Tuesday, 28 August 2007

Is there anyone out there who wants to cut taxes?

Since Gordon Brown became chancellor in 1997, taxes have gone up and up. Meanwhile, David Cameron has abandoned the Conservatives' traditional tax-cutting agenda, saying, "stability is more important," while the Lib-Dems have flirted both with upping the top rate and putting an extra penny on the basic rate. All this while our unfair and costly tax system gets even more complicated each year. It has been left to the UK Independence Party to champion the hard-hit British taxpayer. UKIP policy is one of gradual tax-cuts with the aim of eventually moving over to a single rate for income and corporation tax, also known as a flat tax. It's simpler, fairer, results in virtually everyone becoming better off, and has brought prosperity to the countries that have adopted it, such as Hong Kong, Slovakia and the Baltic states.

Along with having just one rate, the personal allowance would be raised, and many unfair taxes like Inheritance tax and the tax on share dividends would be scrapped altogether.

But doesn't this sound like a windfall for the rich and a recipe for a public spending disaster?

Experience suggests otherwise. When tax rates are cut, as they were in the 1980's, the rich actually pay more, as they don't bother with tax avoidance schemes. It's those on lower incomes who gain most, by the higher tax-free allowance. As for there being less money for schools and hospitals, yes, there would be a shortfall for a year or two which would have to be covered by extra borrowing. However, cutting taxes has been proven to make the economy grow, so the extra money required would soon be made up. One of the main appeals of flat rate taxation is its simplicity, so why haven't the other parties considered it? Perhaps because if any future chancellor tries to bring in allowances to favour minority groups whose votes they are chasing, or to introduce stealth taxes, they will be easier to spot!

Sadly it seems only UKIP believes in open government these days.

(With Thanks to Gerard Batten UKIP MEP)

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