Milliband grabs two stupid policies simultaneously

Labour leader Milliband’s new-found support for a 10p tax rate and a Mansion Tax at the same time is the worst of politics and an insult to the intelligence of the electorate.

A short band of income tax at 10% is inefficient and complex. The way to cut the tax burden on the low-paid is to raise the starting threshold. And that is before tax incidence is taken into account, because the initial incidence of all labour related taxes, including National Insurance contributions, is on the employer, in the start of a chain that results in the taxes being passed on to customers in higher prices and then on to landlords as it reduces the amount of rent that businesses can pay.

The objection to Mansion Tax is that it is just a clumsy patch on the Council Tax system, which is itself regressive and limping along on valuations that are 22 years old. What with the ill-judged deferral of the UBR revaluations, the entire property tax system is now starting to come apart and in need of review. There will be an opportunity to address this when Caroline Lucas’s Land Value Tax Bill comes up for its Second Reading in March. What a pity that Milliband has chosen not to put his party’s weight behind that.

He has shown himself to be an incompetent with a rotten grasp of a key policy area.