Liberal Democrats publish new taxation plans

8.00.00am BST (GMT +0100) Fri 11th Aug 2006

Today the Liberal Democrat tax commission has unveiled its proposals for a fairer, greener and simpler tax system.

The proposals would mean lower tax bills for most households in Wolverhampton, the West Midlands and across the country, as well as tackling inequality and environmental damage.

The proposals would -

• Save a typical pensioner couple around £1,600 a year through proposals including scrapping council tax

• Save a typical double-earning couple around £1,500 a year through measures including a 2p cut in the basic rate of income tax

• Lift two million people on low income out of tax completely across Britain by reducing the 10p tax rate to zero

• Take 1.3 million people out of the top rate of income tax nationally by raising the threshold to £50,000 p.a.

• Cut the basic tax rate by 2p

• Tackle climate change by taxing pollution

• Cut the number of tax rates and reliefs for both individuals and businesses

I have long argued that the current system of taxation is not fair. The poorest 20% of households pay a bigger share of their income in tax than the richest 20%. Wealth inequality has actually risen since Labour came to power.

These Liberal Democrat proposals will make the tax system fairer for those on low and middle incomes. Specifically this will benefit the vast majority of pensioners, key public sector workers and young professionals. These tax cuts for the majority will be paid for by the wealthy and those with environmentally damaging lifestyles.

The proposals will be debated and voted upon at the Liberal Democrat Conference in Brighton in September. A copy of the Policy Paper is in the Download Area should you wish to view it.