Tax shake-up urged to empower consumers and kickstart growth
Monday 21 May 2012
Britain should scrap eight different taxes, set a single rate of income tax at 30 per cent and move the personal allowance up to £10,000, according to the TaxPayers' Alliance and Institute of Directors.
Following 18 months of gathering evidence, their joint 2020 Tax Commission has published its final report aimed at kickstarting the economy by leaving more money in the hands of consumers.
The Commission advises that taxes should be cut to 33 per cent of national income and marginal tax rates should not exceed 30 per cent.
It also suggests that the personal allowance should rise to £10,000, and taxes on capital and labour income disguised as business taxes should be abolished and replaced with a tax on distributed income. Transaction, wealth and inheritance taxes should be abolished, the report urges, while other consumption taxes need to stay for now, but transport taxes should be cut. Finally it recommends that local authorities should raise half of their spending power from local taxes.
Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "The Government's priority has to be strong economic growth to create jobs and ease the pressure on families struggling to make ends meet. Tax reform is essential to make that possible. At the same time, the tax system has to be fair, and seen to be fair. Our complicated tax code where income is too often either taxed repeatedly or not at all doesn't pass that test."
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