Labour leader Andy Burnham has called for the immediate abolition of the £100,000 income tax threshold, describing the current mechanism as a distortion that penalizes high earners and stifles economic activity.
The proposal targets the additional rate taper, which effectively creates a marginal tax rate of 60% for individuals earning between £100,000 and £125,140, as personal allowance is withdrawn at a rate of £1 for every £2 earned above the threshold.
The intervention marks a significant pivot in the party's fiscal messaging, moving away from broad-based tax increases toward targeted structural reforms.
Burnham argued that the current system discourages productivity and entrepreneurship, particularly among professionals and small business owners who often draw salaries above the threshold.
By removing the taper, the government could simplify the tax code and reduce the effective burden on those in the upper-middle income bracket.
This stance aligns with Burnham's recent warnings that the British economy is in no position to endure additional tax increases.