IFS is right to slam our tax code. Simpler, fairer, lower taxes now, please!
Institute for Fiscal Studies Director Paul Johnson has delivered a devastating critique of the complexity and inefficiency of tax policy across the political spectrum, castigating both the current and previous governments and all three major parliamentary parties.
Among the items singled out for criticism were:
60% Income Tax at £100,000, a stealth tax rate as a result of the personal allowance being withdrawn.
1.8 million higher rate fiscal drag. The number of taxpayers paying higher and additional rates of Income Tax climbed from 2.1 million in 1996-97 to 3.2 million in 2009-10 and then soared to 5 million this year under the coalition.
Cutting Income Tax while hiking National Insurance, another stealth tax, and the failure to keep the tax free amount for NI the same as that for Income Tax
Raising Stamp Duty "time and time again", which he described as "one of the worst designed and most damaging of all taxes"
A 10p starting rate of Income Tax which Labour talks about reintroducing. Johnson says it was a "mistake. A new 10p band of income tax achieves nothing that could not be better and more simply achieved by an increase in the personal allowance. Yet despite the lessons one would hope they had learned, the Labour Party now promises the reintroduction of this starting rate."
All of these problems would be avoided if politicians got to work implementing the Single Income Tax proposals of our 2020 Tax Commission. We proposed abolishing Stamp Duty and National Insurance entirely, and replacing Income Tax bands and thresholds with a single rate of 30 per cent on all income, whatever its source. I discussed the proposals in more detail in an article for Taxation magazine, while the Single Income Tax and the IFS's Mirrlees Review were discussed by Mr Johnson's colleague Stuart Adam at our Tax Reform Breakfast Briefing, along with Graeme Leach and Matthew Sinclair.
Paul Johnson is right to highlight the many, many substantial problems with our tax code. We need our politicians to implement a much simpler, clearer and lighter tax system and our Single Income Tax shows them how to do it. It's time they got to work.
2:56 PM 29, Sep 2016 Tom Banks
4:10 PM 28, Sep 2016 The TaxPayers' Alliance
2:08 PM 22, Sep 2016 Sunny Chen
5:12 PM 15, Sep 2016 Dia Chakravarty
3:49 PM 15, Sep 2016 Sunny Chen
11:39 AM 15, Sep 2016 Tom Banks