Lib Dems are a burden on UK plc
David Smith has demonstrated that the UK’s 50% top rate of income tax is one of the highest in the world and compares unfavourably with the EU average of 37.5% (Economic Outlook, last week).
I strongly support his argument that Britain needs an internationally competitive tax system. Surprisingly, that is not difficult to achieve on a revenueneutral basis, as Smith recommends.
The British system has always embraced higher rates of tax offset by numerous specific reliefs, which overwhelmingly benefit the better-off. By abolishing most of these reliefs, one can immediately afford to increase the personal tax-free allowance to £10,000 for all 30m income tax payers, to raise the high-rate threshold from £42,475 to £60,000, to bring the top rates down to 35% (the same as that enjoyed in the US), to make all pensions tax free, to increase the threshold of inheritance tax from £325,000 to £1m, to cut inheritance tax from 40% to 15% and to lower capital gains tax (CGT) to 15% (as in the US), all on a revenue-neutral basis! How is that for a start?
What prevents this? As a former member of the Liberal Democrats, I have come to believe that influential senior Liberal Democrats oppose virtually all these changes (except increasing the personal allowance to £10,000). It seems that they want to increase taxes rather than reduce them, retaining the 50% rate, charging higher rates on even lower incomes, and (as they insisted in the coalition negotiations) increasing CGT from 18% to a top rate of 28% without reinstating the reliefs. I fear that they are significantly increasing the tax burden for the middle classes and making the UK even less competitive.
Lord Jacobs, House of Lords, London SW1
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David Smith rightly called for the 50% top rate of income tax to be abolished but neglected to mention a Labour measure that is probably at least as pernicious, namely, making the 40% income tax rate retrospective on all income greater than £100,000.
This has led to some individuals paying marginal tax rates of as much as 65% and greatly increased administrative burdens on employers. A simple and easy-to-understand tax system is as much a prerequisite for growth as a low-rate one.
Paul Negrotti, Greenford, Middlesex
Name and shame PFI profiteers
I was horrified by last week’s article “Bonfire of the private finances”, with its litany of exploitation and grotesque profits hidden offshore, leaving a massive debt for the British taxpayer.
Why has it taken so long for the hordes of economists and accountants in the Treasury and National Audit Office to unearth the true facts about the costs of the private finance initiative? The government now has a duty to the taxpayer to demand the return of 80% of the excessive profits or to name and shame, with details of the PFI terms and returns being published.
Michael Pescod, Newcastle upon Tyne
Mixed green message
It is regrettable that many trade associations are sending out mixed messages on environmental regulation. On the one hand they welcome government initiatives to go green, while on the other they warn about increasing the burden on business.
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Trade associations must accept that their first responsibility is to their members and not the environment. Despite protestations to the contrary, the jury is still out on man-made global warming.
Furthermore, recent studies have concluded that for every job created in the green economy, three jobs are lost elsewhere.
Robert Durward, British Aggregates Association, Lanark
Pretty vacant
Regarding last week’s article “High street faces summer of woe”, the government doesn’t care about empty shops and offices. It takes full rates whether they are empty or not, so why worry!
David Thompson, Stillington, North Yorkshire
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