• What We Stand For
  • Policy Motions

Fair Tax - carried

Wed, 10 Mar 2010

Federal Policy Committee - Mover: Julia Goldsworthy MP (Liberal Democrat Shadow Secretary of State for Communities and Local Government), Summation: Farid Ahmed

Conference recognises that Labour and Conservative policies over many years, including their taxation policies, have between them ensured that Britain has become one of the most unequal societies in the developed world.

Conference believes that unequal societies function badly, for all their people, and that reform of the tax system is essential to achieving the Liberal Democrat goal of a fairer society.

In particular, Conference regrets that under this Labour Government:

A    Britain's tax system is grossly unfair with the poorest fifth of the population paying a greater share of their income in tax than the richest fifth.

B    Even a person working full time earning the minimum wage sees nearly £1000 taken from them in income tax.

C    Loopholes exploited by the wealthiest have not been closed.

Conference also recognises that:

I    The Conservatives' only tax-cutting policy is a rise in the Inheritance Tax threshold which will only benefit the wealthiest 6%.

II    The Conservatives introduced the Council Tax, an unfair tax which bears no relationship to the ability to pay.

III    The Conservatives' plans to recognise marriage in the tax system are deeply unfair, disproportionately benefiting the richest and offering nothing to working couples.

Conference believes that:

a)    The tax system should be radically rebalanced by increasing the income tax threshold to take low earners out of tax and reduce the burden of income tax on low and middle earners, shifting the burden towards those who are better able to bear it.

b)    The Council Tax is an unfair tax which should be scrapped and replaced with a fair tax based on the ability to pay; that it is necessary to pilot Local Income Tax to resolve any practical issues of implementation before it is rolled out nationally, and that therefore local councils should be invited to put themselves forward to be involved in the piloting phase in the second year of a Parliament.

Conference therefore calls for:

1.    An increase in the threshold at which people start paying income tax from current levels to £10,000, cutting the average working age person's income tax bill by £700 and cutting pensioner's income tax bills by £100 - these plans will mean that almost four million people on low incomes will no longer have to pay any income tax at all.

2.    The rate of capital gains tax to match income tax; tax relief of pension contributions only to be paid at the basic rate; a crackdown on tax evasion; and the introduction of a mansion tax on homes over £2 million.

3.    These policies to be implemented in the first Budget of a Liberal Democrat government.

Applicability: Federal; except b) (lines 23-27) which is England-only.