I’m glad that we are finding a certain amount of common ground, that we need to fight high taxes on the poor. I think it’s important to point out though, that isn’t just the result of VAT, other indirect taxes are just as regressive:

Green taxes. Push up the price of electricity – as current Government climate change policy does by 14%, and that figure is likely to rise sharply – and you will hit the poor far harder than the rich, as electricity is a necessity. We’ve pointed this out in a number of reports.

‘Sin taxes’ on booze and cigarettes. The minimum price on alcohol that was recommended on your blog the other day would hit the poor particularly hard, as it would be most likely to increase the price of cheap booze which sells to poor people.

If you seriously want to cut taxes on the poor, that is going to be very hard to reconcile with a commitment to Pigovian taxation of any kind.

Best,
Matt

I’ll let you know which bits I need to pay for, not the other way around. Feel free not to supply with whatever you like. I can buy it at half the price on the open market anyway.

However, there are much more progressive ways to reduce the tax share at the bottom than raising the threshold as the LibDems propose: we might be able to provide another graph-laden LFF post in explaining a better way to achieve the goal, perhaps the other side of the pbr.

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The interesting difference about ‘fair taxes’ is highlighted in Tim Montgomerie’s “their fair share, whatever that means”

Tim is highlighting the overall proportion contributed, regardless (as Will observes) of means and income. The implication is that they are paying a fair share, or a more than fair share. Tim’s approach would be consistent with arguments for a flat tax, to which I expect Tim is somewhat sympathetic. If the rate is 20% or 25%, those who earn more pay a higher amount at the same rate.

That is against the current approach of progressive taxation: a higher share is paid on higher earnings. Our public attitudes workshops for the JRF found strong support for this principle, and particularly strong fairness objections to a lower rate being paid by higher earners. (That also offends ‘live by the same rules as us’ instincts, which are very strong ‘process fairness’ instincts).

However, the taxation system as a whole is not progressive: as Will shows. It is fairly flat, and sharply regressive at the bottom (because of the impact of indirect taxes particularly), and also regressive at the top, and also the impact of tax relief systems.

There would be strong public support for addressing this in a credible way.

I no longer pay any direct taxes to HMRC. Council tax, income tax, the lot.

I have not requested a British Potato Council or my rubbish collected every two weeks, so stop sending me bills.

It’s that simple

http://www.tpuc.org/

I’d get government receipts back to 38% (and possibly to 40%) through higher national insurance contributions from the richest, equalising capital gains tax, and cracking down hard on tax avoidance. Whereas I suspect you’d bring down public spending.