Conservative leadership favourite Boris Johnson has announced he would cut income tax for the highest earners if he became the Prime Minister.
Johnson indicated he would raise the 40p threshold from £50 to £80k.
Boris used the Telegraph to make his case for the cut, saying: “We should be raising thresholds of income tax – so that we help the huge numbers that have been captured in the higher rate by fiscal drag.”
This would cost the country almost £10 billion a year (£9.6 billion) which he hopes would be offset by saving from Brexit.
However, Emmanuel Macron has warned the UK would face consequences if it failed to pay its £39 billion Brexit bill.
If the UK defaults on its payments, it will be punished by international markets which could lead to a devaluation of the pound and lower national credit scores.
Johnson also wants to cut corporation tax, which is already at a low 19 per cent.
John McDonnell, the shadow chancellor, said: “Exactly as predicted, the Tory leadership race is degenerating into a race to the bottom in tax cuts. When there are 4.5 million children in poverty, 1 million elderly in severe poverty, the schools’ budgets and our police service stretched to breaking point, this [is] the Tory priority.”
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