Promising to only raise taxes for the top 5% of earners, Mr McDonnell said Labour would retain its tax plans from the 2017 general election manifesto almost unchanged, and also reduce the threshold for the 45p tax rate to £80,000.
Unveiling Labour’s NHS investment offer, the shadow Chancellor said the first full week of the general election campaign had seen “the Tories show their true colours” with what he said was a series of “fake news” claims about opposition tax and spending plans.
Mr McDonnell claimed Sajid Javid had refused to take part in a head-to-head televised debate with him because the Chancellor “realised that we would be able to cut through the lies that they’ve been concocting about our spending plans”.
“As I have said before, income tax rates, national insurance, and VAT will not increase for 95%. It is only the 5% we will ask to pay a little more,” McDonnell said.
“We will reduce the threshold for 45p rates to £80,000 and reintroduce the 50p rate for £125,000. That is our pledge.”
The shadow Chancellor added: “It is only the top 5% that will contribute a little more at the end of the tax year – because their shoulders are broad enough to bear this. And because our society as a whole gains from that contribution.”
Labour’s tax plans would see those on salaries over £80,000 taxed at a higher rate than in Scotland, where a 41p rate applies on earnings up to £150,000, rising to 46p for those on higher salaries.