Two cheers for Nick Clegg’s tax cuts

It’s tempting to see Nick Clegg as a champion of lower taxes. He’s nudged the tax threshold up over this parliament and in a letter sent out to Liberal Democrat members  (while David Cameron is out of the country) he suggests the state should only start to confiscate earnings from people when they hit £10,500 a year, higher than his current target of £10,000, from April 2015. He has this to say:

Think of it as a workers’ bonus. The British people have lived with austerity for three years. Your sacrifices are making it possible for us to fix the economy*. This is your recovery and you deserve to feel the benefits – without delay.”

While I applaud his focus on those on low incomes, this is a rather weak solution. The problem with raising the tax threshold is that, as a policy, it occupies the space where a proper tax for the low-paid cut should be.