The 'Shadow' Chancellor, Labour's Ed Balls, has proposed some ideas for the upcoming UK budget.
Each proposal would cost £12 Billion.
He is only proposing to do one of these (I think).
The idea is that any of these would provide a boost to the economy by putting money into the pockets of lower earners and they would then spend it, etc.
The last proposal 'bringing forward the increase in tax free pay' is pure mischief making. He knows it is Coalition policy. He knows that it is something that is close to the heart for the Lib Dem members of the coalition and so just seeks to sow some division!
Higher Tax credits? I can't help but feel that we need less welfare dependency - a whole lot less - and this doesn't do it. People should get to keep more of their money not have to pay it into the government coffers and then be given it back!
3% cut in income tax for a year. A short term boost but, it might then lead to a permanent cut. I can just imagine, 12 months after this has been implemented, that Balls would be saying ' the removal of this time-bound policy, would lead to a flight of confidence from the economy...............' In my view taxes should be cut and then stay cut!
A 2.5% cut in VAT - Make it 5% and make it permanent. Enshrine in law that the maximum permitted VAT can be 15% and can only be increased by way of a referendum! Also, remove VAT completely from energy costs. This latter is trapping many people in 'fuel poverty'.
My budget ideas
How to fund this?
The balance - do like Ed Balls always says Borrow. I think though that the stimulating effect would reduce the actual borrowing need.
- A 2.5% cut in VAT or
- A 3% cut in income tax, for a year or
- Higher tax credits or
- Bringing forward the increase in tax free pay
Each proposal would cost £12 Billion.
He is only proposing to do one of these (I think).
The idea is that any of these would provide a boost to the economy by putting money into the pockets of lower earners and they would then spend it, etc.
The last proposal 'bringing forward the increase in tax free pay' is pure mischief making. He knows it is Coalition policy. He knows that it is something that is close to the heart for the Lib Dem members of the coalition and so just seeks to sow some division!
Higher Tax credits? I can't help but feel that we need less welfare dependency - a whole lot less - and this doesn't do it. People should get to keep more of their money not have to pay it into the government coffers and then be given it back!
3% cut in income tax for a year. A short term boost but, it might then lead to a permanent cut. I can just imagine, 12 months after this has been implemented, that Balls would be saying ' the removal of this time-bound policy, would lead to a flight of confidence from the economy...............' In my view taxes should be cut and then stay cut!
A 2.5% cut in VAT - Make it 5% and make it permanent. Enshrine in law that the maximum permitted VAT can be 15% and can only be increased by way of a referendum! Also, remove VAT completely from energy costs. This latter is trapping many people in 'fuel poverty'.
My budget ideas
- Scrap the minimum wage for those under 25
- Undertake a complete review of all HS&E legislation with a report due back within 6 months. Starting point is that all legislation should be scrapped. Any that are found necessary to be maintained, must be fully costed as to the economic impact for the country.
- Apply same process to Equality legislation with a view to capping compensation levels at £100,000 and equalizing cap for all forms of discrimination.
- Remove the 50% income tax level
- Reduce the entry level income tax rate from 20% to 15%
- Reduce the new high income tax rate, from 40% to 35%. So we have two levels 15% and 35%.
- Cut Employer NI contributions, on all new employees hired after budget date to zero for first three years
- Plan to incorporate personal employee NI contributions into Income Tax inside of a couple of years and cap at 10%
- Increase personal tax free allowance to £15,000
- Means test supplementary payments to pensioners. Rich OAPs do not need the Winter Fuel allowance, etc.. However, any money saved, from a 2011 baseline cost, should then go to the remaining pensioners. We're all in this together!
How to fund this?
- Dramatically cut back and restrict salary levels at the top of all publicly funded organizations.
- Treat MPs the same as other tax payers - they must pay taxes on expenses.
- Undertake a complete review of all Quangos with a report due back within 6 months. Starting point is that all should be scrapped. Any that are said to be necessary to be maintained, must be fully costed as to the economic impact for the country and the results published. Then hold a referendum and a number (say something less than 50) selected to be retained. People get to vote on say, 5 of however many and the top 50, in vote terms, stay, the rest get closed.
- Relative to the above (and, I know pre-judging) implement a hiring freeze on all Quangos.
- Reduce funding for Wales, NI and Scotland, equivalent to the amount that they subsidize university education and health care compared to that which applies in England - that is, set a level playing field!
- Cut Corporation tax by 10% and give a 5 year tax-free holiday to any new manufacturing company that establishes and manufactures in the UK.
The balance - do like Ed Balls always says Borrow. I think though that the stimulating effect would reduce the actual borrowing need.
Why not go the whole hog and abolish income tax altogether and raise revenues purely through consumption taxes like VAT? Would that help?
ReplyDeleteWhat do they say? "A government who governs less, governs best".
I fear that will never be acceptable as it then falls hardest on the lower paid - who have to 'consume' a larger part of their income.
ReplyDeleteMaybe a flat tax though? VAT at say 15% and Flat Rate tax, on all income above 15K at 35%. No National Insurance (included in taxes) No inheritance tax. Capital Gains at Flat Rate 35%
No government would ever do it though. Too many vested interests. Think of all the lawyers, tax accountants and civil servants that would lose their jobs if the tax code was simplified.
Who would be left to 'bash' if there were no need for tax 'dodging' or 'manipulation'?
What would the 'Occupy Movement' do? Get a job, maybe?