Letter: Taxing issues

Published on Sunday 31 October 2010 15:47

The Chancellor's claim that swingeing public expenditure cuts are essential to deal with our massive public debt is clearly wrong (your reports). Like private household debt, public debt can also be reduced by increasing income - in the government's case through taxation.

When Margaret Thatcher came to power in 1979, the basic rate of income tax was 33 per cent and the top rate (for incomes over 20,000 per year) was 83 per cent; but my main memory of that time is more of the severe financial problems caused by the massive rise in mortgage interest rates (due to her monetarist economic policy) rather than resentment of the income tax rates.

I've no idea how much current income tax levels would need to be raised to make a substantial dent in the public debt; but I suspect that they would not need rise to anything like to those in the 1970s.

And since income tax is intrinsically progressive, it seems to me to be a "fairer" way of dealing with the problem than cutting services which disproportionately support the less advantaged.

COLIN WEATHERLEY

Gullane

East Lothian