Sir: Gordon Brown's decision to set income tax rates for the foreseeable future is brave, if long overdue (report, 21 January). It is 153 years since income tax was last reintroduced as a "temporary measure". The time for playing "let's pretend" about next year's taxes is past.
I trust therefore that if he is Chancellor next year, he will put provisions in the Finance Bill to make income tax permanent. Then he can ask Parliament to set the rates on a permanent basis. It is no answer to say that this restricts a Chancellor's freedoms. In most states, income tax rates are fixed for the foreseeable future. Why is Britain different?
In the British context, this removes the idea that taxes are a voluntary annual gift to the Sovereign. It would also help to simplify our tax laws. Further, it would reinforce the stability that Mr Brown's announcement has already given to the system.
Making income tax permanent would remove the technical requirement for an annual Finance Bill. At the least, it removes the need for the restrictive timetable on Finance Bills. More valuably, it would remove the pretence that there will be no income tax next year. That merely leads to some tax-avoidance techniques and the false theatre of the Budget Day guessing game.
Mr Brown's announcement is to be welcomed, not only for its deflection of the political debate from taxation to other matters but for the reforms that can follow.
Professor of Tax Law
Queen Mary and Westfield College
London E1Reuse content