Monday, June 05, 2006
Tax Policy - where do we go?
I have read two interesting blogs on this subject over the last couple of days. First of all at QuaeQuam Blog and secondly at Jocks Blog. There was also a piece in yesterdays Observer and another one in today's Guardian. All of this has set me thinking about which bits I like and which bit I don't (bearing in mind of course we are yet to see the actual proposals). I am not keen on dropping the 50 percent tax rate simply because I believe that those who are substantially better off can afford to contribute more to the pot and that a society where the gap between the richest and the poorest is so large is not healthy. There may be an argument that we have pitched the starting point for this higher rate too low but I would not want to abolish it. The increased emphasis on green taxes is to be welcomed although initially I was concerned that those who were worse off would penalised for aspiring to a foreign holiday. Assuming that the comments in today's Guardian about the support of charter firms is accurate then I am reassured. I agree that some form of progressive property tax would be the way to go and like QuaeQuam blog I worry about the problem of looking like we are giving with one hand (through cuts in the rate of income tax) whilst taking with the other (through the introduction of local income tax). I am also not sure that cutting the basic rate from 22p to 20p is the way to go. It may be more marketable but would it not be better to help those who most need it by spending that money on raising the threshold at which you begin to pay tax?