Liberal Democrats propose 4p cut in Income Tax

4.05.00pm UTC (GMT +0000) Thu 12th Jul 2007

The Liberal Democrats have unveiled radical plans to cut the basic rate by four pence in the pound, benefiting millions of people on low and middle incomes. The party's proposals are tax neutral and have been independently evaluated by the IFS. The proposals in the party's new tax paper include:

· Reaffirming the commitment to abolishing Council Tax, replacing it with a tax based on ability to pay

· Removing tax loop-holes exploited by the super-rich

· Radically simplifying the tax code, removing over 500 pages of unnecessary regulations

· Reforming stamp duty to reduce the amount of tax paid on properties worth less than £500,000

· Reforming Inheritance Tax, with the aim of raising the starting threshold to £500,000

Liberal Democrat Leader Sir Ming Campbell said "The unacceptable reality is that in Britain today the poorest pay a higher proportion of their income in tax than the super-rich. Under our proposals tax cuts for the majority will be paid for by the wealthy minority, as well as those with environmentally damaging lifestyles. Only the Liberal Democrats have produced a costed plan to create a tax system that is fair, simple and green. I challenge Gordon Brown and David Cameron to back up their rhetoric by endorsing our plans."