Sunday, 7 February 2016

New Analysis - Labour Tax Plans to Hit 350,000 Low Income Workers

Unworkable Rebate Plan 'Not Fit for Purpose'

Labour’s tax hike on working people could hit the incomes of around 350,000 of even the lowest income workers, new analysis has shown – as the party’s proposals continues to unravel.

Labour announced this week they want to increase the basic rate of income tax for 2.2 million people in Scotland – including 500,000 pensioners. While Labour have claimed that those on incomes between £11,000 and £20,000 could apply for a rebate, they have failed to acknowledge that many people do not claim for benefits.

UK Government figures show that approximately one in three people entitled to claim for certain benefits do not claim them.

An estimated one million taxpayers in Scotland earn between £11,000 and £20,000. If this average level of uptake was maintained, around 350,000 people on low incomes would miss out on Labour’s rebate.

Commenting, SNP MSP Mark McDonald said:

“Since announcing their plans for a tax hike on low-earners, Labour have claimed that their proposed rebate would protect the poorest workers– but the fact is that Labour have no way of telling us how this scheme would work, or how they could guarantee that the rebate gets to those who need it most.

“The reality is Labour cannot guarantee that a single person would claim or receive this £100, but if Labour ever got into power everyone would have to pay more taxes.

"During the budget debate this week, we had the extraordinary spectacle of Labour’s finance spokesperson dismissing serious questions on how Labour’s proposed rebate would work as mere 'details' – now we know Labour’s plans could hit almost 350,000 of the people they have specifically pledged to protect.

“Earlier this week, the Resolution Foundation told us that even if Labour’s rebate plans are workable, they don’t make their planned tax hike any more progressive. The fact is Labour don’t have a clue how their plans would work or how many low-earners would be hit – these plans aren’t worth the back of a fag packet they were written on.

“While the SNP want to give the lowest paid workers in Scotland a pay-rise, Labour want to give them a tax-rise – and Kezia Dugdale will have to answer to these workers for her regressive plans at the election in three months’ time.”
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