Labour Tax Plans?

[Lootman]

Combine Tax & NI? So that folks who currently don't pay NI will wind up paying equal to 'workers'

So your big idea is to tax pensioners more?

You know, the demographic that votes the most?

[Charlottesquare]

There's the answer, scrap IHT but raise VAT to 25% and CGT and Dividend tax to 30% to match Swedish levels. Still means the kids get less.

Paul

...and yet Sweden has (checks the billionaires per capita index) over 4 times the rate of billionaires than the UK?

The 30% CGT rate gets reduced to a effective 22% (I declared my gain there selling our Swedish house a couple of years back so had to research. On the other hand not all enhancement costs are allowable, if less than x crowns they get ignored. (Cannot remember what x was)

[Dicky99]

Don't worry.
The scrapping of non-dom status and VAT on school fees will fund everything they promise.

That's because the only thing they've promised so far is pre-school breakfast clubs. Yep that'll do it...

[didds]

Combine Tax & NI?
So that folks who currently don't pay NI will wind up paying equal to 'workers'

NI as a hidden tax in effect somewhat grates with me; Chancellors going on about "we will not increase Income Tax" - and then altering the tax burden of NICs etc ... (GB springs to mind?)

So yes Id agree with removing NICs from individuals and having a single rate of tax. As for how that affects those that don't pay NIC on their income eg pensions, that could be overcome by increasing the personal allowance for those demographics and thus a higher tax code.

[JohnB]

If you folded NICs into income tax, you'd still have to account for the accumulation of state pension rights, unless you wanted to make the state pension non-contributory. And would you break the rule that a pension accrues from employment earnings, rather than general income. Can of worms.

[TUK020]

Combine Tax & NI? So that folks who currently don't pay NI will wind up paying equal to 'workers'

So your big idea is to tax pensioners more?

You know, the demographic that votes the most?

I am not proposing this as a 'big idea'.
Wondering about possible routes for Labour to increase taxes.
You know, getting more feathers while getting less hissing from those likely to vote Labour

[Lootman]

So your big idea is to tax pensioners more?

You know, the demographic that votes the most?

I am not proposing this as a 'big idea'. Wondering about possible routes for Labour to increase taxes. You know, getting more feathers while getting less hissing from those likely to vote Labour

They usually think that involves taxing only the rich. But then the rich find 101 ways of avoiding that, and so the tax increases end up hitting the middle and the poor anyway.

I recall my first job after leaving university in 1975. Although on only a graduate starting salary (3K a year or so at the time), some of my income was taxed at 35%, just 5% shy of what is now higher rate tax.

Even with current rates, people like Branson and Dyson leave the UK. We should be lowering the top rates of tax and enticing them back, not punishing them and driving them away..

[TUK020]

I am not proposing this as a 'big idea'. Wondering about possible routes for Labour to increase taxes. You know, getting more feathers while getting less hissing from those likely to vote Labour

They usually think that involves taxing only the rich. But then the rich find 101 ways of avoiding that, and so the tax increases end up hitting the middle and the poor anyway.

I recall my first job after leaving university in 1975. Although on only a graduate starting salary (3K a year or so at the time), some of my income was taxed at 35%, just 5% shy of what is now higher rate tax.

Even with current rates, people like Branson and Dyson leave the UK. We should be lowering the top rates of tax and enticing them back, not punishing them and driving them away..

Think this thread is about what we think might happen, not what we think ought to happen

[gryffron]

The non-doms would not even need to completely leave. I imagine many of them have several homes in several locations. They can merely adjust the time spent in each home such that they are non-resident in the UK for tax purposes.

Taxing non-doms is hard. Gordon Brown tried it, and couldn’t get through the complexity in time. They have incomes from a hundred different tax regimes, with dozens of different tax treaties. Trying to legislate for all those is staggeringly difficult. That’s why the non-dom rules were introduced in the first place. As an easy way of getting some money from them without tackling the complexity.

I have no doubt Labour will try, it is a red line policy for them. But I reckon it will take most of the next parliament before it can reasonably be introduced. Which means very little chance of even the fantasy of increased tax take for several years.

Gryff

[Lootman]

The non-doms would not even need to completely leave. I imagine many of them have several homes in several locations. They can merely adjust the time spent in each home such that they are non-resident in the UK for tax purposes.

Taxing non-doms is hard. Gordon Brown tried it, and couldn’t get through the complexity in time. They have incomes from a hundred different tax regimes, with dozens of different tax treaties. Trying to legislate for all those is staggeringly difficult. That’s why the non-dom rules were introduced in the first place. As an easy way of getting some money from them without tackling the complexity.

I have no doubt Labour will try, it is a red line policy for them. But I reckon it will take most of the next parliament before it can reasonably be introduced. Which means very little chance of even the fantasy of increased tax take for several years.

Labour could just abolish the entire concept of tax domicile. After all, most nations do not have it and tax based only on residency.

Of course that would also mean that the UK could no longer try and collect IHT from the estates of deceased expats, or from inheritances left to the surviving non-dom spouses of UK residents. So that could end up leading to lower tax collections.

[Charlottesquare]

Combine Tax & NI?
So that folks who currently don't pay NI will wind up paying equal to 'workers'

NI as a hidden tax in effect somewhat grates with me; Chancellors going on about "we will not increase Income Tax" - and then altering the tax burden of NICs etc ... (GB springs to mind?)

So yes Id agree with removing NICs from individuals and having a single rate of tax. As for how that affects those that don't pay NIC on their income eg pensions, that could be overcome by increasing the personal allowance for those demographics and thus a higher tax code.

Yes, the Tories in the 80s headlined IT decreases whilst nudging up NI rates, my old Tolleys make interesting reading- how could the Blessed Margaret have done this?

[Lootman]

NI as a hidden tax in effect somewhat grates with me; Chancellors going on about "we will not increase Income Tax" - and then altering the tax burden of NICs etc ... (GB springs to mind?)

So yes Id agree with removing NICs from individuals and having a single rate of tax. As for how that affects those that don't pay NIC on their income eg pensions, that could be overcome by increasing the personal allowance for those demographics and thus a higher tax code.

Yes, the Tories in the 80s headlined IT decreases whilst nudging up NI rates, my old Tolleys make interesting reading- how could the Blessed Margaret have done this?

NI is only for the little people, who have to work. So Thatcher was being thematic there, broadening the tax base to enable lower marginal tax rates.

[wanderer]

CGT rates to move level with income tax rates
Dividend tax rates to move level with income tax rates
Personal pensions to come inside the scope of IHT
New council tax bands for high value properties

[Lootman]

1) CGT rates to move level with income tax rates
2) Dividend tax rates to move level with income tax rates
3) Personal pensions to come inside the scope of IHT
4) New council tax bands for high value properties

5) Those with money leave the UK.

[Charlottesquare]

CGT rates to move level with income tax rates
Dividend tax rates to move level with income tax rates
Personal pensions to come inside the scope of IHT
New council tax bands for high value properties

Dividends taxed at IT rates without any imputed tax credit for the Corporation Tax already paid by the company is a recipe for disaster re companies not distributing funds to their shareholders- every company becomes a Berkshire Hathaway.

[JohnB]

But with CGT taxed at income rates, the Total Return taxation rate is consistent, so there is no difference, in the UK at least, how companies reward shareholders. They could of course use capital growth to delay that return, to allow shareholders to choose to wait for more favourable circumstances, either in their personal circumstances or in tax regimes.

[BobGe]

Dividends taxed at IT rates without any imputed tax credit for the Corporation Tax already paid by the company is a recipe for disaster re companies not distributing funds to their shareholders- every company becomes a Berkshire Hathaway.

Things have been moving in that direction for a while now accompanied by all kinds of dreadful reasoning to support those goings on, all of which can presently be said to be unreasonable and unfair taxation, thus a disincentive, on those who would like to invest their earnings to support businesses and hence the country's economic growth generally. The introduction of this double taxation was claimed to be because Corporation Tax had been reduced to 19/20%, but where are we now?! Currently dividend earners are the only ones paying the Health and Social Care Levy (AFAIIA).

As for not distributing funds, the capital gains position is hardly much better. Allowances and lower rates were to compensate for the withdrawal of indexation. Now inflation is back, allowances are being cut and how long will it be before rates are increased.

The average Joe (or the pro) thinks this fair because people just receive dividends and gains like manna from heaven and have no comprehension of risk.

Hoping for a hung Parliament...

[servodude]

Dividends taxed at IT rates without any imputed tax credit for the Corporation Tax already paid by the company is a recipe for disaster re companies not distributing funds to their shareholders- every company becomes a Berkshire Hathaway.

Things have been moving in that direction for a while now accompanied by all kinds of dreadful reasoning to support those goings on, all of which can presently be said to be unreasonable and unfair taxation, thus a disincentive, on those who would like to invest their earnings to support businesses and hence the country's economic growth generally. The introduction of this double taxation was claimed to be because Corporation Tax had been reduced to 19/20%, but where are we now?! Currently dividend earners are the only ones paying the Health and Social Care Levy (AFAIIA).

As for not distributing funds, the capital gains position is hardly much better. Allowances and lower rates were to compensate for the withdrawal of indexation. Now inflation is back, allowances are being cut and how long will it be before rates are increased.

The average Joe (or the pro) thinks this fair because people just receive dividends and gains like manna from heaven and have no comprehension of risk.

Hoping for a hung Parliament...

Hung parliament would have been the best option - but I thing that's one more small boat they've managed to let set sail

I am yet to be convinced that there is an ideological drive in Starmer to be traditionally "Labour" in tax terms
- this next election looks to be being fought on the "other" axis - with next to no discernable difference in the fiscal arena

The difference between them will be down to one party having already been proven fiscally incompetent (especially for rich boys) and a bit too fascist for most..
..and the other mob

Starmer is the ultimate beige flag, but probably safer than a billionaire by marriage who didn't lack the political nouse to realise claiming to "stop the boats" was handing away his balls on a plate
- verbs he could have used succesfully include: improve, lessen, decrease, lower, cut, mitigate, ameliorate... but he said "stop"?!

Perhaps that was BJ et al leaving a trap??!... and perhaps that's the best hope for a hung parliament?
bring back BJ stand him next to Farage and have an election during the bounce?

Still means the election will be fought on the axis of "stupid reasons I don't like people I don't understand" rather than fiscal policy
- but at least it wouldn't be a dead rubber!

[88V8]

Starmer is the ultimate beige flag, but probably safer than a billionaire by marriage who didn't lack the political nouse to realise claiming to "stop the boats" was handing away his balls on a plate
- verbs he could have used succesfully include: improve, lessen, decrease, lower, cut, mitigate, ameliorate... but he said "stop"?!

And you can tell he's not a practical chap, or he'd have said 'sink'.

V8

[Eboli]

If any of your have had a private pension increase recently you may have seen that any letter from the Scheme Actuary still includes a reference to the Lifetime allowance (LTA). I questioned this thinking that the LTA had been abolished. But it hasn't! Indeed, it appears that by a sleight of hand the LTA remains in force till the end of 2025, which, of course, could allow an incoming Labout Government to reintroduce it (or more accurately charges on breaches above it).

There is ample evidence from Healey's papers that a wealth tax cannot raise money - hence the reason why he abandoned the idea of taxing until the pips squeaked. But perhaps Sir Keir knows better? Also there is ample evidence in the Brown papers that removing the remittance basis for non-doms was unlikely to raise any revenue. I suspect this wrongly described "loophole" would be restored within 5 years.

Taxes can be raised by shifting the burden of taxes with high economic burden to those with an inelastic burden (the most inelastic of which is a Land Value Tax) without affecting GDP. As CGT has one of the highest tax burdens I see no merit (and no money) in rasing it. Indeed the late Alistair Darling chose 18% in 2007 because it was near the optimal revenue-raising rate. In short I see little money in the long term in CGT and wealth taxes.

Melding NICs with Income Taxes hits not only pensioners but those with rental and other forms of "unearned" income to which NICs do not apply.

It may well be the case that tax burdens on individuals will be less that what they would have been under the amateur hands of Hunt.

Eb.