Tax Reform To Save The Economy
Osborne urged to introduce 30% income tax for all
A 400-page report from company directors and economists called for Britain’s “extraordinarily complex and punitive” tax system to be replaced with a “simple” 30% flat rate of income tax.
The report from the 2020 Tax Commission was backed by the Institute of Directors and the Taxpayers’ Alliance campaign group and followed an 18 month inquiry.
The “single income tax” would allow workers to keep thousands of pounds more of their earnings to spend in the high street and make the UK a global “hub” for trade, the 2020 Tax Commission said.
The commission, comprised of 30 political and economics specialists, also recommended cuts to fuel duty and the abolition of National Insurance and stamp duty.
The recommendations were released amid concern over Britain’s stalling economy and vulnerability to the growing crisis in the eurozone.
Allister Heath, chairman of the Commission, and editor of the City A.M. newspaper, said a "single, much more reasonable" income tax rate could transform the UK's economic prospects.
The commission's plan "could create the conditions to establish the UK as a global trading hub, generating renewed prosperity for all those who live and work here", he said. "Politicians who are serious about Britain's future need to take it up."
The report, by the 2020 Tax Commission, claims the changes would result in a £3,400 tax cut for a two-earner household with an income of around £28,000 and could lead to an 8.4% increase in the UK's gross domestic product after 15 years.
Under the plans national insurance contributions would be scrapped, with a single 30% rate of tax on income and a £10,000 personal allowance.
Corporation tax and capital gains tax would be replaced with a 30% tax on dividends, interest and rent.
Inheritance tax and stamp taxes on shares would be scrapped along with air passenger duty, while fuel duty would be cut by 5p under the proposals.
Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "Right now the Government's first priority has to be strong economic growth to create jobs and ease the pressure on families struggling to make ends meet. Tax reform is essential to make that possible."
“This seems like a good idea to get the economy spending again” says Greengates Builders Merchants Accrington, Lancashire.