By Richard Elsy

Last updated 11:35, Monday, 12 May 2008

It’s really difficult to understand why the 10p tax band issue has raised such a massive level of interest, which seems to have had a disastrous effect on the Government’s fortunes in the local elections.

Yes – it is inexcusable that the lowest paid should suffer any increase in taxation at a time when food price inflation is kicking in, not to mention fuel, electricity and gas price rises. If even a couple of million get clobbered for another £3.50 a week it is inexcusable.

However, it’s worth standing back a little and asking another question – Why, in this day and age, in the fourth biggest economy in the world, are people earning under £12,000 per year being taxed at all? A gross salary of £231 per week isn’t going to go very far in supporting a family and, after tax and National Insurance are deducted, it will leave significantly under £200 to cover everything from the rent or mortgage, fuel and transport to and from work, to food and drink, TV licence and the rest.

Ah – but we have the tax credits to make everything all right. However, I’ve lost track of the number of times the Government has made a hash of these sort of schemes – identity data losses, IT breakdowns in the NHS, CSA failure to deliver child support, and of course the overpayments of tax credits which had to be repaid.

Does it ever cross your mind to wonder how many people are employed to administer all these agencies? There are literally millions of jobs which were created solely to perpetuate these massively inefficient and ineffective departments or agencies of government. A move in the right direction would be to abolish income tax for anybody with an income of less than £12,000 per year. Yes, there would still be people who would need further assistance for good reason, but at a simple stroke you would relieve several million people of an unjust and unbearable burden and cut public expenditure – which is what drives the need for tax in the first place.