It's all gone quiet...

...because I've been very busy*... A glut of posts are now overdue and sooner or later the dam will be breached and a flood will be forthcoming.

Meanwhile, here's a bit of Pink:

Andrew

* There is an election on, after all!

Fairer Taxes: My Article for Lib Dem Voice

Yesterday, I had an article published on Lib Dem Voice.

Here it is. This is the text as submitted, rather than as edited - so you can play spot the difference!:

Earlier this week I saw this tweet from Paul Lewis of BBC Radio 4's Moneybox programme:

The 2014 rise in personal tax allowance worth £112 a year for basic rate taxpayer but £39 if on U Credit, & £195 for higher rate taxpayers.
— Paul Lewis (@paullewismoney) April 2, 2013

This struck me as odd, so I asked Paul how he calculated the £195 figure (I do not know enough about benefits and Universal Credit to make a judgement on the £39 figure). He quickly answered:

@oneexwidow >> Correctly! Checked by accountants. Using these figures hmrc.gov.uk/budget2013/tii…
— Paul Lewis (@paullewismoney) April 2, 2013

As I was busy with other things at the time, I was only able to have a brief look at the document and, initially, slightly mis-interpretted the info:

 

@paullewismoney Thanks! Have had look as puzzled - down to interaction of Personal Allowance rise equating to 0.6% vs. 1% increase in HRT
— Andrew Brown (@oneexwidow) April 2, 2013

The glaring mis-calculation I made was the percentage increase in the Personal Allowance (PA) which is of course 5.9% rather than 0.6% as I wrote! The underlying analysis however was right - the discrepancy in figures is due to the interaction between the increase to the Personal Allowance and the increase in the Higher Rate Threshold.

 

It stuck in my mind as something worth looking into further - and worth questioning whether this met with our aims of Fairer Taxes.

 

By 2014, the Personal Allowance will have increased by over 54% from its level in 2010. It's something that we're justly proud of, and which we can be reasonably sure neither of the other two parties would have done alone (as I outlined here http://oneexwidow.blogspot.co.uk/2012/12/a-free-ipad-mini-for-everyone.html).

 

Since 2010, the threshold at which Higher Rate Tax become payable has fallen to help offset the rise in the Personal Allowance. This has led to the Basic Rate Limit (earnings between the PA and the Higher Rate Threshold) being squeezed from both ends, and to the upper threshold being reduced from £43,875 to £41,450.

 

Next year, however, the Higher Rate Threshold will rise by 1%, and it is this rise which gives every taxpayer earning above the new limit (but less than £100,000) a tax cut of £195 as opposed to "just" £112.

 

So, the question: is this fair?

 

Now, it could be argued that £112 is worth much more to someone earning £10,000 than £195 is to someone on £41,865 or above - and this is certain to be true in the vast majority of cases. It can also be argued that reducing the Higher Rate Threshold is, effectively, a tax on aspiration - and I am not without sympathy to this view. But at a time of austerity when we are making a big spending commitment on increasing the Personal Allowance, should we be providing greater benefits to Higher Rate Taxpayers?

 

Although the numbers of Higher Rate Taxpayers have increased over the years, it should be noted that the threshold at which 40% becomes payable (£41,865) is still some way above the median gross income (£26,500).

 

It may not be the stuff of popular campaigning, but perhaps we should be pushing behind the scenes for the Higher Rate Threshold to be frozen. Going forward, we should consider how we manage tax bands so that they remain progressive whilst minimising such anomalies.

 

Andrew

Some Thoughts On... Iain Banks

I'd been meaning to post for a while about how much I was looking forward to the publication of Iain Banks' new book, The Quarry. Originally due out in October, the publication was recently brought forward to June.

 

The Quarry will now not just be his next novel, but his last. Regardless of what I think of it in itself, it will be added to a volume of work by one of this nation's best authors - too often under-rated and under-recognised.

 

Whilst I've been disappointed with most of Banks' recent offerings, his earlier works (and, I understand, his Science Fiction work) is amongst the finest contemporary fiction by any British author.

 

Dark, witty, occasionally violent; his novels explore the gritty side of life and relationships and the consequences of actions. Inter-generational family sagas where echoes of the past come back to exert a price on the inhabitants of the present were a recurring obsession.

 

At the heart of many of his novels were secrets. Secrets that ate away at his characters and families, like a cancer; slowly but steadily developing until they were ready to destroy.

 

Today, Iain Banks has sadly announced that his body has been playing host to a very real cancer of its own - and that he only has months to live. I am absolutely gutted by this news and for Banks himself. My wish is that he is able to live out his last months in as much comfort and as little pain as the medics can provide.

 

 

Andrew

What Lib Dems Stand For - my 156 words worth.

Alex Wilcock, of Love and Liberty, has instigated and curated a range of statements on what the Liberal Democrats stand for on the 25th anniversary of their formation. I've finally got round to writing my statement which I had aimed to keep to 150 words - which is an arbitrary figure I saw mentioned in one of the comments to one of Alex's posts!

Within such a stricture, of course, I was unable to include everything - including our commitment to a long list of constitutional reforms. Anyway, for what their worth, here are my 156 words:

Liberal Democrats exist to promote the freedom of the individual within a society in which all can achieve their potential.

Liberal Democrats have a fundamental belief in the equality of all regardless of income, wealth, status, gender or gender identity, disability, personal capacity or sexual preferences - and that this should be enshrined and supported in law.

Liberal Democrats believe the role of the State is to facilitate the ability of individuals to reach and exceed their potential and to provide an underpinning of support for those who fail to do so. They believe that spending to meet these aims is of benefit to all and that the burden of taxation should be progressive but not punitive.

Liberal Democrats are pragmatic, concerned with outcomes not methodology and resisting traditional dogmas of left and right in favour of evidence-based policy which demonstrably support our aims.

Liberal Democrats support these aims in the UK, in Europe and internationally.

You can read other contributions here and also the current Lib Dem statement of belief (the preamble to the constitution) here.

Andrew