Labour farce as it fails to agree over tax raid on ‘rich’

‘Picking off people on particular incomes’

Labour’s plan to tax those on more than £ 70,000 came under fire from economic experts yesterday – and one of its senior frontbenchers.

shadow Chancellor John McDonnell said earlier this week that he considered those on more than £70,000 to be rich – and that they should ‘pay their way more’.

but The Institute for Fiscal studies said these people had already been hammered by huge tax increases over the past decade, while those on low to middle earnings had not really paid any extra.

and Emily Thornberry, Labour’s foreign affairs spokesman, played down suggestions new taxes might be introduced at this level, saying she understood why ‘ many people’ on this salary might feel they are ‘not rich’.

she said the party is ‘prepared to make radical change’ and stand up to the elites – but this did not mean ‘picking off people of particular incomes’.

Mr McDonnell’s plans for higher taxes on those earning £70,000-plus would affect more than 1.6million people as he looks to fund a £500billion spending spree.

on Wednesday, Mr McDonnell said: ‘There’s a general view that middle and low earners are being hit very hard with a combination of both income tax rises but also in terms of the burden placed upon them by stealth taxes.

‘We want to get a system that is fair, so the corporations and the rich pay their way more and that means ending the tax giveaways to the corporations and also those in inheritance tax, capital gains tax and the bankers’ levy.’ asked what he considered to be rich, he said salaries above around £70,000.

but pressed on whether higher earners would be hit under a Labour government, Miss Thornberry said: ‘We will need to go into the details as to what our changes to taxation will be.

‘I’m not really in a position to be able to go into those details today. There are many people on £70,000 who may well feel that their circumstances are such that they are not rich and I understand that.

‘but they are certainly on a higher income – it’s just a matter of maths – than those on £26,000.

‘That is not picking off people of particular incomes. The details of our tax plans will come out in our manifesto.’

Paul Johnson, director of the IFs, said: ‘If you look over the period since the financial crisis, the group who have really seen very big tax increases are those earning above £70,000 a year.

‘They have lost their income tax personal allowance, we have seen a 45p rate at £150,000 and very big reductions in income tax relief for pension contributions.

‘If you look at people on average earnings, £25,000, £30,000, £40,000-a-year, they have really not seen any tax increases at all.’

Chris Philp, Tory MP and member of the Treasury select committee, said: ‘ The independent IFs have laid bare the chaos at the heart of Corbyn’s tax plans.

‘It’s becoming increasingly clear that an unstable coalition led by Jeremy Corbyn propped up by the SNP and Liberal Democrats would put up taxes and hurt your family’s finances.’