by Stephen Tall on February 13, 2012
Lib Dem Voice has polled our members-only forum to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 570 party members responded, and we’re publishing the full results.
90% of Lib Dem members back principle of 50p rate
LDV asked: In 2009 a new top rate of income tax of 50p in the pound was introduced for earnings over £150,000. Previously the top rate of income tax had been 40p in the pound. At what income level do you think the Coalition Government should set the 50p top rate of income tax?
2% – Income above £500,000
7% – Income above £250,000
50% – Income above £150,000 as at present
25% – Income above £100,000
6% – Income above £75,000
8% – I think the 50p top rate should be scrapped
2% – Don’t know / No opinion
A pretty clear result: exactly half the Lib Dem members we surveyed backed the current 50p rate levied on marginal income above £150,000, a tax introduced by Labour under Gordon Brown and so far maintained by the Coalition. In total, a whopping 90% of party members back the principle of the 50p rate. However, 9% of you think it should be restricted to those earning £250,000 or £500,000 and more; while 31% of you would like to many more of the higher-paid — those earning more than £75,000 or £100,000 — contributing to the 50p top tax rate. Of course, a 50p top-rate of tax for those earning more than £100k was Lib Dem policy until 2006, when it was scrapped during Ming Campbell’s leadership of the party.
Majority of Lib Dems say 50p rate making no difference to economy
Do you think the 50p tax rate on people earning more than £150,000 is helping or damaging the economy, or is it making no difference?
33% – Is helping the economy
7% – Is damaging the economy
54% – Is making no difference to the economy
6% – Don’t know / No opinion
An intriguing result. It seems that, for more than half the party, the 50p tax rate is as much about symbolism as it is about impact — the majority think it is making no difference to the economy, yet as we saw from the previous question the vast majority of Lib Dems are supportive of the principle. One-third of members, though, say it is helping the economy, with the Treasury estimating it brings in £2.4bn a year. Only 7% of members think the 50p rate is actually damaging the economy.
73% back increased taxes on the wealthiest
And more generally speaking, do you think the taxes on the wealthiest people in the UK should be increased, should be decreased, or kept at their current levels?
73% – Should be increased
4% – Should be decreased
19% – Should be kept at their current levels
3% – Don’t know / No opinion
Little doubt here about the direction of travel most Lib Dem members support — almost three-quarters back an increase in taxes on wealth; many, however, argued this needed to be balanced by tax-cuts on income. Here’s a sample of your comments:
Taxes on all wealth, especially land, should be increased to decrease taxes on income and VAT.
Taxes on all should be decreased wherever possible and prudent.
As with bank bonuses we need to change attitudes such that mega bonuses are seen as the greed they are. Income / bonuses earned for a job well done are one thing, income/bonuses as a matter of course irrespective of achievement are wrong. There should however be greater tax benefits to charitable giving for sponsorhip of the arts and social activities – somewhat paternalistic but could have benefits and move away from a statist approach to social provision.
Increased – but only through need, not envy.
Only to bring down taxes for low or middle income families, not to increase overall spending
Loopholes, avoidance and evasion should be tackled properly. Increasing the rates is unfair unless you are making sure that everyone who should pay does pay.
Wealth taxes should be prioritised in order to replace income taxes.
The UK has a perfectly adequate progressive taxation system as is. The lower threshold should rise to – eventually – be equivalent to minimum wage, but upper rates are fine.
Increased, but based on their wealth and unearned income rather than their earned income which we ought to be encourging people to keep, spend and use to increase employment.
Proviso is that taxes on wealth not income should be increased, this is where the real imbalance is.
Currently we have an effective tax system for progressively taxing income (although more lower bounds should be included 10p?). However, we do not have an effective system for taxing wealth, this needs to be seriously looked at as there is a disproportionate gap between those with stores of wealth and those with none.