As Benjamin Franklin wrote back in the eighteenth century, “in this world nothing can be said to be certain, except death and taxes”. So while tax policy may not set hearts racing, anything that takes money from people’s pockets will provoke a strong response.
Already, in government, we’ve had major successes. Our flagship tax policy of a £10,000 tax-free allowance is being implemented, which will provide millions of taxpayers with an tax cut of £705 per annum by the end of this Parliament; we’ve raised capital gains tax for higher rate taxpayers; and we are clawing back £7bn worth of tax through a clamp down on avoidance.
So where should we go next?
The Federal Policy Committee (FPC) has established a working group on tax, which I chair. You can read our consultation paper here. Our aim is to present a policy paper to Conference in Autumn 2013.
We believe some fundamental challenges are:
- How do we create a tax system that is fair? What should we do to achieve a tax system that is progressive in relation to income and wealth; that ensures those earning the lowest wages are not disadvantaged by working; where wealthy individuals and businesses make their fair contribution; and those who seek to avoid paying tax are prevented from doing so?
- How do we create a tax system that is simpler, easier to understand and more predictable? One with less complicated rates and reliefs – especially for pensioners and small businesses – and which is characterised by well publicised overarching roadmaps for strategic reform.
- How do we create a tax system that is greener? One that taxes environmental pollution and resource depletion and gives bigger incentives to sustainability and the responsible use of resources.
- How do we create a tax system that is more decentralised? So that there is a clearer link between local services and local accountability and greater freedom for democratic local government to raise, and spend, revenue.
- How do we create a tax system that is more efficient? Recognising the importance of incentives to work and save; and growing global competition.
On Saturday 22nd September, we will be taking our work to the Party’s Autumn 2012 Conference, in order to hear members’ views. There will be a consultative session between 10am and 12.30pm in the Grand Hotel (Charlotte Room), to which I would like to invite all interested conference attendees.
I’m also aware that many people, for one reason or another, are unable to come to Conference but would still like to participate in the policy process. We will be undertaking a survey of members shortly but should you wish to respond to our consultation paper, please direct your comments to Kevin Norton firstname.lastname@example.org.