John McDonnell and THAT tax comment – the real story

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Shadow Chancellor John McDonnell

The mainstream media – abetted as usual by a selection of the ‘usual suspects’ among right-wing Labour MPs – have attempted to make mischief and distract from the flop of Philip Hammond’s budget by highlighting and attacking Shadow Chancellor John McDonnell’s comment that Labour would support Hammond’s planned increase to the higher-rate tax threshold.

As usual, the faux-outrage doesn’t stand up to scrutiny.

Contrary to what is implied in the attacks, Hammond did not raise threshold for the highest rate of tax, but for those on middle incomes to start paying the next-highest – from £46,384 to £50,024.

Labour has two major tax policies: to reverse corporation tax cuts and to put the top rate of tax, for those earning over £150,000, back up from its current 45% to 50%. Those policies will transfer around £75 billion from the richest back to the rest of us.

The party has also promised, in its last general election manifesto, not to raise taxes at all for anyone earning below £80,000 a year.

None of those promises or policies are at odds with a raised tax threshold for middle earners, especially when a £50,000 salary for a single-income family in the south-east is still not enough to buy a house in many places.

The lowest earners, of course, receive hardly anything – a mere £650 increase in the basic-rate tax threshold, which those on higher incomes also get, as well as the additional £4,000. The net effect of the tax-threshold changes is that low earners only get at best £155 a year more, while higher earners receive £566.

But that is on Hammond and the Tories, not on the Labour Party in opposition. All Labour can do is support or vote against what Hammond has put on the table – and why would Labour vote against a tax-cut for low and middle earners?

The outrage is misdirected. Just for a change, you understand.

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13 responses to “John McDonnell and THAT tax comment – the real story

  1. I wonder what the ‘usual suspects’ have plotted for the run up to next years local election.

    • Forget about the ‘usual suspects’. They are perennial losers. They can’t organize anything, be it a coup or a breakaway party. Even their smears against Labour leadership can’t stick. If I was one of their bribers, I will call time on funding them and ask for my money back from such an inept and incompetent lot. Strangely, I am beginning to feel pity for them for the way they have been captured by big business because I think that if they had the sense to join Labour in the first place, it shows a bit of their decency as human beings. But Blair cultivated and nurtured their greed which got them to forget their decency and they ended up selling their souls to the rich and big business. Quite a sad way of earning a living. It is up to us the membership to unshackle them from their big business capture by deselecting them.

      • I think that if they had the sense to join Labour in the first place, it shows a bit of their decency as human beings. But Blair cultivated and nurtured their greed which got them to forget their decency and they ended up selling their souls to the rich and big business.

        But, Stewart, you’re assuming they had any decency to forget. I’d say what attracted them to New Labour in the first place was its obvious appeal to the unscrupulous and ambitious.

      • Unfortunately they can continue to damage the party’s electoral chances in the meantime. Ask yourself a simple question – Do you think the Labour Party would have done better in the last GE if we hadn’t had to contend with the ‘usual suspects’ constantly undermining JC?

        Take a look at the unchallenged nonsense from Baroness Neuberger and Chukka on last night’s ITV Peston. Watch it from 39mins 30 seconds on-wards

        https://www.itv.com/hub/peston/2a4458a0077

  2. It’s way past time that Labour reclaimed the narrative over taxation. Taxes are a tool for limiting the amount of money in the economy. They have nothing to do with left or right dogma and we need to stop the pretense that Labour is a party of dogmatic taxation of “strivers”. For most of my life the media has used the ” Labour is the party of taxation” narrative to paint them as the enemy of the middle class. McDonnell needs to grow some and publicly state that taxes don’t fund anything, you have to spend before you tax.

    • IMO modern monetary theory is best thought of as the correct description of how the system really works, rather than as a solution to all its ills.
      The system can only work as we wish it to, ie for the many, in the long term if it incorporates tight control of (or destruction of) world financial markets, the closing of tax havens and nationalisation of all banks, enforced open financial records, a single currency (or at least fair and stable exchange rates) and preferably a single corporate tax regime – unless anyone knows how one nation alone can avoid capital flight without the above.
      Got to leave nowhere for the rich to run 🙂

      • Something we do agree on, which is why I didn’t name MMT, because it’s being dismissed as voodoo economics. I doubt McDonnell will go much beyond an investment bank anyway and what’s needed now is to change public perception through some successful Keynesian stimulus…then people might go for it.

      • lundiel, for years I’ve been banging on about the need to take the casino out of the markets by enforcing fixed term investments – but only recessions offer the remotest possibility of convincing enough world leaders of the need.
        Once that’s seen to work the case for scrapping them becomes easier to make.
        That’s my head speaking – my nature actually leans more to pitchforks, clogs and strangulation than negotiating with the fuckers – and if the number of people dying of Tory greed and neglect ever outstrips the number who’d die in the revolution…

  3. It’s rather pathetic the way the BBC and others pick up the merest possibility of conflict within the Shadow Government with such undisguised enthusiasm. The fact it turns out to be rubbished is unreported; job done. In other more serious situations conflict flourishes; Mattis says he will try and persuade the Saudi’s to stop bombing ‘populated areas’ which is then nuanced by the State Department to ‘moves towards de- escalation of the conflict’. De-escalation’ is further trimmed by Mrs May who adds the rather significant rider ‘once a political settlement is reached’.!! Bizarrely or not all day long the BBC has been reporting that May agrees with the Americans about a Cease Fire! It may be this is an error, somebody not knowing what a Cease Fire actually is or a reflection of FCO policy or wishful thinking. The growing shriek of anti Labour media suggests at the very least another snap election is possible.

  4. Yes what should eventuallh do for Neo-Liberalism is its drive for cheap labour which is also affecting professionals with academics for example having had a pay cut of 15% over the last number of years and cheap labour restricts working people from purchasing commodities and only dangerous levels of personal debt (the old credit card) and the Tories Magic Money Tree of quantitative easing has kept the economy going.
    Ending pay freezes and state-led public investment as an example to other countries plus making the rich and corporations pay more (as illustrated here) would stimulate the economy (and feed the private sector supply chain) but with a financial transaction tax and windfall taxes on big business to if and when needed we would have plenty of economic tools in the toolbox.
    Yes the Resolution Foundation argued those on poor pay may be £30 a year better off better off (£0.57p per week) but those on £50k will get 135% more but we shouldn’t fall for the Tory Trap.
    ‘Labour will only make the rich pay.
    If you’re on under £80k u will b ok!’
    A pretty good line.

  5. Well it didn’t take long for the Blairites to start the attack on Labour and it’s leadership yet again.
    This time it’s Cooper and Nandy at it over JMcD acceptance of the tax cuts , stating they will rebell against Corbyn and vote against the acceptance along with the usual traitorous backstabber’s.
    Cooper being particularly hypocritical as she and her ilk stood by
    as part of the opposition that sat on their hands as the Tories cut benefits, proposed in their 2015 manifesto that the NMW would be “over £8 an hour by October 2019.” To most folk that seemed almost insulting by its low expectation level. The TORIES have increased the NMW to £8.19 by April 2019.
    And as usual went bleating to the MSM with utter bollocks about ” having to face their constituents and look them in the eye to justify the decision ” , so …. what about justifying the vote to go to war in Iraq with the majority of membership against it ,,, oh and all the other business friendly eff you the working class decisions she supported.

    Christ I wish we had Open Selection to sort these bastards out of the party , this is a taste of what it will be like if and when Corbyn gets into number 10 .

  6. Right Wing Labour political imbeciles.
    Conned by Tory tax cuts tables.
    See how they rush into the Tory Trap.
    Socialists clean out the Augean Stables!

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