As reported in The Guardian, these priorities include tackling tax avoidance by both corporations and wealthy individuals, clamping down on excessive and undeserved top pay, and re-engaging with governments and business in Europe following the Prime Minister’s unhelpful showing in Brussels at the end of last year.
Pressed on how that re-engagement would materialise, Nick …
To mark the start of 2012, we’re running a series of posts over consecutive days on the main challenges for the Liberal Democrats in 2012. I’ve already written about the four priorities for the party’s new Chief Executive, Tim Gordon, but as the Liberal Democrats are more than just the one man whilst he has four, this series sets out six for the party.
As with many other liberals, Nick Clegg is strongly motivated by the issue of fair taxation of wealth. In addition, pursuing the issue provides three neat political benefits. First, it offers a clear distinction
Despite some predictions to the contrary, countries are not being forced inexorably to tax less in an increasingly globalized and competitive world economy. Between 1975 and 2008, taxes rose as a proportion of national income in virtually every OECD country. On average, the tax take rose from 29.4% to 34.8% of national income. In no OECD country was there a significant fall in the tax take over this period…
Within the total tax take, we might expect that governments would find it more difficult to raise taxes from internationally mobile companies and people.
Nick Clegg’s recent ‘open society’ speech confirmed that increases taxes on wealth in some form is very much on the political agenda. However, the default party policy option – a mansion tax – was highly controversial in the party when it was introduced (which is rather a polite term for the rolling lesson in how to bungle a policy launch, annoy MPs, irritate party members and feed negative stories to the media all in one fell swoop).
In other words – now is a very good time for the party to be debating what form of wealth taxes it favours, especially after the opportunity was missed at the party’s autumn conference. As I wrote at the time in Tax: The missing ingredient from the Liberal Democrat conference agenda,
By Tim Farron MP
| Fri 23rd December 2011 - 12:57 pm
Well that was quite a year, wasn’t it? It was a good one too!
I know, I know, after the referendum and the horrible results in May you’d be forgiven for believing we were sinking faster than Blackburn Rovers (how it pains me to write that), but you know what, it’s not true.
This year we did some amazing things, things you and I have wanted to do for years but never had the power to actually get done.
For one, we put an end to the horrific practice of locking up innocent kids behind bars for months on end in immigration …
The news that the Public Accounts Committee of the House of Commons has condemned the way in which HM Revenue & Customs staff have handled their dealings with the United Kingdom’s largest corporate taxpayers is merely the latest of a series of PR disasters for a Government department that now raises nearly £500 billion for the public purse annually.
Accusations that Vodafone was allowed to avoid more than £1 billion in tax, and that Goldman Sachs was erroneously allowed to pay an enquiry settlement without interest amounting to £10 million, are alleged to be just the tip of the iceberg, with …
Liberal Democrat leader Nick Clegg has said the idea of tax breaks for married couples is wrong, and would not work.
The deputy prime minister told Sky News there were “philosophical differences” with the Lib Dems’ coalition partners, the Conservatives, over the issue.
He said there was a limit on what the state “should seek to do in organising people’s private relationships”…
Last week, the Director General of the Institute of Economic Affairs, Mark Littlewood, spent an hour talking to David Laws at the IEA’s Westminster headquarters. Before a packed room, Mark and David touched on a whole range of issues – taxation, Europe, the formation of the coalition, just exactly how liberal the Liberal Democrats are, and many more.
The hour-long exchange, which you can see below, is well worth a watch:
Fears that the 50p rate of tax would hinder recruitment of top executives have been allayed, according to a survey of 50 large companies that will relieve pressure on George Osborne to accelerate plans to abolish the controversial levy in next week’s autumn statement.
Only 13 per cent reported that the 50p rate for those earning more than £150,000 a year was proving a barrier to attracting senior managers to Britain, according to KPMG, the professional services group, in what it said was a “dramatic change of sentiment” since 2009 when over 80 per cent of companies
By Adam Corlett
| Tue 1st November 2011 - 10:55 am
At Conference, Danny Alexander repeated his view that the personal allowance for income tax should be raised beyond £10,000, saying:
In the next Parliament, I want us to go further; our aspiration should be that someone working full time on the minimum wage should pay no income tax at all. An income tax threshold of £12,500 – think what that would do to work incentives, think what it would mean for basic fairness. Let’s put that on the front page of our next manifesto.
The idea certainly seems popular within the party. But remarkably absent from these discussions is any mention of National Insurance. The very first point in our 2010 manifesto was “the first £10,000 you earn tax-free” but, while it later clarified it meant income tax (IT), it’s hard to see why the parallel income tax that is National Insurance (NI) should be treated any differently.
Lib Dem Voice has polled our members-only forum to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 550 party members responded, and we’re currently publishing the full results.
Our latest survey of party members finds a small majority backing the government’s controversial plans for the planning system in England. By a margin of 48% – 39% Liberal Democrat members in the survey supported the scheme to cut central control over planning but also introduce a presumption in favour of development if plans are sustainable and in line with local policies.
Lib Dem Voice has polled our members-only forum to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 550 party members responded, and we’re currently publishing the full results.
Cut income tax and VAT but raise taxes on property: that’s the message from Liberal Democrat party members in our latest survey. Some answers to our tax questions are unsurprising, such as the North Korean style (or, for older readers, the Albanian style) majority in favour of raising the personal allowance threshold for income tax to £12,500, approximately equivalent to what a …
Mr Clegg made clear that the Liberal Democrats would back abolition of the 50p rate in the long run only if it is not raising much revenue and if it is replaced by new taxes on “unearned income”. These could include a 1 per cent annual “mansion tax” on homes worth more than £2m, a land tax, and restricting tax relief on pensions to the basic 20p rate.
By Nick Clegg MP
| Wed 14th September 2011 - 1:23 pm
Deputy Prime Minister Nick Clegg delivered a speech on the economy at the LSE this morning. Here’s the full text:
Good morning. Today I’m going to talk about the economy. I’m certainly in the right place. For more than a century LSE scholars have been at the forefront of every major economic debate asking – and answering – the most pressing questions of the day.
Today, the big question facing governments is this: Given the unprecedented pressures in the global economy, what can we do to restore stability and encourage growth?
What I term “The Carbon Externality” is that cost being borne by current and future society as a result of greenhouse gas emissions, being produced over the past century or so at a rate that exceeds the capacity of the planet to absorb them without perceptible harm.
Externality is an accounting/economics term for any cost that is borne by an external party, and therefore not part of the internal cost analysis. It is the fundamental flaw in Friedman economics and why those calling for small government are missing the point.
Government exists to account for and address externalities. Effective regulation of the market reduces or eliminates externalities so that the costs of doing business are increasingly borne by those who benefit from the business, in the form of reduced profits and higher end-user costs. Taxes are the principle mechanism for this.
Back in June Mark Pack suggested that now is a good time to start debating tax ideas for the next manifesto. So, let me throw in two ideas: one brave, one not so brave.
My first idea is to increase inheritance tax by 5% to 45%, raking in an extra £350m, and then spend £300m of that to cut the reduced rate of VAT to 4%.
…
Nick Clegg shocked me when he said that the UK fiscal deficit is increasing by £400m every day.
Since then we have had a broadly fiscally neutral budget from George Osborne, intended to stimulate the economy. True, VAT rose to 20% but in other ways, this was a give-away budget. VAT is a regressive tax, which we all have to pay, when we buy what we need, whether we can afford it or not. There should be lower rates for household essentials such as fuel. There should be no VAT on the first £1,000 of fuel bills.
More economically competent than Labour, fairer than the Conservatives – that’s what many at the top of the party hope the message will be come the next general election. If the economy is not doing well at the time of the next election . However, if it is then the party will need the right combination of economic policies to support that proposition.
That is why people such as Danny Alexander are starting to sketch out possible tax policies for the next general election which will involve giving tax cuts to the least well off, paid for by taxing the richest more.
Today’s statistic is courtesy of the Office of National Statistics and their video podcasts (a rather unpublicised source of information given its clarity, relevance and yet low viewership figures).
This graph looks at pension savings for the age group 54 – 64 held by households and sorts households into deciles based on how much savings they have (not, as is often the case with similar graphs, by income or expenditure). As you can see the 10% of households with the most household saving actually have almost half of all household savings:
The Financial Times reports, “A loophole in the schemes used by wealthy earners to transfer pensions overseas was blocked on Wednesday in a move the Treasury said showed its determination to crack down …
At the start of Budget week, Danny Alexander writes at Comment is Free that the coalition government is about more than balancing the books, but about enacting reform with a foundation of economic recovery.
There’s been some promising chatter in the run up to next week’s Budget about two major changes to our tax system, both of which have often been talked about across the political spectrum and both of which politicians have previously ended up shying away from because of the political hurdles involved.
The move is expected to be signalled by George Osborne in his Budget next Wednesday. Although such a huge change would take years to implement, the Chancellor is determined to be seen as a reformer and not just
Max Teuerman took to this blog last month to criticise George Monbiot’s attack on the government over corporation tax plans. Now the BBC’s Robert Peston has blogged his own long-promised take on the story, saying:
The government seems to be trying to do precisely the opposite of what Mr Monbiot accuses it of doing: it is trying to stem the exodus of companies and their assets abroad.
As Peston explains,
George Monbiot warns that if dividends from overseas branches of multinationals become exempt from tax, that will create an incentive for multinationals to relocate more of their operations to these overseas
At the time the Conservatives announced their plans for an Office of Tax Simplification it looked to me like a good exception to the general policy of cutting quangoes. Its major report into tax reliefs looks to have justified that belief – because the Office of Tax Simplification has discovered that far more tax reliefs exist than it was expecting.
Yup, you read that right – that tax system is so complicated it turned out to be even more complicated than people who already thought it was complicated expected. Or in its language:
We found 1,042 reliefs,allowances and exemptions; far more than any of our initial estimates.
The OTS’s report also has the distinction of starting its foreword with a quote from Star Trek, even if by Chapter 1 it is back on to more familiar tax quotation grounds with William Gladstone.
The big stories from the review are:
During the review, a number of key themes have emerged:
Merging income tax and NIC – this is a long term project of structural reform thatwould deliver major simplification;
Employee benefits and expenses – The longer term aim would be to align the treatment of employee benefits, with shorter term aims of simplifying many minorbenefits with a de minimis limit of £100/£500, or amending the current £8,500threshold;
Inheritance tax and trusts – the reliefs for inheritance tax are integral to the policyand we consider that a more appropriate approach would be to review the tax as a whole;
Capital gains tax, particularly as applicable to companies –the capital gains systems for individuals and companies have drifted apart, with gains by individuals taxed at a lower rate than income to reflect inflation, whereas companies are still required to calculate indexation. Our aim would be to realign the treatments and simplify the tax, but as there are changes in relation to corporate capital gains expected in Finance Bill 2011, this is clearly a longer term project; and
Environmental taxes –Both landfill tax and aggregates levy should be reviewed, as both regimes contain basic charging provisions with numerous exemptions and it may be more appropriate to define what is caught rather than what is excluded.
In amongst the details are some great examples of just how much parts of the tax system is in need of simplification, such as the continuing tax break on the first 15pence (yes, pence) of the value of a luncheon voucher given by an employer to staff. As the review says,
The value of this relief has eroded since its introduction in 1946 and is outweighed by the time and cost in providing it.
My favourite, however, is the discovery that there is still a tax relief on the books for a tax rule that no longer exists:
Certain specified and certified instruments were exempt from £5 fixed stamp duty. As the fixed rate of duty was abolished in 2008, the policy rationale is no longer relevant and the relief has no current application.
Yorkshire drinkers of obscure beer may wish to check section 4.37.
By Max Teuerman
| Wed 16th February 2011 - 11:55 am
As a tax professional, it’s not often people ask me about what I do in my day job. Sure, people will occasionally ask me about their personal tax returns, but UK corporation tax on foreign companies and branches? Not even my insomniac friends are that masochistic.
So I was surprised to see my local party debating this very subject (or so it seemed) based on an article George Monbiot wrote in The Guardian. I was curious: I’ve worked in corporate tax for 17 years, for professional firms and companies, large and small, and contributed to consultations by HM Treasury and HMRC, including …
From the early 1990s the City had sought to justify light-touch regulation and tax concessions by listing the many socio-economic benefits of finance … The most persistent of the City’s claims was that tax revenues from finance were a key source of funding for New Labour’s social programmes. But … over the 5 years from 2002 to 2007, tax receipts from finance totalled £153 billion and averaged just 6.7 per cent of government receipts. In the same period, manufacturing employed many more workers, who all paid taxes under strict
This morning the government’s plan to phase in a permanent banking levy were altered to bring in the levy in full straight away. It will bring in an extra £800 million as a one-off and, in the words of the Today program is, “Maybe not of a kick, more of a shove perhaps”.
Although attempts to encourage an increase in bank lending are by no means over, the combination of those slow talks and the paying out of large bank bonuses, has not exactly been winning the banking sector friends in government, even amongst Conservative ministers let alone amongst Liberal Democrats.
David Cameron’s comments over the weekend that he wants to cut tax but now is not the time gives a very strong indication as to what the overall impact will be of any new measures in next month’s Budget – no net tax cuts. But no net tax cuts is not the same as no tax cuts.
Two different ideas were also floated over the weekend, from credible looking sources even if they were also both formally denied by the government. They were to move even further towards the planned £10,000 basic income tax allowance and also to tax non-doms …
Here’s your starter for ten in our weekend slot where we throw up an idea or thought for debate…
Here’s an issue which often comes up when tax avoidance and evasion is talked about on this site. Is tax avoidance acceptable, i.e. is it morally acceptable to follow any and every legal means to avoid paying tax? And why (or why not)?
The media coverage however has been to latch onto the second half of that headline and bury the first part a long way down the story. Take The Independent, with its headline Teachers and nurses dragged into top-rate bracket. It goes on to point out how some tube drivers also will end up …
Neil Hickman And the incessant Farageist claptrap about "wanting to protect our women" was notable by its absence when John Ashby raped a Sikh woman in her home while subjec...
Alex Macfie There have been several murders with white killers and BAME victims recently. There were no riots following them, from anyone. The far right ignored them becaus...
Tom Walker Thanks Jack, really interesting read.
I'd be really interested to explore how this issue interacts with widening inequality within our society. I see these ...
Alex Macfie @Chloe: The most similar case to Henry Nowak, but with BAME victim and white killer, is probably the 2013 Murder of Bijan Ebrahimi.
https://en.wikipedia.org/wi...
paul barker The thing that struck me about the member mailing was what it didn't talk about, Membership & our failure to attract people under 30.
Our Membership is a...
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