This is what Labour has to say in the tax section of its manifesto:
They have also committed to:
- A mansion tax on properties over £2 million
- A 50p tax rate for those earning over £150,000
- Abolishing the Tory marriage tax relief
- A new starting rate of income tax
- Abolishing the bedroom tax
- Working with companies to ensure tax is paid where it is due in their supply chains
- Improving tax data sharing with developing countries
- Devolving tax rate setting to Scotland
- Recreate a Bankers' Bonus Tax
- Increase council tax on long term empty properties
- Keep the most competitive corporation tax rate in the G7 (which allows for an increase)
- Restrict pension tax relief for high earners
- Give tax rebates to companies paying the living wage
- Freeze small business rates
Does it make sense? That's an important question given Labour is most likely to form the next government, in my opinion.
The answer is broadly yes. The main package has much to commend it and is tough on disclosure, and avoidance. The review of HMRC is overdue. Penalty reviews are also needed and the scraping of the non-dom rule is vital.
The mansion tax would still be better dealt with by Council Tax reform, in my view.
Starting tax rates have poor records, but are better than marriage reliefs that are just partisan.
Restricting pension reliefs is just - but other reliefs need restricting too.
The commitments related to development are good. So too is the challenge to British tax havens, which I warmly welcome.
So what's missing? First a commitment to spend more at HMRC. I don't understand why that is not there.
Second, levelling rates on capital gains tax: I think that socially just.
Third, detail on tax avoidance is not in here, but has been dealt with elsewhere and will, I hope, be delivered.
Fourth, the need to create a progressive tax system is not stated - and it is not clear enough will be done on that issue.
But overall? Principle matters in this list and for that reason it is welcome as a step. But it is only a step and pressure for more reform will be needed.
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I think that this is about as radical as we are going to get within the neo-lib framework which is shocking within itself such will be the time period for dismantling the now 40 year neo-lib ‘concensus’. My anger with Labour is sometimes incandescent but I am adjusting to accepting that changes in the power of global capital will take a LONG time and a significant process of re-education of populaces.
I wonder why there is nothing significant on NI? Seems like a glaring omission to me.
Odd, indeed
I thought EM said in his speech, no change in NI but you may mean something more than just that commitment?
Richard – the one I’d like to have seen is scrapping the annual exempt amount for capital gians tax. It’s a rich persons’ tax; only the rich pay it as they are the only ones with assets of a size likely to incur CGT.
So why do the wealthy get a bonus personal allowance (that’s actually larger than the income tax allowance)? It’s currently £11,000 as against £10,600 for income.
Put another way: £11,000 is the equivalent of 1,692 hours at the National Minimum Wage of £6.50. Assuming 48 weeks’ work per year, that’s a 35-hour week’s work for a whole year.
If Labour are keen to make things faiere, I don’t think the rich should be getting the equivalent of a year’s work untaxed.
Any thoughts?
I would not quite scrap it – a small allowance of £2,000 or £3,000 saves a lot of admin
Beyond that I agree, this is absurd
Good thinking. That sounds reasonable.
On disclosing the real owners of companies: won’t this disclosure need to be extended to trusts (and any other legal structures)? Otherwise, anybody determined to hide their ownership will choose the most opaque legal form available.
We are calling for that
The marriage tax relief has its worth and should stay, it’s one of those taxes as all good taxes do benefit people indirectly as Its good for society as a whole.
There’s a technical answer to that
It’s bollocks
Good to see you are au fait with the latest arcane economic terminology, Richard! (smiley emoticon)
Having spent the last 72 hours panicking about potential loss of a great deal of date, your reply, which is course entirely appropriate, was the first thing this morning to raise a smile on my face.
I hope you got the data back……
That made me laugh. I agree with you and your stance on most tax ,but I value marriage and it’s effect on society especially regarding children
I value marriage to
But it does not need that tax relief
Can you please help me respond to this; I get a Lib Dem election flyer through my door and one statement is: “Labour must think we’re stupid. They got rid of the 10p tax rate which made the lowest earners worse off. It’s great that the Lib Dems have stood up for low and middle earners and given them an £800 tax cut.” Is any of this true? In any case, what’s in the past is history; how would Lib Dems and Labour compare on these issues if they were in government next time?
Ian
Try this
http://www.economist.com/news/britain/21646702-good-politics-bad-economics
Richard
Ok, but the tax credits system appears to reward a marriage breakdown, this proposed relief was at least a gesture towards the benefits of marriage. I suppose marriage needs a greater boost that a token tax relief.
There are some things where tax is just an inappropriate incentive
Marriage is one