Friday 31 August 2007

"It is VAT and NI that have direct, negative impact"

My letter in today's FT.

Says it all, really.

6 comments:

Vindico said...

Nicely put Mark. I submitted to UKIPs "Jobs & The Economy" policy group that employers NI should be cut - threshold raised to the £9k personal allowance so that £9k of earning would have no tax wedge. Even with a slightly higher rate of employers NI on earnings above £9k of 15% it would cut the cost to the employer for employees earning up to £33k, and only cost a net £2bn.

Mark Wadsworth said...

I was thinking the other way round, get rid of all exemptions like Earnings Threshold and contracting out and have a flat fiscally neutral rate of about 7% on all income.

UKIP's flat tax/welfare proposals have already significantly reduced tax for lower paid, so it's now more a question of reducing marginal rate for employees.

And then phasing it out completely.

Let's see which one (if either) they go for!

Vindico said...

that is another option. flattening is always good, although regressive in that it makes low wage employees more expensive. But i could be satisifed with a low flat rate.

Or combien with a citizens income and scrap the personal allowance for income tax as well. Then employers just need to pay wages net of tax and calculate a flat rate % of their wage bill to pay directly to HMRC.

Mark Wadsworth said...

"Or combine with a citizens income and scrap the personal allowance for income tax as well. Then employers just need to pay wages net of tax and calculate a flat rate % of their wage bill to pay directly to HMRC"

Now you're talking! This is another fine idea that I submitted to UKIP's policy people, so far feedback has been positive.

bgprior said...

Well done on getting published, Mark. Agree on NI, disagree on VAT (as a priority). Strongly agree, as you know, on Basic Income.

I've set out why I only half agree with you over at Picking Losers. I'm afraid you've provoked me into a bit of an essay, which is why I'm a bit slow in commenting.

Mark Wadsworth said...

Nice essay, I have commented over on yours.