Liberal Democrats in government have cut taxes for people on low and middle incomes, to help families get by. We have gone even further than our manifesto pledge to let people earn £10,000 tax free by increasing the personal allowance to £10,600. This will have lifted over three million people out of income tax altogether and delivered a tax cut of more than £800 for millions of low and middle income tax payers.
Our aim is to rebalance the tax system away from taxing work and towards unearned wealth, so the next generation can keep more of the money they earn and live in a more equal world. We will raise the personal allowance to at least £12,500, cutting taxes for those on low and middle incomes by around a further £400. And as we finish the job of balancing the books, we will clamp down on tax avoidance and use taxes on the wealthiest, on banks and big business and on polluters, to limit the impact of deficit reduction on public services. This will include taxes such as a Mansion Tax on residential properties worth over £2 million.
We do not think low and middle income earners should bear the burden of tax rises to tackle the deficit: our plans do not require any increase in the headline rates of Income Tax, National Insurance, VAT or Corporation Tax.