Link to this page: https://www.socialistparty.org.uk/issue/529/4024
Tax attack hits low paid workers
GORDON BROWN and New Labour are carrying out daylight robbery against the lowest paid workers. More of our wages will now be taxed at 20%, following the abolition of the 10p in the pound starting rate of tax. That means an effective wage cut for millions of workers.
Tom Penman, CWU member and call centre worker, Dundee
The income tax rise will hit the living standards of many young workers who will suddenly find themselves out of pocket. The minimum wage at its full rate or 'development rate' is already a poverty wage without the government stealing more of it off us.
In workplaces that pay above the minimum wage or where gains in pay have recently been made, the tax increase will be come as a bitter blow. In my call centre, the union has won a 3% pay increase from management. But, because of the tax increase, we are worse off now than before the pay increase.
Instead of increasing taxes on the lowest paid, the government should reverse the 5% cuts in corporation tax it has made over the last decade and close the 'taper' tax loopholes that allow the super-rich to claim £4.5 billion in tax relief each year.
The government tries to defend the tax increases by saying that tax credits will cover the increase and some families may be slightly better off. But working tax credits cannot be claimed by under-25s unless you have children, meaning that many young workers will be worse off. Even when someone does qualify, the process of claiming the credits can be so tortuous it puts people off.
Less than 20% of people who are eligible for working tax credits claim them. The government can create all the figures it wants showing how some families will be better off once credits are included, safe in the knowledge that most will never claim them.
This mean-spirited government has carried through a policy of cuts and privatisation in the public sector, looking at schools, hospitals and job centres with an eye to see what can be sold off or rented out to increase the profits of the private sector.
We desperately need change! The parties in Westminster and Scotland's parliament in Holyrood represent the interests of big business and the rich. With the coming recession they can only promise us that things will get harder.
If we want better wages, public services or working conditions we'll need to fight for them ourselves. This includes organising and unionising our workplaces but it also means organising politically to fight for a world free of the anarchy of the free market and the poverty it creates - for a socialist society where the world's resources are used democratically to provide a decent standard of living for everyone.
- No to Labour's tax increase for low-paid workers
- Tax the rich and big business
- Build a campaign against low pay and poor conditions
- Fight for socialist change
In The Socialist 16 April 2008:
Workplace news and analysis
Global food crisis
Socialist Party election campaign
Socialist Party feature
Socialist Party news and views
International socialist news and analysis