Lib Dems plan tax hike on £1m homes

Published on Monday 21 September 2009 16:20

VINCE Cable today announced plans to clobber the wealthiest homeowners as part of a massive Liberal Democrat tax-raid on the rich.

In a direct bid to attract traditional Labour supporters to the Liberal Democrats, the economic affairs spokesman promised to prioritise income tax cuts for low and middle-earners.

That would be funded by a 17 billion package of tax hikes elsewhere, including a new levy on the estimated 250,000 houses worth more than 1 million.

Other moves would include a crackdown on top earners, including City traders, who pay capital gains tax on their earnings at 18% rather than the 40% top rate of income tax.

Pensions tax relief for higher earners would also be scrapped and the capital gains tax exemption cut from 10,000 to 2,000.

The highly-redistributive tax reforms – including taking four million low-earners out of income tax altogether – come as the Lib Dems seek to supplant Labour as the party of the left.

But Mr Cable also warned that he would have to take decisions on public spending that would not be easy or popular and refused to rule out the prospect of overall tax rises at some stage.

The Steamie: Gerri Peev blogs from the Lib Dems' conference

Following Lib Dem leader Nick Clegg's warnings of the need for "savage" spending cuts, Mr Cable said he wanted to curb pensions in the public sector and freeze its overall salary bill.

He also promised to end tax credits for the higher-paid and to take an axe to dozens of quangos.

But he insisted that the Lib Dems were "fundamentally different from" the Conservatives.

"The Tories' top priority is to cut taxes on millionaires," he told delegates in his keynote speech to the Lib Dems' annual conference in Bournemouth.

"Our top priority is fairer taxes for those on lower and middle incomes."