The definition of a ‘high-earner’ has changed, and tax must change with it

Those on the minimum wage shouldn't pay anything back to the state

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Party conference season is now fast approaching and the August of continued grave news will give way to major policy announcements by the political parties. This year it’s the last time the parties will be getting together in this guise before the general election campaign starts in earnest. The spring conferences will be about campaigning – very much an internal event bar a few main speeches.

But autumn, the start of the new school term, is the time for a spectacle. It’s the culmination of months of hard work by marketing and events teams, with the policy departments and press officers scurrying around trying to organise briefings and exclusives and set-piece announcements.

Delegates, want to know about hotels? Look on the internet, we’ve got a press conference to organise and that policy document needs to be seamless, because we know every journalist in the press pack will be picking at it; looking for a loose thread.

The Ukip conference in Doncaster will follow the same pattern, since we have a series of policy announcements to make before our main election launch in 2015.

Behind them all there is the fundamental belief that power lies with the individual, not the state, and that we should free people from burdensome regulation and controls and allow them to achieve their full potential.

This week we announced the main points behind our tax policy, which goes to the heart of those beliefs. What better defines the way we view the state’s role in our lives than the amount of money it wants to take away from people who spend the majority of their waking time earning it?

We have always said that we believe it is morally right to remove the lowest paid from income tax. This hasn’t changed, but I wouldn’t be surprised if many readers were not aware of it since the headlines about raising the tax threshold are usually given to the Lib Dems who have, for the past few years, been chasing our tail on this issue. And with Labour banging on about the top rate of tax, they seem to have forgotten about those at the bottom, the people they were initially set up to represent. After all, they cut the 10p rate of tax. It is unacceptable to have people earning a minimum wage having to give a chunk of it back to the state, for it then to be eaten up in a pipeline of administration and a few “tax credits”. If people aren’t earning enough to live on, why are we taking their money away from them in the first place?

But it’s not just those at the bottom of the pay scale who have been hit by years of lecturing that vast government spending is good and tax cuts bad. George Osborne has dragged more middle earners into the top rate of tax, which was designed for those on very high salaries. It is a tax on enterprise and career ambition. People working in professions like teaching and nursing work hard to get promoted and take on more responsibility and then find their salary increase is gobbled up by a greedy Chancellor.

These people aren’t high earners in the traditional sense: they’ve been dragged into that bracket by years of Gordon Brown’s fiscal greed and Osborne’s demand for government spending. That’s why we would raise the threshold for the 40 per cent rate of tax to £45,000.

 

Though not an initial priority, the 45p and 50p higher tax rates have led to a number of high-earning people going offshore. We’re still struggling through the harshest economic times of a generation, those creating the wealth and the jobs should be encouraged to continue and we should also attract wealth and job creators to the UK. Ukip wants an economy where success is encouraged and those who achieve aren’t made to feel “greedy” or obliged to have the Exchequer take an ever growing proportion of their earnings as a penalty for success.

The argument will be that tax cuts will naturally lead to a bigger deficit and an increase in our national debt. But history has shown us that cutting taxes and allowing people to spend more of their own money gives a bigger boost to the economy than government grants and redistribution.

I personally view the increasing debt burden and inability to balance the books as the Coalition’s biggest failure. Of course there are areas which need central spending: the NHS and our defence budget being two key examples. But equally there are areas where government spending is a detriment to an efficient economy since it wastes money which could be going towards helping businesses which creates jobs and income. I think that the billions we spend on our EU contributions and the foreign aid budget would be a good place to start.

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