Letter: Overtaxation of the poor

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The Independent Online
Sir: Simon Brandenburger (Letters, 1 August) reflects the view now held by many thoughtful people that our taxation rates are too low. The result, of course, is that the Government has to allow interest rates to be high, and the pound, in turn, has a value high enough to affect our export trade adversely. Higher tax rates would enable the NHS and education to be improved, and our exports and employment to increase.

Any review of our tax system should address the question of fairness. The present system is unfair, and was deliberately made so by the Conservatives. Income tax, potentially our fairest tax, is much less progressive than it used to be, and it represents only about a quarter of the Government's receipts. Inheritance tax has one rate only, whereas capital transfer tax, which it replaced, was graduated. Value added tax, 8 per cent in 1979, stands more than doubled at 17.5 per cent.

This system overtaxes poor people and undertaxes rich people, and it is one of the reasons why the gap between rich and poor is so wide today. On moral, social, and economic grounds, something should be done to increase revenue and make the system fairer.

JOHN WYMER

Bridport, Dorset

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