Monday, 10 January 2011

"Fairer ways to help balance Britain's books"

Guardian letters:

Brian Strauss (Letters, 7 January) says "We still await Ed Miliband's 'right tax at the right time'" as opposed to the £12bn VAT hike. I've no authority to answer for Ed Miliband, but I can put Brian's mind at rest with a few examples, any of which would be preferable to hitting the poorest hardest with VAT.
Bankers' bonuses are being taxed at 50%, yielding £3.5bn, but only for one year. If continued, and raised to a 75% rate, which would go down well with the public, it would yield over £5bn a year. Even the National Audit Office admits £42bn tax is lost each year, £15bn of it from evasion, fraud and criminal attack. HMRC should be able to get back at least half of this if properly staffed. Yet the government is cutting the number of tax inspectors, who raise an average £60,000 a year above their own salary costs, from 70,000 now to 56,000 in four years' time.
A Tobin tax on foreign exchange trades would, even at 0.005%, yield £7.7bn a year in Britain alone, according to recent research by the Institute of Development Studies. Abolishing the national insurance contributions ceiling, which would only apply to those with incomes over £750 a week, would yield £11bn a year, according to a parliamentary answer.
The Institute for Public Policy Research has just produced evidence that the banks could, beyond the discretionary bonus levy, pay back an extra £20bn out of the £68bn bailout subsidies they've received, quite apart from the £1.3 trillion of taxpayers' money put at their disposal for loans, guarantees and asset protection schemes. Most people would think that a fair cop after their recklessness nearly derailed the whole economy.
Michael Meacher MP
Labour, Oldham West and Royton

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