Added another alternative to income tax

Proposer
PaulJRobinson
State

Rejected

Vote Score

-2000

Age

2318 days


@PaulJRobinson edited manifesto/economy.md - over 6 years ago

The rate of capital gains tax for individuals will be harmonized with the rate of tax on earned income, and all allowances for each will be pooled, in order to ensure that work is rewarded and incentivised to the same extent as investment.

Investigate viability of moving from an income-assessed direct taxation to wealth assessed direct taxation. Those who earn significant salaries but do not accumulate wealth or assets beyond a single property (ie ensuring a genuine 'trickle-down' to the service industries) should be taxed less. This means hard-work is still encouraged, high-earners are not forced abroad, but those who sit on vast sums of accumulated wealth would be penalised instead.

Investigate viability of moving from an income-assessed direct taxation to either: a) wealth assessed direct taxation. Those who earn significant salaries but do not accumulate wealth or assets beyond a single property (ie ensuring a genuine 'trickle-down' to the service industries) should be taxed less. This means hard-work is still encouraged, high-earners are not forced abroad, but those who sit on vast sums of accumulated wealth would be penalised instead. b) Consumption based taxation http://www.johnkay.com/2014/03/21/a-stealthy-step-towards-abolishing-income-tax

VAT

Investigate possible reforms to the way VAT is applied to goods and services with a view to making it less regressive and, ultimately, to remove the poorest from having to pay entirely - even if this requires renegotiating our obligations to the EU.

philipjohn

@philipjohn - over 6 years ago

Instant 👎 from me I'm afraid.

Problems I see are; 1. Echoing my justification for a living wage policy, it is nonsensical for a Government to say on one hand that a person needs at least X in order to live decently, but then take then under that level through taxation. Consumption tax would do just that. 2. "Instead, taxpayers could hand over directly to the government a slice of their total spending" which would presumably require everyone to submit a self-assessment each year. Unfortunately, that means a huge swathe of people who are naturally crap at managing finances will end up in deep doodaa. 3. Those with the means to do so (the very richest) would very quickly find a way to avoid a consumption taxing regime. They'd find another way to buy their mansions, yachts and property empires, denying the treasury millions. 4. From the article "People should be taxed on what they spend, for that is in effect what they take out of society" makes absolutely no sense to me at all. Buying products and services is the very core of a capitalist system, no? Therefore, penalising people (through taxation) for buying things, undermines that whole system. 5. "least objectionable way of taxing inheritance" Income is the means by which we feed, cloth and shelter ourselves, it is not "inheritance" - we earn it and require it to live. 6. "Earnings would be paid tax-free into a savings pot, where the money could be kept indefinitely. Tax would be imposed only when cash was taken out." Completely discouraging spending, which will wreak havoc with businesses, especially retail. 7. "Most people would be likely to save when their income was high and withdraw cash when their income was low." and so a tax on withdrawals would hit people at the worst possible time.

Please tell me this John Kay guy isn't advising anyone in any political party....

PaulJRobinson

@PaulJRobinson - over 6 years ago

Don't know. Haven't heard of him before. TBH I was really just putting it forward because it was quite a novel idea I'd never even considered before, rather than it having real merit. It's good to thrash about the crazy stuff now and again.

philipjohn

@philipjohn - over 6 years ago

I did wonder ;)

Floppy

@Floppy - over 6 years ago

👎 from me too. @philipjohn has put it better, but as the poor spend proportionally more of their income on stuff than the rich do, this is inherently regressive.

However, proposing these kinds of ideas as a challenge to our thinking is a good one. Keep it up :)

frankieroberto

@frankieroberto - over 6 years ago

This is a good conversation to have, but I'm wary of having too many 'investigate feasibility of...' policies – instead perhaps the investigation should happen through these discussions?

I can see the benefit to taxing accumulated wealth, but if this was the only tax, wouldn't that just encourage rich people to find clever ways of spending money on luxuries so as to avoid tax?

Floppy

@Floppy - over 5 years ago

Long dead, and would need rewriting anyway if it was to be considered.