Super-rich face 50% tax
Donald Macintyre writes political sketches for The Independent, having been Jerusalem correspondent since 2004, covering Israel and the Occupied Territories, as well as travelling for the paper to Iraq, Turkey, Jordan, Libya and Egypt. As Political Editor and then Chief Political Commentator, he previously covered the John Major and early Tony Blair era. He has written for the Daily Express, Sunday Times, Times and Sunday Telegraph, and Sunday Correspondent. He is the author of Mandelson and the Making of New Labour (2000).
Sunday 29 August 1993
The possible new 'top people's' tax rate - as well as the imposition of 8 per cent VAT on private health care - is one of a range of ideas designed to symbolise the Government's willingness to ensure that the better-off bear their share of any increase in the tax burden.
One of the strongest complaints against rises in indirect tax - such as VAT and excise duty - are that they hit the poor hardest because they take a bigger proportional share of their disposable income.
An increase in top tax rates would affect far fewer people than the new 45 per cent band for all higher taxpayers suggested earlier this month by Keith Hampson, Tory MP for Leeds North-West, which would raise pounds 1.8bn.
However, although limited in revenue-raising terms, it would please 'one-nation' Tories and backbenchers who say they face complaints about the salaries paid to leading businessman, including the chairmen of privatised utilities.
Proposals for the imposition of VAT on private health charges have also circulated within the Treasury, although one senior member of the Government argued yesterday that it 'would mean a lot of aggravation for not much money': it would alienate many Tory supporters, not all of whom were rich. The private health insurance industry would also strongly oppose any such proposal on the grounds that health is exempted under EC regulations - although Italy imposes VAT on health care.
But the circulation of such plans is strong confirmation that Mr Clarke is considering further widening of the VAT base - charging it on newspapers and books being one possibility, which would raise about pounds 1bn. VAT on books would provoke immediate outrage as a 'tax on learning', but it could be offset by a simultaneous decision to outlaw the Net Book Agreement, which sets minimum prices.
The lively discussion in Whitehall about possible plans for new indirect taxes comes in the wake of the continued refusal of Michael Portillo, the Chief Secretary to the Treasury, to bow to pressure from fellow right-wingers on the Tory backbenches by ruling out tax increases in the Budget.
But one question that could yet face Mr Clarke will be whether to lift or abolish the ceiling on National Insurance contributions. Although this was discussed before Norman Lamont's March Budget, it was vetoed on the grounds that the Tories had condemned a similar Labour proposal in the general election as a 'tax on jobs'.
The conflict within Labour over economic policy resurfaced yesterday when Peter Mandelson, MP for Hartlepool, strongly attacked Peter Hain, secretary of the Tribune Group of MPs, for criticising the party leadership and advocating a return 'to the policies that failed in the early 1980s'.
World's most lethal spider found under a bunch of bananas
Rumours that the star wants to move on to pastures new
Comedian says he 'never laughed as hard as I have writing with Rik'
- 1 Jack the Ripper: Scientists who claims to have identified notorious killer has 'made serious DNA error'
- 2 Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
- 3 Star Wars memorabilia called a 'bit of plastic' by Antiques Roadshow's Fiona Bruce valued at £50,000
- 4 Meet Thea, Norway's 12-year-old child bride
- 5 Russell Brand might seem like a sexy revolutionary worth getting behind, but he will only fail his fans
Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
Oscar Pistorius sentencing: Olympic star must serve 10 years, prosecutor urges
Isis fighters 'crucify' 17-year-old boy in Syria
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Oscar Pistorius sentence: Athlete's wealth and notoriety provoke an overdue debate on South African prisons
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
£55000 - £58000 per annum + benefits: Ashdown Group: A highly successful and w...
£110 - £130 per day + Competitive rates of pay TBA: Randstad Education Reading...
£110 - £130 per day + Competitive rates of pay: Randstad Education Reading: Pr...
£110 - £130 per day + Competitive rates of pay: Randstad Education Reading: Ye...