Shadow Chancellor John McDonnell was grilled by BBC Money Box presenter Paul Lewis this morning, on the possibility pensioners on £20,000 would be forced to hand over more money to the taxpayer under a Labour Government. Mr McDonnell admitted pensioners would have to fork out an extra £1,000 each year in capital gains and dividends, to help establish a “fairer system”. He said people should have to pay a just amount in taxes no matter the way the money was earned – including pensions.
The BBC presented told Mr McDonnell: “You have other tax changes that will affect people on much lower income, don’t you?
“Dividend tax, for example, is going to be raised from quite a low rates up to the same rates as income tax.”
The Labour frontbencher insisted the changes the Labour Party is proposing would help Britons received a fairer treatment when it comes to paying taxes.
But Mr Lewis hit back: “I think everyone can understand that principle but it’s how you get there.
I was doing some arithmetic and some pensioners, for example, might be earning £10,000 in dividends.
“Say roughly £10,000 from pensions, £20,000 is not a fortune.
“Yet they will be paying an extra £1,000 compared to what they are now.”
The BBC host added: “Don’t you think it’s sad pensioners on £20,000 to pay an extra £1,000?”
But Mr McDonnell insisted the taxation was just and said Labour’s policy would help build a fairer system.
He said: “Capital gains tax and dividends I think, actually, whether you earn your income through work or whether you do it through your investments, you should be paying the same. On that basis, I think you have a fairer system.
“The bulk of them, I think it’s over 60 percent – we’re talking about investments over a million – there are some who have a small income coming in like that.”
The shadow Chancellor added: “What we are trying to do is establish a fairer system where everyone is treated fairly.
“This principle of however you earn your income, you should be treated the same is fundamental.”
As a result of the comments, Express.co.uk is asking you, our readers, if you agree that pensioners earning £20,000 a year should be taxed an extra £1,000 a year?
It comes after Jeremy Corbyn said only the rich will have to pay more tax under a Labour government.
When launching the Labour Party manifesto he said only those earning over £80,000 would pay more income tax under them.
But the tax increase will not be indexed to prices, meaning that as wages rise over time, more and more workers will fall into the higher tax bracket.
The Institute for Fiscal Studies has said the number of workers who fall into the bract could rise by 24 percent in the next Parliament alone.