Biscuitman

I don't want to give too much away and spoil the speech of the proposer and seconder at conference.

However, you just would not believe how complicated this gets the more you looked at it.

Within 30 minutes of being asked to research this i had a fair idea, (not knee jerk reaction), of the basics - but the more research I've done the harder it's got - we have a chance here of making some REAL radical proposals - the conference motion will be just the start of the project.

To answer some points raised -

Puts too much power in the hands of Central government - we need a way of bringing more spending decisions down to a local level - as in Switzerland with the public more involved in those decisions.


Can't work unfortunately.
Imagine a company with its head office in London, such as M & S in Baker Street. When I used to deal with them they had over 4,000 employees - all commuters travelling in daily from dozens if not over a hundred locations.

Can you imagine the cost to the payroll department if they had to gather 'local income tax' for all these councils - at possibly different rates? Plus, think of a National Company with a centralised payroll office of say Tesco with 800 (?) stores nationwide having to calculate 800 different tax rates? An administrative nightmare that would be very expensive to set up and run.

30% instead of 20% would generate an extra £12 Billion. I don't know what council tax raises off the top of my head Tom, if you can convince me that £12 billion would do the job then you can have 30% but you'll never sell it to the electorate unless it will cover Council Tax.


These wont be in the debate but I'm in favour of shipping the responsibility of running and funding certain services performed by the council back to Central Government - such as Social Services; road maintenance - lets have that out of the Road Fund Licence for a start; the Library service - X amount of expenditure per head and Y amount of libraries per 1,000,000 of population to prevent skimping by Central Gov; Trading Standards - why on earth are they funded by councils?

Back to studying - remember every action has a consequence - and something as big as reforming taxes is like building a house of cards - you have to consider how each degree of change will effect another part of the whole. PLUS this will be fully costed before its presented - no more numbers worked out on the back of fag packets.
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IF THE EU WAS THE ANSWER, IT MUST HAVE BEEN A STUPID QUESTION!

Tom Collier

David,

I do not support abolishing Council tax. Very sorry for any confusion. I am sorry not to have proper figures, but I meant that I support a higher threshold, higher basic rate and keeping the top rate. I think in my heart (sorry) that we need more emphasis on direct than indirect tax and I feel (also in my heart) that people are ready for this, after all Gordon Brown`s stealth junk. I just grabbed an arbitary figure. What I meant was we should have 25% basic rate and 40% top rate OR a higher flat rate, say 30%. I like round figures and no compromise!

I agree with you 100% that local income tax would basically result in local nland Revenue offices at great cost. Council Tax is fine at a reasonable rate.

If I can help at all before conference please set me to work!

Regards and look forward to conference.

Biscuitman

Just finished my research Tom, not as exciting as Direct Democracy mind you.

The motion at conference will 'set in motion' further discussions and a flat rate tax will be the first step to moving towards a tax on consumption rather than on wealth creation.

i.e. the prudent shall be rewarded.

What I would like to see developed, and this is outside the scope of the motion so I don't mind kicking it around for a while, is that the Business Rate rather than being assessed on a square footage or property value - should be based on turnover of that business in that location.

It would be raised locally and spent locally with the local people having a HUGE input as to what it gets spent on by way of discussion and referendums - as in my DD paper.

That way the business rate can be used as a 'local' sales tax.

Please, don't anybody take this as gospel as there are plenty of pitfalls to be ironed out in my reasoning but I'm open to discussion on this idea.

You seemed over apolgetic in your answer Tom, hope I didnt come across as being snappy in my replies - it was just late and I wanted to post up some answers and then grab some desperately needed zzzzs.


I am always open to suggestions, especially if they come in a bottle marked Cabernet sauvignon, lol

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IF THE EU WAS THE ANSWER, IT MUST HAVE BEEN A STUPID QUESTION!

Tom Collier

I am open to similar suggestions.

You didn`t come across as snappy in any way at all. I was just keen to clarify myself I suppose.

I might be jumping to conclusions but be aware the BNP have gone all out for higher VAT and no income tax in the name on comsumption over wealth creation. This is not an argument against it in itself but I feel that as the UK is not the nation of shopkeepers it once was, such moves would play INTO phpbb_the hands of larger companies, who would simply reduce income accordingly. I reckon Nick Griffin is being influenced by his French mates who are derived from the Pugardist movement to liberate the great French buolangeie owner. Britain is a different economy, not having had the same sort of subsidies. In towns where they are strong, we could show them up as muppets on this.

My mind is not closed to new thinking. I don`t with to put a dampner on it. but until I see otherwise, a two rate, higher rate n` threshold income tax i the best way for UKIP and Britain. It is both a principle and pragmatic point. The Liberals brought it in in 1900s because of the havoc of free trade at that time.

Allowing myself a bit of principle over pragmatism, I dislike inheritance tax. The rich should pay in life but I think taxing people on death is out of order. But I think I am in the minority there.

Regards,
Tom

mkpdavies

I hate inheritance tax. Taxed all your life, then taxed again at death.

It's just plain wrong.

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Biscuitman

This would penalise the low paid.

At the moment the lowest paid 20% spend something like 38.5% of their income on taxes.

Only 9.5% of this is in direct tax, (income tax), the rest is in indirect taxes.

There is much more scope for helping them by cutting the 29% indirect taxes.

The problem with VAT is that the base is too narrow so the rate has to be set high.

Whilst we're in the EU we can't cut it below 15% but there are economies that cope with a 1% rate on everything.

There is a paper that suggests putting VAT on everything except food, domestic fuel and (can't remember the third item) - [it includes taxing childrens clothing - which is always emotive but how much does an average family spend on kids clobber?] - then you can drop the VAT rate significantly.

I'm not proposing this by the way, but it shows there is scope.

Thats why I suggested the Business Rate be levied on turnover - harder to disguise. Even then it would need monitoring - stop national companies 'passing' business on to their branch in the lowest taxed area.

One of the problems is that you can't apply a uniform tax across the country because of the differences in local population make-up.

Somebody suggested to me in an e-mail a local tax on peoples earnings; this is impractical, especially in areas like Devon where, I think the figure's right, 40% of the population are retired.

One of the reasons I favour local 'sales' taxes is that then you would gather income from tourists.

My old man left me no debts and a sense of humour, I'm greatful for both.

In my proposals I'm being pretty generous with IHT. The theme of taxation is to tax expenditure and reward prudence.

Brown castigates us for not saving enough for retirement and then punishes us when we do save - if we don't spend it quick enough when we retire then he's going to take a chunk of the rest as well. B...........!

Anyone know what rate IHT is levied at?

40% I hear you say...

Consider this... man who has been a higher rate tax payer all his life dies leaving an estate worth £60k over and above the nil rate band.

That £60k was accumulated out of net income ... therefore he had to earn £100k, less £40k tax to end up with £60k ... then comes IHT and his estate gets hit for £24k IHT.

Which means that his benificiaries end up with £36k out of £100k. The figues could even be worse... if the deceased had accumulated that £60k in an investment vehicle that had been subjected to Capital Gains Tax at his marginal rate, (40%).

The original purpose of IHT was to 'free up capital' from trusts.

Original 'Trusts' came INTO phpbb_being at the time of the Crusaders. When the Knights went off to fight, not knowing how long they would be away or whther they would come back or not they put their property INTO phpbb_trusts to be looked after by some worthy, (the trustee), for the benefit of their wife and children.

The trusts were in perpetuity thus the landed gentry were able to accumulate huge wealth through the generations as under 'pro-genita' (that is the eldest son inherited everything), capital was not dispersed as it was on the continent, under the Napoleonic code, where all children unherited a share and their children and their children until you ended up 10 generations later with not of the inheriters receiving anything of significance, (this is why french farming was in such a state - nobody had a big enough piece of land to sustain themselves on).

The problem with these trusts accumulating capital was that capital didnt get taxed - just income so the treasury needed to ensure that 'in perpetuity' bit got knocked on the head to get the cash circulating, (lesson for Gordy brown there - keep the cash circulating taking a small bite each time it changes hands rather than taking at BIG bite at source).

The first limit on 'perp' was that all trusts must end when the last decendent of George III, ( I think thats the right George) died.

This was later changed to a trust being limited to 80 years.

So the original concept was fine, trustees had no incentive to keep the capital within the trust - they could distribute it along the way - although they still have to take account of the 'remaindermen' i.e future benificairies who might be born during the life of the trust, and take this INTO phpbb_account when paying out income to the 'journeymen' - current beneficiaries.

[I'm just showing off now, 8) ]

Capital transfer tax was quite punitive and was revamped in, I think 1985, and changed to Inheritance Tax.

Unforetunately, because the nil rate band, (the allowance on which you pay no inheritance tax), has never been 'properly indexed - any increases have been linked to RPI which has been outstripped by property inflation.

This has resulted, certainly in the South East, in most families falling INTO phpbb_the IHT brakcet by virtue of the value of their homes.

As I said, in the motion I have made radical proposals to change IHT. I'm not worried about losing revenue from IHT.

Firstly, there are many 'avoidance' schemes - costs you £145 an hour if you want me to tell you about them - but they are complicated and in the main, those that pay IHT are those that couldnt undestand the schemes and so didnt do anything to mitigate their liability.

Those that are able to grasp the concepts manage to escape nearly all their liability.

By 'lightening' the tax fewer people would be bothered to take avoidance measures. This increases the overall tax take - smaller bites Gordon.

In the longer term IHT is going to 'fizzle out' for most of us. Mine is probably the last generation of 'ordinary' people that have half a chance of passing their estate on.

Firstly, we are all going to be paying for our long term care - £300 - £500 a WEEK at least, secondly we aren't going to arrive at retirement with enough income to live on so like it or not we are all going to be releasing equity from our homes - through 'lifetime mortgages' or by downsizing, (I see retirement villages - as in Miami - (walled enclaves with security guards etc - where denim clad 'grey panthers' spend their time playing tennis and bowls etc) and we wont be leaving much behind.

Anyway, thats enough for now - time to get back to some real work.

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IF THE EU WAS THE ANSWER, IT MUST HAVE BEEN A STUPID QUESTION!

gimlet

We still have to sort out council tax. I say £350 per household - flat rate. Fair for people who mainly provide for themselves.

Biscuitman

I used to go out with a girl who lived at home with two brothers - four wages going INTO phpbb_the house and they paid the same rates as the two pensioners who lived next door.


Council Tax is a hard one to solve.

If you go for £X per occupant then that is what the poll tax was and the other party will beat us with that stick.

In actual fact the poll tax was a good concept - £X amount per consumer. It was just that the local councils - mostly non tory took the opportunity to whack the rates up and Maggoe carried the can.

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IF THE EU WAS THE ANSWER, IT MUST HAVE BEEN A STUPID QUESTION!

Tom Commis

I agree with gimlet on council tax. The fact that one household might have more consumers than another is not important since services are provided to households rather than to individuals (mainly, I'm thinging of waste collection etc. here). You could just as easily complain that poor people pay the same as richer people in the same band property.

B.A.Ware

I don’t think there was much wrong with council tax.
Where it went wrong was charging students and the unemployed
Had it not done that it would be in place today? People should pay for facilities if they earn..