Buckinghamshire County Council will increase Council Tax by two per cent
Dec 2013 09

Buckinghamshire County Council’s cabinet has just recommended just under two per cent increase in Council Tax next year.

I reported a couple of months ago that the council was undertaking a consultation giving residents the option of a two per cent increase, a four per cent increase, or a five per cent increase, but not a freeze. Just under half of those who responded favoured four or five per cent as the council said any additional cash raised above two per cent would be ring fenced and spend on the county’s roads. Without a clear mandate, cabinet members did not feel they could proceed with a referendum, which they say would have cost £300,000.  Continue Reading

Proposed MP pay hike is unacceptable and must be rejected
Dec 2013 09

Reacting to reports that IPSA are to propose an 11 per cent pay increase for MPs, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:

“It is totally unacceptable to hike politicians pay just as families across the UK struggle with stagnant wages and rising prices.

Taxpayers will be furious that the pay rise comes at a time when MPs urge public pay restraint and the Chancellor tells us he can’t afford to ease the burden of taxes on hard-pressed households and businesses.

IPSA’s own polling and research shows that the current level of pay to be broadly fair and that the public simply do not back the increase. This
announcement amounts to an unaccountable quango putting up two fingers to taxpayers. The rise must be rejected.”

At the TaxPayers’ Alliance, we strongly oppose the big increase in MPs’ pay proposed by the “IPSA” quango. We have set up a petition which you can sign below to support action to scrap the proposed pay hike and ensure that there is proper accountability for future decisions over MPs’ pay. We will send the petition to MPs and IPSA, as part of our response to their consultation.

Autumn Statement brings total number of Coalition tax rises to 509
Dec 2013 06

This morning we have published our post-Autumn Statement briefing and launched a new Tax tracker website. The site charts the 509 tax rises and 209 tax cuts that have been implemented or planned since the Coalition took power.

Click here to read the analysis in full
Click here to visit the tax tracker website

The key finding of our preliminary analysis of the Autumn Statement are:

Tax rises

  • Since the Coalition Government came to power in 2010, 509 tax hikes and 209 tax cuts have been announced
  • Of these, 402 tax hikes have already been implemented and 107 are planned. 160 tax cuts have already been implemented and 49 are planned
  • As further Treasury documentation is released, we will update the www.tpataxtracker.co.uk with further details on the number of tax rises and tax cuts

Curbing fiscal drag

Public sector net borrowing in 2012-13 was £121 billion in March’s Budget but this has been revised down to £115 billion. Of that £6 billion revision, £4.3 billion is made up of increased receipts. Much of this will be down to fiscal drag, where taxpayers find themselves pushed over thresholds as those thresholds remain static and do not keep up with average earnings or house prices.

  • OBR forecasts show revenue from 12 taxes is set to increase by 20 per cent or more in nominal terms
  • Revenue is set to increase by 116 per cent from Capital Gains Tax, 112 per cent from Environmental Levies, 89 per cent from Stamp Duty Land Tax and 60 per cent from Inheritance Tax
  • Income Tax receipts are set to increase by a quarter, with fiscal drag meaning that millions more taxpayers will pay tax at the higher rate of 40 per cent. TPA research has shown that, if the higher rate threshold had kept pace with the increase in average earnings, it would be around £64,000 this year

Dynamic Modelling

HMRC has developed a dynamic model to assess the impact of cutting Corporation Tax. There are two limitations to the model, however, that suggest it could still understate the benefits of Corporation Tax cuts.

  • It does not capture the effect of lower Corporation Tax in encouraging investments that embody new innovations in the capital stock, or any resulting technological spillovers
  • The model itself does not capture the effect of lower Corporation Tax in encouraging foreign direct investment

There are three changes needed to ensure that dynamic analysis becomes a permanent feature of policy-making:

  • Dynamic analysis using the HMRC CGE model should be required for all fiscal policy changes announced by the Government
  • Each member of the Treasury Select Committee should be allowed to submit one fiscal policy for full assessment using the CGE model each year
  • The Treasury Select Committee should be empowered to commission regular (annual or biannual) reviews of the assumptions in the model and how it might be improved from independent economists

Click here to read the analysis in full
Click here to visit the tax tracker website

The key finding of our preliminary analysis of the Autumn Statement are:

Commenting on the analysis, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:

“The fact that there have now been in excess of 700 separate tax changes enacted or planned since this Government came to office is compelling evidence of the urgent need for reform of a complex and unstable tax system. As a priority, ministers should be looking to merge National Insurance with Income Tax and merge capital taxes into a single tax on distributed income.

“The new figures show a drastic increase in the number of people who will get clobbered by ever higher bills for a whole range of taxes, including Stamp Duty and Inheritance Tax. This is because the thresholds at which people’s tax liabilities change are not going up in line with inflation, average earnings or house prices. A simple way for the Government to reduce this burden would be to cut or abolish unfair double taxes while indexing Income Tax thresholds to earnings growth.

“Ministers must also extend dynamic modelling to all fiscal policy changes. The new model looking at Corporation Tax changes has demonstrated the positive impact of tax cuts and the sooner that the old static analysis can be replaced with this kind of dynamic analysis, the more persuasive the arguments for wider tax cuts will become.”

Some welcome tax cuts but George Osborne could do better
Dec 2013 05

Reacting to the Autumn Statement, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance said:

“There are welcome tax cuts in the Autumn Statement which will ease the burden on families whose finances are under enormous pressure. But in several crucial areas the Government has not done nearly enough and the Chancellor announced complicated, limited relief instead of serious reforms. The Treasury is finally conducting proper dynamic analysis of corporation tax cuts and it should replicate this work across the board. There is now a golden opportunity to show how cutting a range of taxes that hold back the economy and leave people worse off would strengthen the recovery with very little impact on revenues.”

Commenting on key areas mentioned in the Autumn Statement:

Higher Rate threshold

“It is extremely unpleasant that the higher rate threshold is now a cliff edge for so many policies, particularly when it has been falling. Millions of people have been dragged onto the ‘the rich’ side of all the Chancellor’s policy announcements.”

Business Rates

“Reliefs and a cap on business rates are welcome but many of the measures add further and unnecessary complication to the tax system. An overall freeze in the rates would have given struggling businesses a better deal.”

Fuel Duty

“The cost of filling up at the pumps is a huge burden on families and businesses alike, so scrapping next year’s Fuel Duty increase will be welcomed by hard-pressed motorists. Using a car is a necessity, not a luxury, for a majority of households so freezing Fuel Duty will help those struggling with the cost of living.”

National Insurance

“Scrapping Employers’ National Insurance for under-21s adds further complexity to the system but this is a step in the right direction, as it cuts taxes on the young and will increase their wages in employment. In the longer term, the Chancellor should abolish National Insurance, which is just another Income Tax.”

The state of the public finances

“The improved growth and borrowing figures are undoubtedly a step in the right direction but the Government is still not living within its means. The national debt will continue to rise for another five years and an obscene amount of taxpayers’ money continues to be wasted.”

The TaxPayers’ Alliance (TPA) and the Institute of Economic Affairs (IEA) will hold an on camera Post-Autumn Statement briefing and panel discussion tomorrow morning. Click here for more details.

George Osborne should cut taxes and ease the pressure on family finances at the Autumn Statement
Dec 2013 05

Ahead of the  forthcoming Autumn Statement we’ve outlined the five key areas where George Osborne should take action and ease the pressure on family finances.

At the Autumn Statement the Chancellor should:

1. Cut Wasteful Spending
The Bumper Book of Government Waste 2013 revealed how the Government could cut vast swathes of wasteful and unnecessary spending. Tax cuts in the Autumn Statement must be accompanied by corresponding and necessary cuts in public spending. In June the Bumper Book identified potential savings to the tune of nearly £120 billion which equates to a massive £4,500 for each and everyhousehold in the UK.

2. Cut Green Taxes
Green taxes that subsidise uneconomic forms of renewable energy have increased household bills while Britain’s broken energy policy has guaranteed big profits for energy firms.  We’ve campaigned to Stop the Energy Swindle to ensure household bills are reduced at a time when many struggle with the cost of living. Our research revealed that the total level of subsidies will jump from £2 billion a year in 2012-13 to over £5 billion a year by 2018-19.

Meanwhile policies like the Carbon Floor Price are damaging British industry and increase total global emissions. Our research paper Industrial Masochism sets out the major flaws with the Carbon Floor Price.

3. Cut Stamp Duty
Stamp Duty is an unfair double tax that distorts the property market and prevents people from moving home. As part of out high profile campaign to Stamp out Stamp Duty we’ve produced research that exposed the punitive amounts paid in Stamp Duty last year and at what rate. Recent
research revealed the looming drastic increase in the number of people who will pay higher rates of Stamp Duty due to rising house prices.

We proposed a number of ways that the Chancellor can cut Stamp duty without significantly impacting Treasury revenues. This includes reform that would see the tax change from a slab rate to a marginal rate tax similar to Income Tax.

4. Freeze business rates
We’ve long campaigned for a freeze in business rates to ease the pressure on struggling businesses and the high-street business rates went up 4.6 per cent in 2011, 5.6 per cent in 2012 and 2.6 per cent this year. It is a tax that must be paid in the good times and the bad. A further increase of 3.2 per cent that is due next April cannot be allowed to go ahead.

Earlier this year, we revealed that £1.1 billion was paid in empty property rates in 2011-12, an increase of 19 per cent from two years before. In opposition coalition ministers opposed the removal of reliefs and in this Autumn Statement the Chancellor must reform rates that are harming economic growth.

5. Merge Income Tax and National Insurance
Strategic reforms to create a much simpler, fairer and more competitive tax system are needed. An early step that would ease the administrative burden on employers and make the tax system far more transparent and honest would be to abolish National Insurance and merge it with Income Tax. Our recent paper How to abolish National Insurance shows how that can be done.

Commenting ahead of the Autumn Statement, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance said :

“High taxes make it tougher for families to make ends meet while putting simple, modest aspirations like owning your own home beyond the reach of far too many people. The Chancellor must change that at the Autumn Statement. Too many of the UK’s poorly designed taxes create serious problems for families and businesses yet do little for the public finances. They can and should be cut right away. But over time the Government needs to live within taxpayers’ means, stop wasting so much money and leave more in people’s pockets.”

Page 30 of 884« First...1020...2829303132...405060...Last »