V1499 – Single Income Tax Bill 2019 (Second Reading) Watch

Poll: Should this bill be passed into law?
Yes (15)
39.47%
No (20)
52.63%
Abstain (3)
7.89%
This discussion is closed.
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V1499 – Single Income Tax Bill 2019 (Second Reading), TSR Libertarian Party
[center
Single Income Tax Bill 2019

A bill to simplify the tax system and to introduce a single income tax[/center]

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, and by the authority of the same, as follows:-

1: For the purpose of this act;
(1) National Insurance is an act to provide for insurance against Loss of Health and for the Prevention and Cure of Sickness and for Insurance against Unemployment, and for purposes incidental thereto.
(2) A tax year begins on 6 April and ends on the following 5 April.

2: Repeals
(1) Part1 of Social Security Contribution and Benefits Act 1992 is hereby repealed.
(2) National Insurance Act 1946 is hereby repealed.

3: Employment tax
(1) For the purpose of this act, employment tax is employers paying tax on their employee’s earnings.
(2) The tax rate shall be set at 13.8%.
(3) The tax shall be payable if the amount paid meets or exceeds the threshold.
(i) There shall be a monthly threshold for every tax year.
(ii) The rate set at this threshold shall be £702.
(iiI) If the employees earns below the threshold the employer shall not be liable to pay any tax.
(4) Where employment tax is payable as mentioned in section 3(3) above, the amount of that contribution shall be [the relevant percentage] of so much of the earnings paid in the tax month, in respect of the employment in question, as exceeds the current threshold (or the prescribed equivalent).

4: Single income tax
(1) For the purpose of this act single income tax is a merger of income tax with national insurance contributions.
(2) The basic tax rate shall be 32%.
(3) The higher tax rate shall be 42%.
(4) The additional tax rate shall be 47%.
(5) The tax shall be payable by all eligible taxpayers that earn above the personal allowance.
(6) Single Income tax shall be charged every tax year.

5: State pensions rules
(1) Subject to the provision of this act, qualifying year shall be redefined.
(2) A ‘qualifying year’ is a tax year (April to April) during which you have paid, enough income tax to make that year qualify towards a basic state pension.
(3) The new definition of qualifying year shall replace the definition for the Pensions Act 2014 and substituted to other relevant acts.

6: Commencement, Short title, and Extent
(1) This Act may be cited as Single Income Tax Act 2019
(2) This Act extends to the whole of the United Kingdom
(3) This Act comes into force in April 6th 2020

Notes
This bill aims to simplify the tax system by creating a single income tax. The national insurance operates like a stealth tax and has many layers of bureaucracy and various rates which complicates the tax system. By merging the income tax with national insurance you reduce bureaucracy, save the state money on administration costs and makes the tax system more transparent. The employment tax will act as a replacement for employers national insurance and will operate the same way.

The rates are calculated by adding 12% basic national insurance rate on to basic rate of tax at 20% and 2% higher national insurance rate with higher and additional tax rate 40% and 45% respectively.

Repeals
National Insurance Act 1946
Social Security Contribution and Benefits Act 1992

Costs
For the purposes of these costings, we shall solely look at national insurance and calculate the change in fiscal position as if National Insurance were being retained but modified to be consistent with the bill.

Currently in TSRland for FY 2020-21 National Insurance receipts are estimated to be £149bn, of this £90bn is employer NICs, £51bn from employee NICs, and the remaining £8bn from self-employed NICS.

This bill does three things:
1) it increases the threshold at which "national insurance" is being paid from £8,632 p/a to £15,000 p/a. The effect of this change in isolation is to reduce receipts by £16bn to £133bn
2) The reduced rate of national insurance for self-employed is removed, this increases receipts by £8bn to £141bn
3) The employee NIC exemption for those above the state pension age is removed, this too increases receipts by approximately £8bn to £149bn

Overall the proposed changes are cost neutral.

Changes for 2nd reading
*Fixed clause 2(1)
*Updated costing
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Jammy Duel
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Saracen's Fez this isn't a motion
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LiberOfLondon
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Aye. Simplified taxation can only be good.
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Saracen's Fez
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#4
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One Aye has been removed due to an ineligible vote by Penguin59814.

Two Noes have been removed due to ineligible votes by abucha3 and Lumos_.
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abucha3
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I should have been allowed a vote on this?
Posted on the TSR App. Download from Apple or Google Play
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Andrew97
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#6
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(Original post by abucha3)
I should have been allowed a vote on this?
The MP that you replaced had already voted, I was just making sure to cover all bases (ie if both of you vote then 1 of the votes will be eligible)
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Saracen's Fez
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The Ayes to the right: 15
The Noes to the left: 20
Abstentions: 3

The Noes have it! The Noes have it! Unlock!

Turnout: 76%
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