LABOUR is planning to “hammer” workers by scrapping tax perks and spend more on benefits, it was revealed yesterday.
Shadow Chancellor John McDonnell wants to ditch the tax-free personal allowance taking up to £2,500 a year from wage packets.
Under a shake-up being actively considered, the money would help fund a £48-a-week welfare payment for all.
He insists it will put more money into people’s pockets overall.
But last night Tories warned it would mean 1.74 million poorest workers paying income tax for the first time.
It would also drag thousands more middle-earners into higher rate tax – and add at least £128billion to the welfare bill.
Mr McDonnell, who has promised not to raise income tax for those earning below £80,000 has backed changes proposed by the New Economics Foundation.
If the tax-free allowance was scrapped, the lowest rate of 20 per cent would apply, hitting every workers earning over £12,500 with an additional £2,500 bill.
Labour’s reckless plan gives with one hand and takes away with the other, landing every worker with a higher tax bill while massively ballooning our welfare bill
Elizabeth Truss, Treasury Chief Secretary
Workers on below £10,000 a year would see their tax bill rise from nothing to £2,000.
Those earning an average salary of £29,832 would face a 58 per cent hike, from £3,466 to £5,966.
The threshold for higher-rate taxpayers would also be cut from £50,000 to £37,500, pulling thousands more, including teachers and police officers, in the 40 per cent rate.
Treasury Chief Secretary Elizabeth Truss said: “This would be a staggering tax bombshell from Labour, hammering every worker in the country.
“Labour’s reckless plan gives with one hand and takes away with the other, landing every worker with a higher tax bill while massively ballooning our welfare bill.
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“This shows exactly why Jeremy Corbyn’s Labour can never be trusted with our economy. Only the Conservatives will continue to keep taxes low for hard-working people.”
Yesterday the tax-free personal allowance was raised again to £12,500 – meaning an average earner will be paying £1,205 less in tax each year compared to 2010.
A spokesman for Mr McDonnell said last night: “While this proposal is not Labour Party policy, only the clueless and incompetent Tories could turn an idea to put more pounds into people’s pockets into a ‘bombshell’.”
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