£50,000 income tax memo 'mistake'

Nick CleggThe Liberal Democrats have blamed suggestions the party was considering a new £50,000 rate of income tax on a human error.

An internal party document - inadvertently sent to journalists - indicated the Lib Dems were looking at how the richest 10% of people "those earning over £50,000" could make a further contribution.

But senior party sources stressed they had no plans to set an arbitrary pay limit above which people would be "clobbered" and insisted that their focus was on taxes based on wealth rather than income.

The memo setting out "lines to take" in interviews for the party's MPs said: "In these difficult times, it is important that everyone makes their contribution. It is right that we ask the broadest shoulder to bear their fair share: it is unrealistic to cut more money from welfare spending without increasing taxes on Britain's richest.

"We are looking at how the richest 10% of people, those earning over £50,000, could make a further contribution. The vast majority of people in the country would consider £50,000 a very large salary: these are not the middle income earners."

Lib Dem sources scrambled to combat suggestions they had plans for a new tax, and admitted that people with an income of £50,000 in parts of the country with high costs of living such as south west London would not "consider themselves rich".

The briefing was "cut and pasted" from a similar document sent to MPs a year ago which summarised broadcast interviews in which party leader Nick Clegg suggested targeting taxes at the top 10%.

The memo accidentally circulated to journalists at the party's conference in Glasgow was a "mistake piled upon a mistake" by press office staff, a senior Lib Dem source said.

The source added: "We don't retreat from what Nick said last year, which was that we believe we can have fair taxes that target the wealthy.

"What we do not like doing is drawing a kind of arbitrary income line and say that above that you get clobbered."

Senior Lib Dem MPs said they were in the dark about any new income tax proposal.

Treasury Chief Secretary Danny Alexander said: "I haven't seen this memo, I don't know what it is."
The party's conference was considering whether to increase the tax rate paid by those earning more than £150,000 from 45% to 50% and Lib Dems are committed to a levy on "mansions" worth more than £2 million.

But Lib Dem president Tim Farron said he was unaware of a new £50,000 tax rate proposal: "I've not heard such a suggestion. I certainly have heard a suggestion that we should discuss whether or not someone earning £150,000 might be asked to pay what they were paying some months ago.

"Certainly to many people £50,000 sounds like a decent wage, but let's be honest it's not something that makes people staggeringly wealthy in this day and age, so that's not a direction I would suggest we would go down.

"In terms of fairer taxes for people who are genuinely wealthy - earning at least three times the level you are talking about - and those who are genuinely wealthy in terms of property and broader wealth, (the idea) that they should pay a fairer share at times like this, so people on lower incomes do not have to and can be supported, seems eminently fair and is the kind of thing we've been striving to do over the last three and a half years."

A Liberal Democrat spokesman said: "There is categorically no new Liberal Democrat tax plan to target those earning more than £50,000. Our priority is to tax work less and unearned wealth more. That's why we are planning to cut taxes for working people further and introduce measures such as the mansion tax.

"Any suggestion that we have new tax plans designed to target those earning more than £50,000 is incorrect. This does not reflect the thinking of Nick Clegg or the party's tax working group.

"Anyone interested in the Liberal Democrats' tax plans only has to look at the extensive policy paper published recently by the party which is being debated in public today."

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