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'Positive Policy' - Tax, tax, tax
Posted by David T Breaker (@DavidTBreaker)
Monday, 1st March 2010
With the government deficit well into treble figures, the overall National Debt set to double within a few years, and the economy showing no real intentions of entering into a sustainable recovery, it might seem odd to write a positive post on the issue of tax. Surely it would be easier, I hear you say, to simply skip this policy area as if it didn’t exist, to focus elsewhere and bury our heads in the sand, oblivious to the giant indebted elephant in the heavily mortgaged room. But you’d be wrong – because under a Tory government every cloud has a silver lining.
Although the cupboard is not only just bare but has been sold to the pawn-shop, the Conservatives remain committed to lower, simpler, fairer taxes. You can’t say that about anyone else.
Headlining the list is the abolition of Inheritance Tax (IHT) for estates valued under £1m – Osborne’s “death knell for death taxes” that was also the death knell for an early election – funded by a levy on “non-domiciled” residents who currently pay no tax in the UK. Lower, simpler, fairer.
As eye catching as the IHT pledge is, especially given its ability to provoke those on the Left who think seizing 40% of an individual’s wealth upon death is fair, it is by far alone. The Conservatives, working with the very limited financial resources left to the nation, plan to boost the economy, enterprise and jobs by having “the most competitive corporate tax system of any major economy within five years.”
By simplifying the tax code, reducing the number of bureaucratic corporate allowances, the rate of Corporation Tax (CT) will be cut by 3p to 25p, with the lower rate cut to 20p. Given that a report from Civitas argued that the CT burden was “jeopardising business and undermining our ability to escape from recession”, and firms such as Unilever and Diageo have threatened to leave the UK due to our high tax rates, this policy should be viewed not only in the light of what it will bring to the UK but what it will stop from leaving.
However – bringing our tax tour to an end – a less dramatic but much needed tax cut underlines the “fairer” aspect of Tory tax policy. Announced in 2007, the plan to abolish Stamp Duty for first time buyers on homes under £250,000 will be a help to the millions struggling to buy their first home – “giving people more opportunity, power and control over their lives.”
David T Breaker is a conservative blogger and internet consultant. He blogs at ConservativeHome’s CentreRight and at www.davidbreaker.com
