April 6th: Tax Cut For The Richest, Tax Increase For The Poorest

The new tax year starts today, bracketed by strike action from PCS who represent civil service workers, and the message could not be clearer.
Today the top rate of tax, paid by the 1% highest earners who earn over £150,000/year, will fall from 50% to 45%. Meanwhile at the other end of the scale, the people with the lowest income – those on unemployment and disability benefits in Birmingham – face paying 20% of their council tax bill.
The government that started by saying we were all in it together has consistently shown how far apart from us they are.

The Laffer Curve – are we nearer Point A or Point B?

They will say that the cut in the top rate of income tax will increase the amount of revenue because of the laffer curve, but when asked where on the laffer curve we are, no evidence will be produced. Being a curve, it has two slopes, but no-one knows what the curve actually looks like, or where we are on it. It is actually a crying shame that the rate of tax has been cut after just one year because we will not get any evidence from it – it is too easy to shift bonuses forward a tax year to avoid the increase, and then back a tax year to pay the lower rate. This means that the previous financial year will necessarily have a smaller collections than the surrounding years – something the Tories know full well and why they wanted this tax cut to happen so badly this year.
The reality is that some of the richest people will be paying less tax, though the extreme rich never paid any tax before anyway and won’t start doing so now.

Meanwhile the 20% council tax being charged to unemployed and some disabled people in Birmingham will cost an average of £5/week out of your £71/week unemployment benefits (£56.25 if you’re under 25). That is a huge amount from a small budget at a time when food, gas and electric prices are rising fast, and benefits will be capped to just 1% increases.

It also comes on top of other cuts like the bedroom tax, the way ATOS and the WCA work to remove people from disability benefits, the forthcoming change of DLA to PIP and the increasing number of sanctions couple with sanction targets in jobcentres. It is estimated that the cumulative cost to disabled people of all the cuts to their benefits will be £28bn – a sixth of the original deficit, from a group of people who can least afford it and who did not cause the crisis that is being used to attack and destroy our social security and turn it into a corporate welfare state where tax is used to pay companies wage bills, either through workfare schemes, subsidised wage schemes or tax credits.

The time to fightback and return welfare to social security is now. In the past few months West Midlands SolFed, Unite Community Union and the Birmingham Benefits Justice Campaign have all formed and/or started campaigning around social security issues, joining longer running groups like DPAC and Boycott Workfare.
There are two Bedroom Tax events coming up – next weekend, Saturday 13th, is the UK Uncut day of action and an action will take place in Birmingham, meeting at 12noon at Pigeon Park – more details on the facebook event.
The following weekend is a demonstration in Victoria Square from 12 noon, organised by Birmingham Benefits Justice Campaign as part of a national day of demonstrations. More details on the facebook event

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1 Comment

Filed under Cuts, Events

One response to “April 6th: Tax Cut For The Richest, Tax Increase For The Poorest

  1. Pingback: Birmingham Trades Council » April 6th: Tax Cut For The Richest, Tax Increase For The Poorest

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