The Case for Income Tax Reform.
Posted by: u5227470736789439 on 07 May 2008
The recent rumpus over the increase in Taxation for the five million or so of the lowest income people [low paid workers, some pensioners, and other smaller groups] with the abolition of the 10% tax bracket, and the implementation of 20% would have been solved without difficulty if the Personal Allowances had been raised in accordance with keeping the Tax take at a no change situation. This simple fact seems to have escaped Mr Brown, and he has been caught out by it.
I would propose a more radical approach to Income Tax:All personal allowances would be set at the level which is at or just above what is considered the poverty line.
If the poverty line is statistically considered £9000 PA, then the personal allowance would be set at this level or just above, so that any individual is not taken into poverty because of taxation. Then I would propose a single rate of taxation for all income, capital gain, corporate taxation, and other income related taxation to keep the situation, net no change in the first instance for the Treasury.
I am sure there are some very bright and knowledgeable people here, who can add more to this, than I, but I reckon the idea has several advantages. Simplicity and therefore fewer loopholes to be taken advantage of, and less demand for a huge superstructure of tax collectors working for the Government, themselves adding a massive cost [and a cost with no economically positive aspect] to an already stressed exchequer. This even without considering that Civil Servants now have a virtually uniquely privileged position with regard to pensions, which will cost a huge amount for a very long time into the future, so the more the numbers involved is reduced the better for everyone.
It would ease the lives of a huge number of people at the bottom of the earnings pile as well, and leave only the iniquitous Council Tax in place as more or less a Pole tax.
The Council tax has about doubled in the last ten years, whereas the lowest paids' rate of income has been much less than a doubling over the decade.
Therefore the Council Tax has become a proportionally much greater burden on the poorest people than the current issue with the abolition of the 10% bracket, and on an annual basis. This also seems to have escaped general note or comment.
George
I would propose a more radical approach to Income Tax:All personal allowances would be set at the level which is at or just above what is considered the poverty line.
If the poverty line is statistically considered £9000 PA, then the personal allowance would be set at this level or just above, so that any individual is not taken into poverty because of taxation. Then I would propose a single rate of taxation for all income, capital gain, corporate taxation, and other income related taxation to keep the situation, net no change in the first instance for the Treasury.
I am sure there are some very bright and knowledgeable people here, who can add more to this, than I, but I reckon the idea has several advantages. Simplicity and therefore fewer loopholes to be taken advantage of, and less demand for a huge superstructure of tax collectors working for the Government, themselves adding a massive cost [and a cost with no economically positive aspect] to an already stressed exchequer. This even without considering that Civil Servants now have a virtually uniquely privileged position with regard to pensions, which will cost a huge amount for a very long time into the future, so the more the numbers involved is reduced the better for everyone.
It would ease the lives of a huge number of people at the bottom of the earnings pile as well, and leave only the iniquitous Council Tax in place as more or less a Pole tax.
The Council tax has about doubled in the last ten years, whereas the lowest paids' rate of income has been much less than a doubling over the decade.
Therefore the Council Tax has become a proportionally much greater burden on the poorest people than the current issue with the abolition of the 10% bracket, and on an annual basis. This also seems to have escaped general note or comment.
George