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Richmond upon Thames Liberal Democrats:Covering the constituencies of Twickenham and Richmond Park |
Inside Politics: Lib Dems' tax strategy may fox their rivals
June 25, 2011 11:19 AM
• [Jun 22] Allegra Stratton writes: THOSE wondering what David Laws is up to or lamenting his departure from politics can relax - or not, depending on their point of view. The ex-chief secretary to the Treasury is at work inside Liberal Democrat HQ in Cowley Street on a document called Tax 2020. Laws, alongside his successor as chief secretary to the Treasury, Danny Alexander, and the party's economists have been working on a secret project since the beginning of the year . .
The section I have seen suggests the Lib Dems are close to sorting out their problems with their mansion tax. This policy had become an embarrassment, crumbling like a stinking chunk of policy cheese in Vince Cable's hands. One Clegg aide, also now a member of Tax 2020, expressed relief on entering government that the coalition with the Tories meant they would not have to implement this complicated tax . .
Their new policy sees the mansion tax modified to a mansion sales tax: people will be charged a higher rate of capital gains tax on any profit made when selling a million-pound-plus house. The CGT would be levied at least at 28% on that bit of the profit above £1m. Their mansion tax policy had eventually proposed an annual tax of 1% on £2m properties, so in this sense, their new policy could affect more people.
To make this less onerous they want to encourage people to renovate a house rather than move on, by reducing the VAT on improvements to 5%. And they think they should scrap stamp duty for low earners. This, and other items within the document, will be challenging for George Osborne. Many economic liberals in the Tory party would prefer a tax on property wealth at the point of sale to the 50p rate of tax for instance but it goes against their political interests as it would be unpopular with a lot of their voters . .
• Inside Politics: Lib Dems' tax strategy may fox their rivals [Guardian Jun 22]
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