The wisdom of ending the 50p upper tax rate half-way through this Parliament is open to doubt. If unemployment is still rising and benefits being pruned, a tax cut for the rich would send out a curious signal to the public.
Yet there is no doubt now that this is what the coalition intends, however, given David Laws writing last week in the FT that it should be done by 2013 and Nick Clegg telling us today that it would be done when people on lower middle incomes are “breathing more easily“.
How this will be done seems likely to be a combination of a crackdown on tax avoidance on the purchase of large houses (announced in the budget) and fiddling with council tax. It won’t be a mansion tax – according to Clegg – despite claims in some newspapers this morning. Read more