The first thing to remember is that taxes nowhere near fund our public services. However, I do think if they lowered income tax they'd probably take more revenue as people would spend more money which can be collected through VAT, Corporate Tax and economic growth.
My view is:
1. National Insurance should be scrapped so we just have one very clear income tax.
2. The tax bands should increase each year with inflation.
3. The personal tax free allowance should apply to everyone and not just those earning less than Β£100,000 per year.
4. The personal tax free allowance should increase in line with the minimum wage so no one on the minimum wage pays income tax.
5. Benefits should be capped at the tax free allowance.
6. The 40% tax bracket should not kick in until Β£75,000 or where it should kick in if it had moved with inflation.
7. The 45% tax bracket should kick in at Β£250,000, again to ensure it moved with inflation.
8. There should be a super all-in tax of 49% on those earning more than Β£500,000 in basic salary (i.e. celebrities, senior bankers and corporate executives)
The problem with our tax system is that everyone is taxed heavily rather than the super top earners, who are taxed nearly the same as those on extremely modest incomes.
I've always found it bizarre that a middle class earner on Β£150,000+ basic salary is in the same tax bracket as a CFO on Β£800,000 who in turn is in the same tax bracket as a hedge fund manager on Β£10,000,000. No idea why our tax system doesn't account for the large disparity in earnings.
They need to address corporate tax too as many companies aggressively avoid this.
Posted from TSR Mobile