Do Lib Dems plan to tax £50k earners or not? Chaos reigns
Lib Dems' Danny Alexander says wealthy must bear more of burden – but what does 'wealthy' mean?
CHAOS and confusion reigns in the Liberal Democrat camp this morning after the Chief Secretary to the Treasury, Danny Alexander, confirmed the Lib Dems will go into the 2015 general election proposing that the wealthiest in the country should pay higher taxes – but refused to confirm it was party policy to count anyone earning £50,000 a year or more as rich.
Despite the fact that a party document accidentally leaked to the press yesterday suggested precisely that.
In a speech later this morning, Alexander will insist that the wealthy will have to be taxed more in order to get the nation's structural deficit down. This is not what Tory Chancellor George Osborne advocates – he hopes to reduce the deficit through cuts in public spending and an increase in economic growth. The Tory view is that higher taxes on the rich only stifle enterprise.
But Alexander says that in the first two full years of the next Parliament more will need to be done to get down the structural deficit. And it will require more than further cuts in public spending.
Speaking on Radio 4's Today programme before he addresses the Lib Dem conference in Glasgow, he said: “As part of that, we [the Lib Dems] are proposing there should be additional tax rises on the wealthiest in this country, so that you make sure those with the broadest shoulders are paying an additional share of the burden.”
He said his party's plans included the one-per-cent-per-annum mansion tax on property worth more than £2 million, reducing the tax relief on pension payments for the wealthiest, and increasing capital gains tax. Alexander estimated that would raise £5bn.
But when it came to income tax, he refused to acknowledge that the £50,000 threshold mentioned in the leaked 'lines to take' document was party policy.
As The Mole reported yesterday, the document said: "We are looking at how the richest ten per cent of people, those earning over £50,000, could make a further contribution. The vast majority of people in the country would consider £50,000 a very large salary: these are not the middle income earners."
When Today presented Evan Davis brought this up this morning, Alexander responded: “We have no plans to raises taxes on anyone earning over £50,000 a year. There was a leaked memo. I don't know where it came from. It doesn't reflect any of the policies we are discussing.”
So what is Lib Dem policy?
Clegg has spoken in the past of the need to raise taxes on the wealthy, and Alexander has confirmed that taxes will have to go up if the Lib Dems are in another coalition government after the 2015 election. It's just that they can't say exactly who will be taxed extra and by how much.
Alexander is putting up what amounts to a smokescreen of obfuscation because the Lib Dems know that once they spell out precisely how they want to raise taxes, the Tories and the voters - and possibly even the Labour Party - will attack them.
It's time for clarity. But the Mole doubts you will get it from Clegg's closing speech to the conference tomorrow. He can be clear about the direction in which he wants to take the Lib Dems, but on taxation you can expect Clegg to do the dance of the seven veils. ·