Tory 'double tax whammy': Labour warns of two increases, Vivien Goldsmith reports
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Your support makes all the difference.Gordon Brown, the Shadow Chancellor, has warned of a double whammy of VAT rises and an increase in taxes on income that will hit consumers' pockets in April.
Political argument has focused on the planned rise in VAT on domestic fuel. This starts at 8 per cent in April and rises to 17.5 per cent the following year. This alone will cost a person earning pounds 10,000 an extra pounds 1 a week in the first year and pounds 2.21 the next.
But the tax rises mean a married man earning pounds 10,000 a year with a pounds 30,000 mortgage will see a further pounds 4.94 a week drained from his pay packet in higher income tax and National Insurance.
The rise in income tax comes from the dropping of the married man's tax allowance from 25 to 20 per cent. The increase also applies to the additional personal allowance claimed by single parents. Mortgage interest tax relief is also being cut from 25 to 20 per cent.
A person on an income of pounds 30,000 a year will stand to lose pounds 12.18 a week through rises in direct taxation.
During the general election campaign, the Conservatives accused the Labour Party of planning a tax bombshell. John Major said be believed in cutting taxes.
Mr Brown said: 'Our ready reckoner shows that the Tories are not just the party that puts VAT on fuel for millions of families but exposes how direct taxation - taxes applied directly to people's wage packets and salary cheques despite Tory promises of cuts - is going up from April 1994.'
----------------------------------------------------------------- Table: COMING TAX RISES - ANNUAL INCREASES ----------------------------------------------------------------- Income IT Miras NIC Total pounds pounds pounds pounds pounds 10,000 66 120 70.90 256.90 15,000 66 120 120.90 306.90 20,000 66 120 170.90 356.90 25,000 66 120 189.30 375.30 30,000 324 120 189.30 633.30 35,000 324 120 189.30 633.30 40,000 324 120 189.30 633.30 50,000 324 120 189.30 633.30 ----------------------------------------------------------------- Figures for a married man with pounds 30,000 mortgage, interest rates at 8 per cent. ----------------------------------------------------------------- IT - income tax ----------------------------------------------------------------- Source: Labour Party -----------------------------------------------------------------
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