Cut and Paste 10p tax rate

A bit off topic but I recently complained to my MP about the abolition of the 10p tax rate which whilst it makes me better off doesn't make a lot of other people who need money more than me better off.

I know a lot of people have probably complained but I do find cut and paste responses amusing

Dear Mr X (no I'm not called Mr X although X is actually better than my real surname)

I am writing to you in response to your letter regarding the abolition of the 10% tax band, as announced in the 2007 Budget which was implemented from April 2008.

I am extremely concerned and shocked that there are so many people who stand to lose out from these tax changes. As a first step I wrote to the Prime Minister Gordon Brown and to the Chancellor Alistair Darling to express my concern over the impact that changes to the tax system may have for many households. This was picked up with great interest by the national news. Hopefully this will add the pressure on the Government to introduce mitigating measures as soon as possible.

As you may remember, the 10% tax rate was introduced in 1999 as an interim measure in the hope of encouraging people on long-term benefits to go into work. In 2003, Gordon Brown, then Chancellor, introduced Tax Credits. Tax Credits are directed at those who need them most: children, low income households and pensioners.

Tax credits can make up for many of the losses incurred from the changes in tax rates as long as one claims all the tax credits they are entitled to. For families with children, the Child Tax Credit child element increases by £175 above earnings indexation from £1845 to £2085, providing additional financial support for families and further reducing child poverty.

For those in low income in work, the first income threshold of Working Tax Credit rises significantly from £5220 to £6420, supporting work as the best route out of poverty by increasing the gain for work for many low income households. I am aware that there are particular groups entitled to certain Tax Credits who are not taking these up, and as a result may be worse off following the abolition of the 10% tax band. I realise that there are still many people who do not fall under any of these categories, and I will carry on fighting on their behalf and will contact you again.

Pensioners’ personal allowances have been raised by £1180 above inflation in this year’s Budget-meaning that many pensioners do not start paying tax until their earnings reach a high amount. Because of this, by 2009, only 41% of pensioners over 65 will pay any income tax at all.

I hope this letter has been helpful and I will be sure to contact you again to keep you updated with any developments on this issue. If I can be of further assistance to you on this, or any other matter, please do not hesitate to contact me again.