Shadow Chancellor wants tax rises for £70k plus earners

John McDonnell, Labour shadow Chancellor, has given an early indication that the party’s manifesto for the forthcoming election is likely to include higher tax rates for those earning over £70,000 and a cap on executive pay

In an interview following prime minister Theresa May’s announcement of a snap election on 8 June, McDonnell said the tax burden currently falls too hard on middle and lower income households and that one of Labour’s election pledges is to make the tax system ‘fair’.

McDonnell said Labour ‘will be looking to the corporations and to the rich to pay their share,’ and when asked to define ‘rich’ said this applied to those earning ‘above £70-80,000 a year’.

‘I think there is a general view in society at the moment that middle and low earners are being hit very, very hard with a combination as we have seen from this government of both income tax rises but also in terms of the burden that is placed upon them by stealth taxes and also as we saw attempts by this government to increase national insurance payments on the self-employed,’ McDonnell told BBC Radio 4’s Today programme.

McDonnell also indicated that Labour would support proposals to introduce a pay ratio which would effectively cap the earnings of executives by linking their remuneration to the average pay of employees.

‘It will be a pay ratio and that in itself will set a cap in terms of what the maximum earning will be within that company in relation to the average worker’s pay because we believe in fairness within our economy,’ he said.

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