Does the UK Tax System Need Improving?
With think-tank’s such as The TaxPayers Alliance urging George Osborne to prolong the coalitions spending cuts by an extra 5 years (to allow for tax reductions) as well as set a single rate of income tax at 30% (to stop taxpayers from getting repeatedly taxed), it does make you wonder if the current tax system needs updating.
According to their report they feel a single income tax could help to improve the economy, offer more job opportunities and stop families from being overtaxed.
And it is much easier to achieve than you think, once the following steps have been implemented:
- Cut taxes to 33% of national income (currently national income is taxed at 37.5%)
- Raise personal tax allowances to £10,000
- Make sure marginal tax rates do not go over 30%
- Remove taxes which are often disguised as business taxes i.e. taxes on capital and labour income, and replace them with a tax based on distributed income.
- Abolish transaction, wealth and inheritance tax.
- Consumption taxes should remain for the time being, but transport taxes need to be reduced.
- Local authorities should be allowed to raise 50% of their spending power from local taxes.
By implementing all of these, the TaxPayers Alliance feels this will help to remove pressure from families currently struggling to get by, and instead offer consumers are much simpler tax system to abide by.
Will it happen?
Whether it will happen, we don’t know. but what is clear from this report and similarly from the requests being asked of George Osborne is that something needs to be done to improve the economy in the UK.
With just a few improvements, the UK can get back on its feet again, prosper and become a hub of opportunity.