, all the papers reported it as the defining battlefield for the next election, so Labour then produced really tight spending plans for post 2010 and the Tories responded with even less comment than they did on the 45p tax band.

If the PBR leaks allowed Osborne an open goal for his pbr-response by giving him time to prepare, did Cameron's 18th November policy pledge do the same on this critical spending policy?

[Malcolm Dunn]

Pretty stunned that so many voted to oppose the 45% tax band. Do these people really think that's a priority over balancing the budget or trying to repair what is very likely to be a very damaged economy or indeed reduce taxes on the lower paid.

[YMT]

Maybe if we'd had a questions such as out views on it,

My view would be "I oppose it, but lets just sit on it"

Its obviously a huge trap, and the wise thing to do with traps? not step on them until you can get rid of the trap without it going off.

[The Bishop SWine]

We should oppose it :

It’s a bad tax hike because it’s a Labour tax hike and it will undermine the economy further. Not all tax rises are born equal and this one is no exception. Badly thought out and mean spirited, and worse setting a trend that must be opposed. Having screwed over the pensions of millions, Brown must not be allowed to fritter away the hard earned gains of the millionaires. It signals the end of the Nu-Labour experiment and heralds the return of bad old Labour policies.

[Clive Elliot]

We should ignore it.
In revenue terms it's self-defeating anyway.

[Owen Meredith]

the plan doesn't see the new rate introduced until after the next election... surely we just say nothing about it, and then never bring it in?

[John Moss]

We should point out the flaws in Labour's plans and develop our own, behind closed doors.

In the run up to the next election, we should clearly set out our structure for Income Tax, NI, VAT, Corporation Tax etc in teh form of our own "budget". That's a serious piece of work which will set the framework for five years in office.

We should not be deflected from it by endless requests to back or not back individual bits of LABOUR'S policy mess.

[Yet Another Anon]

The 45p band is only proposed to occur after the General Election, so the logical position is to have a position that it should not be introduced, if it is then introduced then the position should be to abolish the new banding, the actual revenue raised is in terms of all revenue raised very small anyway.

[Donald Burling]

As a socially-minded Tory I feel strongly we should support the proposed increase. It won't cause anyone hardship, and it is unlikely to discourage enterprise. If it will only bring in a couple of billion, isn't that an argument for going up to 50%?