The Deputy Prime Minister and leader of the Liberal Democrats, Nick Clegg, called for more ‘fairness for the middle’ in the tax regime yesterday and vowed that the Lib Dems would ‘stick to our guns’ over a mansion tax that would see those with homes worth more than £2m pay more. Mr Clegg went on to call for the Coalition Government to take serious action on taxing unearned wealth and assets that are ‘eye watering’ and ‘often hoarded at the top. The comments were made during a speech to the Resolution Foundation, a think tank in London.
Mr Clegg said that the March Budget should increase the speed of plans to raise the starting threshold for income tax in an attempt to help family budgets in these hard economic times, as the country heads towards a double dip recession.
The call to speed up plans to raise the income tax threshold is likely to be roundly rejected by Mr Clegg’s Conservative Coalition partners, who have already rejected the so-called ‘mansion tax’ on high value homes. Mr Clegg said that regardless of the rejection of the ‘mansion tax’, the Lib Dems would still continue to push for it and may seek support for it from Labour. Mr Clegg went on to say that the lack of tax on unearned wealth ‘entrenches’ the divide in Britain between the wealthy and poor, even increasing it. While admitting that the ‘mansion tax’ is controversial, he said that many would agree it is unfair that an ‘oligarch’ pays only double the Council Tax of an average homeowner, although their house can easily be worth 100 times more.
The Lib Dems campaigned on a promise of raising the income tax allowance to £10,000 a year. While the Coalition already has plans in place to make such a move, Mr Clegg called on the plans to be sped up in order to help families in tough economic times. The plans will amount to a £700 tax cut for anyone earning less than £100,000 a year. The move would be funded by additional taxes on the extremely wealthy.