It is considered to be one of the primary reasons for NuLab's poor showing at the local elections on May 1st, considering that Brown's botched attempts at trying to placate the lower paid by saying that more credits would be available is like saying, I'm still taking your money, and you can beg me through the tax credit system to let you have some of it back.
So why take it in the first place ??
The Libertarian Party, of which I am a member, are of the view that a great improvement would be made to this policy by going two steps further.
Specifically, what is needed to put things right is for the 20p and 40p bands to be abolished as well.
Before, the income tax take from someone making a rather paltry £12,000 gross a year (approximately what might be earned in a year working full-time on an hourly wage a little above the legal minimum) was just under £1,223. Now it is £1,313*.
Now, you might call that type of calculation disingenuous, since it doesn't take into account benefits (or indeed other taxes, including National Insurance contributions). But, what it actually means is that over £1000 of what, say, a checkout operator is paid over a year goes into the Treasury instead of into his or her pocket. If they are able to navigate the labyrinthine tax credits system, they might just be able to claim some of it back!
Let's stop all of this 'tax them and make them claim it back' nonsense at once. And while we're at it, reform the whole damn taxation system. LPUK calculate that income tax could be abolished, and the money recouped solely by getting rid of most of Britain's QUANGOs.
Scarcely believably, in 2006 more money (£167.5 billion) was spent on QUANGOs than was taken in by the Government in income tax (£143.3 billion (PDF)). This is before we consider the money wasted in various Government departments, before we consider the disastrous ID Cards spending, before we consider the wasteful spending on consultants, before we consider the costs of administration of income tax and tax credits themselves, and before we consider the costs of overseas military adventures.
Income tax could be abolished without taking a penny from Health, Police and Emergency services, social welfare, Education, or our Defence.
The Tories wont do it, they have promised to keep up with Gordon Brown's spending plans and just want to tinker round the edges, and the LibDem's wont do it, they want you to pay even more taxes on cars and the already debunked Green taxes.
* Based on the Government's (HMRC) data, before any other taxes or benefits/credits are taken into account.
So you see, There is another way!
Your Life, Your Country, Your Choice.
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