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Clegg sets out tax-cutting plans Clegg sets out tax-cutting plans
(about 2 hours later)
Liberal Democrat leader Nick Clegg has marked a party policy shift by signalling his intention to cut tax for low and middle-income families.Liberal Democrat leader Nick Clegg has marked a party policy shift by signalling his intention to cut tax for low and middle-income families.
In a speech in London, he explained plans to crack down on tax avoidance and reform capital gains, corporation tax and pension tax relief. He said he wanted to go "much further" than previous tax-neutral packages and see if overall levels of tax taken by the state could be reduced.
The party leader said he would tighten loopholes but fight against "excessive taxation" levels. In a speech in London he said he would tighten loopholes but fight against "excessive taxation" levels.
Mr Clegg has accused the government of acting unpredictably on fiscal issues. Mr Clegg accused the government of acting unpredictably on fiscal issues.
He outlined plans to crack down on tax avoidance and reform capital gains, corporation tax and pension tax relief in a speech to the Policy Exchange think tank earlier.
'Means, not an end''Means, not an end'
Speaking to the Policy Exchange think-tank, he said he would tighten loopholes which allow individuals and firms to do business in the UK but keep their wealth in off-shore trusts. He said he would tighten loopholes which allow individuals and firms to do business in the UK but keep their wealth in off-shore trusts.
The Lib Dems would index-link capital gains to inflation and tax them as income, he added. The party would also cut the headline rate of corporation tax and would limit relief on pensions for higher rate taxpayers.
Gordon Brown treats tax likes Forrest Gump treats a box of chocolates - you never know what you're going to get Nick Clegg, Lib Dems It is ludicrous that the poorest people still pay a higher proportion of their income in tax than the richest do Nick Clegg, Lib Dems
The party would also cut the headline rate of corporation tax, Mr Clegg pledged. Mr Clegg said: "We are not ready to accept the government's proposed overall level of taxation, and will look in depth at whether it can, and should, be cut.
And the Lib Dem leader said he would limit relief on pensions for higher rate taxpayers. "Over the course of 11 years of the Labour government, we have seen National Insurance bumped up, council tax sky rocketing, stamp duty quadrupled, dozens of minor stealth taxes imposed, and now the 10p rate of income tax doubled.
Mr Clegg added: "Tax is not a good thing in and of itself. Tax is a means to an end. So governments must never tax for the sake of it." "It is ludicrous that the poorest people still pay a higher proportion of their income in tax than the richest do. It is an immoral use of excessive taxation on those who can afford it least."
Council tax
He criticised Gordon Brown's record as chancellor, including the manner of the abolition of the 10p income tax rate in his final Budget and the "fiendishly complicated" tax credits system.He criticised Gordon Brown's record as chancellor, including the manner of the abolition of the 10p income tax rate in his final Budget and the "fiendishly complicated" tax credits system.
Mr Clegg said: "It's a tombola tax system. Gordon Brown treats tax likes Forrest Gump treats a box of chocolates - you never know what you're going to get."Mr Clegg said: "It's a tombola tax system. Gordon Brown treats tax likes Forrest Gump treats a box of chocolates - you never know what you're going to get."
BBC political correspondent Laura Kuenssberg said the plans were a sign that, in a harsher economic climate, the debate on tax was shifting. And he accused Conservative leader David Cameron of shedding "crocodile tears" about the impact of high tax rates on the poor, when his main tax pledge was to reduce inheritance taxes.
At the Liberal Democrat spring conference in March Mr Clegg suggested that tax cuts should be on the agenda.At the Liberal Democrat spring conference in March Mr Clegg suggested that tax cuts should be on the agenda.
The party is already committed to a 4p reduction in the basic rate of income tax.The party is already committed to a 4p reduction in the basic rate of income tax.
But in his speech Mr Clegg said the Lib Dems would "look in depth" at whether to go further.But in his speech Mr Clegg said the Lib Dems would "look in depth" at whether to go further.
He also reiterated his party's policy of scrapping council tax and replacing it with a local income tax.He also reiterated his party's policy of scrapping council tax and replacing it with a local income tax.