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Reduce Bureaucracy By Reducing Income Tax

Comment 2nd July 2010

Increase the threshold for Income Tax significantly – say to £50,000 p.a and remove most people from the Income tax system – with significant savings in administering income tax. Tax Credits cease to be relevant either.

To replace the revenue increase direct taxation – primarily VAT. There is no consequential increase in the adminstration of VAT as it is collected anyway atthe current rate.

Ensure that essentials are zero rated for VAT ensuring the less well off do not pay the increase.

A tax system then based upon peoples spending and related to whether they can afford it. If you buy the luxuries in life you can afford the tax.

Government should then live within the budget of what the population can afford.

Why does this matter?

To reduce the costs of administration of the very complex tax and tax credits system without consequential cost in administration elsewhere. To ensure that the less well off can afford the essentials in life and can choose to pay tax or not they want the extras. The well off contributing as they do now but related to their spending not their income. VAT is also far more diffiucult to avoid thus cutting costs of enforcement and evasion.

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