In this world nothing can be said to be certain, except death and
taxes.Benjamin Franklin, Letter to Jean-Baptiste Le Roy, 13 Nov. 1789
According to the Shadow Chancellor this is becoming more and more true under this Government. In places like Kingston it is beginning to have a serious impact on the inheritance that we leave our children. The simple problem is that the Inheritance Tax threshold (the sum at which we get charged) has obviously not been rising as fast as house prices. In 1997 only one Borough in the country had average house prices that qualified for Inheritance Tax; today there are 86.
A very interesting perspective on this comes from the Adam Smith Institute who have calculated "Tax Freedom Day" the day at which we, the workers, start earning for ourselves and stop paying the Government.
This whole issue of course links to Labours General Election commitment not to raise income tax and yet still pay for the massive investment in public services. Instead of income tax rising all the other taxes have had to rise instead and the most painful has been Council Tax. Now of course the Lib Dems will jump up and down and say "Local Income Tax". Is it the answer? Will it not merely lead to only the low earning and the very rich living in Kingston? The calculation I hear is that those earning over £30k per year will pay more and yet you need to earn over £55k per year to get a mortgage for a starter property in Kingston. My fear is that it would squeeze out the families we want to see live in Kingston.
In any case there is a difference between having "the ability to pay" element in any taxation and the need for Local Income Tax. Remember there was no pain in Council tax before this Government came to power. Maybe what should be happening is that the two main parties should be looking at how to reduce the burden of taxation overall rather than just focusing on one element - Council Tax / Local Income Tax. There are those who also argue for a local sales tax but for the life of me I cannot see how the implementation of such a scheme would work in practice.
But for now we are stuck with this Governments policy on taxation, tempered by the natural tax reducing inclinations of the Conservatives and the tax and spend of the Lib Dems.
I think there is probably an issue over who wrote the death and taxes quote first. Whoever it was did not, I imagine, believe that taxes beyond the grave would be higher than those this side of the grave!
2 comments:
"There are those who also argue for a local sales tax but for the life of me I cannot see how the implementation of such a scheme would work in practice."
Lack of imagination is neither a very good policy, nor a very convincing argument.
Luckily for you, the lib dems have a little too much of it for their own good.
Good luck
Thanks Anonymous but I think you will find that even the Lib Dems are not proposing a local sales tax - unless of course they changed their policy again. They were going to give a £100 off council tax bills so who knows what they might cchange to next?
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