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    B215 - Tax (Amendment) Act 2009, Libertarian

    An Act to amend the Tax Act 2007 so as to reform the tax-free allowance based on the poverty level estimated by the Joseph Rowntree Foundation.

    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:

    (1) After section (1) of the Tax Act 2007 insert –

    (1A) Tax Free Allowance
    (i) The Tax Free Allowance is £12,000
    (ii) The Secretrary of State shall review the Tax Free Allowance annually, to insure it rises with the Purchasing-Power Parity level of Actual Poverty.

    (2) Commencement, Short Title, and Extent
    (i) This Act may be Cited as the Tax (Amendment) Act 2009.
    (ii) This Act comes into force 1st May 2010
    (iii) This Act extends to England, Scotland, Wales and Northern Ireland
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    Right now I could kill the Libertarian Party.

    What the hell?

    Your bill would KILL our deficit and make it pretty much impossible to claw it back down.
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    Would the Libertarian Party suggest cuts in particular areas to check government expenditure?
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    (Original post by LawBore)
    Would the Libertarian Party suggest cuts in particular areas to check government expenditure?
    No the Libertarian's will do a typical USA Republican thing. Cut taxes alot, before never getting around to the Spending Cut's and causing a HUGE deficit increase.
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    In an ideal world yes, but if this house is to be realistic, at this time definatly not.
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    What? This is the liberatarian party, you should be advocating a flat tax on all income.
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    We're starting small, and making sure that someone who is in actual poverty doesn't pay tax is a moral issue, whatever the cuts are that we must make to pay for this, it needs to be done.
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    I could only agree if it was £14,000 tax free allowance.
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    I actually agree with this. Although I do think we should tax the very rich more to compensate somehow. But I do believe in raising the basic tax free allowance.
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    (Original post by LawBore)
    Would the Libertarian Party suggest cuts in particular areas to check government expenditure?
    The Libertarian Party would suggest cutting ministers salaries or expenses. The exact amount that we'd be required to save is currently being worked out, but if spread across all departments we doubt will amount to a massive amount. Certainly not "vicious cuts to front-line services"
    (Original post by AfcWimbledon2)
    Your bill would KILL our deficit and make it pretty much impossible to claw it back down.
    Right, so the government racks up a massive deficit bailing out rich bankers who were too greedy, and you propose to pay for it by taxing the poorest in society? Isn't that the very definition of privatising the profit and socialising the costs?
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    (Original post by sconzey)
    The Libertarian Party would suggest cutting ministers salaries or expenses. The exact amount that we'd be required to save is currently being worked out, but if spread across all departments we doubt will amount to a massive amount. Certainly not "vicious cuts to front-line services"

    Right, so the government racks up a massive deficit bailing out rich bankers who were too greedy, and you propose to pay for it by taxing the poorest in society? Isn't that the very definition of privatising the profit and socialising the costs?
    I said nothing of the sort. However how much many do we lose by increase the cap?
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    (Original post by sconzey)
    We're starting small, and making sure that someone who is in actual poverty doesn't pay tax is a moral issue, whatever the cuts are that we must make to pay for this, it needs to be done.
    There I was thinking the Libertarians kept out of "moral issues"!

    I would love to support this, but I need convincing it's affordable.
    I also agree with usainlightning. In my ideal world there would be a low, flat-rate of tax, with room for a tax-free allowance (or perhaps a negative tax rate) for the very low income-earners.
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    I don't see what is so great about the flat tax, frankly. But I will support this.
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    (Original post by Bagration)
    I don't see what is so great about the flat tax, frankly. But I will support this.
    It forces efficiency in public services and encourages entrepeneurs to move or stay here, which creates jobs. The aim would always be to try and reduce the flat rate as the revenue increases year-on-year, while obviously maintaining excellence in public services.

    That's my understanding of the theory at least. Possible complete ********.
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    (Original post by AnythingButChardonnay)
    It forces efficiency in public services and encourages entrepeneurs to move or stay here, which creates jobs. The aim would always be to try and reduce the flat rate as the revenue increases year-on-year, while obviously maintaining excellence in public services.

    That's my understanding of the theory at least. Possible complete ********.
    On the other hand, it appears, at least to me, to be somewhat unjust that a MD pays the same % of his income to tax as, say, a binman.
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    Could the libertarians put forward an estimate of the cost to state tax income by implementing this?
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    (Original post by Afcwimbledon2)
    No the Libertarian's will do a typical USA Republican thing. Cut taxes alot, before never getting around to the Spending Cut's and causing a HUGE deficit increase.
    Yes, that's right. Because we're so thoroughly against cuts.

    Where the cuts come from isn't really our "problem" (and by that I mean we on TSR don't make a budget or anything like that. As such, the results of this bill would be similar to if we remained in recession and tax receipts went down naturally. It's up to you MPs to decide whether to decreased budget potential is worth trading for so many people having more money in their pockets at this time. As we don't write the budget, it's not our place to define exactly where those cuts will come from.)
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    My very rough figures suggest something in the region of £25bn, but I could be way off. It's based on the assumption that the tax free income rising to 12k means that there's an "extra" 6k that's now not being taxed. The first 2k of that would have been @ 10%, the next 4k @ 22% = £880 a person loss. There are approx 29m taxpayers in the UK atm, so 880x29m = £25bn. Though I think I've forgotten that fact that the 10% rate will now come after the £12k, so actually it'll be a slightly greater loss than that. Maybe £30bn. Approx 5% of our tax revenue.
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    (Original post by Bagration)
    On the other hand, it appears, at least to me, to be somewhat unjust that a MD pays the same % of his income to tax as, say, a binman.
    Indeed. There would have to be some jiggling.
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    (Original post by Alasdair)
    I actually agree with this. Although I do think we should tax the very rich more to compensate somehow. But I do believe in raising the basic tax free allowance.
    Thank you for your support on this, Alasdair. I’d welcome the opportunity to debate your policy on the tax threshold/increases for the richest in society.

    (Original post by usainlightning)
    What? This is the liberatarian party, you should be advocating a flat tax on all income.
    There is nothing compromising about a Libertarian party cutting tax piecemeal, starting with the poorest section of society. It is a false dichotomy to suggest that the Libertarian Party must take the ‘all or nothing approach’.

    This is because we do not hold a monopoly on the power to pass Bills and rightfully so. There are other views to consider such as the Socialists whom have legitimate MPs in the TSR HoC. That’s democracy. It means we can’t just do whatever we want.

    Now in reference to the effects of this tax amendment, raising the personal allowance to £12,000 would take 7 million low-paid workers out of the income tax net altogether People earning the minimum wage or less would pay no income tax at all.

    This tax cut would put about £19bn per year back in people's pockets (according to real life figures), allowing considerable additional spending and investment in the economy. This is the key to overcoming recession and restoring economic growth.

    As well as stimulating the economy by giving people more disposable income to spend and invest, raising the personal allowance to £12,000 would strengthen incentives to work, help to eliminate the 'poverty trap' and make low-paid jobs more economic – greatly increasing opportunities for the unemployed.

    The Liberal Democrats also suggested a similar proposal in real life along the same grounds.
 
 
 
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