Labour's Telephone Tax

I work in the Telecommunications industry, and am therefore particularly interested in how the parties propose to fund Broadband expansion. For the same reason I am careful what I say about this subject, and I always either formally declare an interest or make clear that I am an employee of a telephone company when the subject comes up at council meetings.

Having got that out of the way, I want to refer to an interesting post by Mike Smithson at "Political Betting" on the subject of Labour's proposed £6 a year tax on landline telephones.

Mike points out that a particular weakness with "hypothecated taxes" - e.g. where the revenue from a tax is specifically earmarked for a particular purpose - is that people who have to pay the tax and do not benefit from that programme may regard it as extremely unfair.

He suggests that there is a group of people for whom a landline phone may be an important safety net, many of whom are on low incomes (and may therefore find £6 a year significant) and many of whom are not particularly interested in high speed broadband. As Mike puts it

"my guess is that it’s really going to irritate those most reliant on land-lines for whom that sum of money might seem a lot - old age pensioners."

You can read the full post here.

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