Ross Clark is right. Abolish National Insurance, Mr Osborne

August 02, 2012 12:39 PM

The Government should have kept on with abolishing National Insurance, Ross Clark has said in The Spectator magazine:
What about working towards the eventual abolition of National Insurance contributions — which as everyone knows are a blatant tax on jobs? Merging income tax with NI contributions is a policy which George Osborne did once float but rapidly abandoned. He should have kept on with it: it is pro-business, means lower taxes for millions on low salaries and would mark a big distinction between Labour and the Conservatives, with most Lib Dems likely to come down on the Tories’ side.


He's entirely right. National Insurance is a farce. A meaningless duplicate Income Tax with no worthwhile purpose beyond raising revenue for the Treasury but which needless complicates the tax system and makes it harder for people to understand how much they really earn at work and how much tax they pay on that money. Abolishing it would yield huge transparency and simplicity benefits which could even be achieved on a revenue-neutral basis with everyone paying the same as they do now, as we demonstrated in our report Abolish National Insurance.

Better still, the Chancellor could look into combining it with another policy he once flirted with but ditched when the hard work of ironing out the details to implement it successfully became apparent: proportionate taxes. Luckily, we've done the work there, too and have published The Single Income Tax, a comprehensive programme for significant and wide-ranging tax reform that would ease the burden on all taxpayers, substantially simplify taxes in Britain and go a long way to restore incentives and growth to the economy.

George Osborne should stop dithering on National Insurance and get to work on getting rid of it.

 The Government should have kept on with abolishing National Insurance, Ross Clark has said in The Spectator magazine:
What about working towards the eventual abolition of National Insurance contributions — which as everyone knows are a blatant tax on jobs? Merging income tax with NI contributions is a policy which George Osborne did once float but rapidly abandoned. He should have kept on with it: it is pro-business, means lower taxes for millions on low salaries and would mark a big distinction between Labour and the Conservatives, with most Lib Dems likely to come down on the Tories’ side.


He's entirely right. National Insurance is a farce. A meaningless duplicate Income Tax with no worthwhile purpose beyond raising revenue for the Treasury but which needless complicates the tax system and makes it harder for people to understand how much they really earn at work and how much tax they pay on that money. Abolishing it would yield huge transparency and simplicity benefits which could even be achieved on a revenue-neutral basis with everyone paying the same as they do now, as we demonstrated in our report Abolish National Insurance.

Better still, the Chancellor could look into combining it with another policy he once flirted with but ditched when the hard work of ironing out the details to implement it successfully became apparent: proportionate taxes. Luckily, we've done the work there, too and have published The Single Income Tax, a comprehensive programme for significant and wide-ranging tax reform that would ease the burden on all taxpayers, substantially simplify taxes in Britain and go a long way to restore incentives and growth to the economy.

George Osborne should stop dithering on National Insurance and get to work on getting rid of it.

 

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