The Liberal Party welcomes the debate on raising the tax threshold to £20k in this country.
Doing so would potentially take five million people out of the tax benefits trap, reduce benefits proportionately, and reduce the administrative burden of both tax and benefits.
The tax threshold of £20k will mean more pensioners on limited pensions can take more income home and encourage pensioners to contribute to the economy in part time and flexible work as well as making work worth doing.
We believe that a 5p cut in income tax would be funded by the reduction in the annual expenditure of £48.5 billion in welfare spending on working-age adults, as estimated by The Office for Budget Responsibility (OBR).
The party believes further reductions in the basic rate of income tax can be funded by the review and reform of the taxation regime, including tax rebates, allowances and exemption which distort incentives to work.
