London Income Tax

In 2013 it was reported in the BBC that 25% of Londoners were living in poverty. According to London’s Poverty Profile. The study found that 28% of Londoners were living in poverty 7% higher than the English National Average. http://www.bbc.co.uk/news/uk-england-london-24517391

It is superficial to advocate that Governments have honored their long term promises to empower those who work in essence to make work pay there is still to this day the concept that Low Paid and Middle Income Individuals and Families should be taxed and then be compensated through tax credits.

That is a system that is complication beyond reason that is open to fraud and expense to the taxpayer and to the country at large. In London there have been attempts made at reducing the persistence of low pay in the private sector through the London Living Wage this is a pay settlement that should be maintained but reinforced through tax reform.

In reference to The London Progressive Journal Article that I published A new fiscal policy for London? by Oliver Healey
Thu 29th Sep 2011. http://londonprogressivejournal.com/article/view/853/a-new-fiscal-policy-for-london

I advocated “The London Assembly should be given tax raising powers as London’s economy differs from the rest of the UK in general, having higher housing costs and a generally greater expenditure. The power to reform income tax could, for example, be used to give London residents on low and middle incomes a tax cut to help them through these difficult economic times.”

In controlling Pay Poverty in London there is the requirement for Fiscal Devolution to the democratically Accountable London Assembly of such tax raising powers because in bureau shaping the London economy there would be savings made in removing in work benefits and their replacement by the London Income Tax.

The Tax could be administered through either a higher tax allowance or a reduced tax rate say 10% but if the Government wanted to take that 28% of Londoners out of poverty permanently and contribute to reducing the Budget Deficit.
They would be most advised to set a London Tax Allowance of say £3,500 and reduce the Tax Rate levied on Incomes in London from 20% to 10% this would enable the consolidation of benefits into straightforward and transparent tax reductions for the majority of Londoners.

If People retained more of their gross earnings they would not have to rely on tax credits to replace income that they should have kept in the first place.

In financing the tax reductions the budget block grant that London receives from Whitehall could be reduced in stages as the London Assembly takes over the collection of income tax revenue. Fiscal autonomy for London would see a saving in public expenditure, as the block grant would halve, but would also see London benefit from higher tax revenues in the long term. The London Assembly would have the finances to deliver the improvements that Londoners need but have long been denied because of inadequate political leadership.

In transforming The Future of The London Economy there will need to be comprehensive reform.

I believe that Government should tax less those who can ill afford to be taxed and then be reimbursed through Working Tax Credit.

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Tax Reform

“Tax or not to Tax that is the question”

Well in reforming the taxation system in this country let us consider the facts the Government have proclaimed the values of lifting millions of workers out of tax altogether. Not necessarily so they have reduced the Income Tax burden through the increases in the tax threshold the point at which income becomes taxable but they have not aligned National Insurance Thresholds to the same equilibrium standard.

This table shows the differential margin between National Insurance Thresholds and Income Tax Thresholds since 2007 / 2008

Date NI TAX
2007-8 £5,205 £5,225 -£20
2008-9 £5,465 £6,435 -£970
2009-10 £5,725 £6,475 -£750
2010-11 £5,725 £6,475 -£750
2011-12 £7,235 £7,475 -£240
2012-13 £7,599 £8,105 -£505
2013-14 £7,755 £9,440 -£1,685
2014-15 £7,956 £10,000 -£2,036
2015-16 £8,060 £10,600 -£2,540
2016-17 £8,060 £11,000 -£2,940

Traditionally Income Tax Payers were Tory Voters in the Middle Classes and National Insurance Payers were Labour Voters in the Working Classes. The distinction between the two is no longer in existence in terms of the tax system in respect to the above table.

In simplifying the tax system and reducing much of the bureaucratic administration the collection of National Insurance should only begin once income has passed £15,000 because there is no logic in deducting income tax payments and national insurance payments from Households then topping up those artificial low incomes through Tax Credits which is a Tax Refund. An expensive system to operate that costs £30bn plus each and every year.

In reducing tax burdens in the longer term there should be:

Zero National Insurance paid on income below £15,000.
Zero Income Tax paid on income below £15,000
Zero Council Tax paid on income below £15,000

The Triple Guarantee on Tax would ensure that tax burdens are reduced lifting 100% millions of workers and in reference to tackling millions of low income households specifically pensioners out of tax altogether.

Council Tax Benefit would be seriously reduced because the reforms proposed above would cancel out the need for council tax benefit expenditure in the first instance.

Working Tax Credits would be reduced because simply why should you be taxed and then given back the same money in the form of benefits.

When you should just keep your own income tax free to begin with.

Aligning the tax thresholds with Minimum Wage Increases would increase the post tax income that workers have in their pay packets to spend in the economy.

National Insurance Employers Contribution is a tax on job creation and a tax on pay increases this is something that has been used to control wage growth in the United Kingdom and is a contributory factor to the low pay culture that we have experienced now for successive decades.

Speech by José Manuel González-Páramo, Member of the Executive Board of the European Central Bank
Universidad Complutense
Madrid, 13 May 2005.

“Similarly, a payroll tax, in the form of employer social security contributions, raises the cost of labour.” Paramo 2005:

https://www.ecb.europa.eu/press/key/date/2005/html/sp050513.en.html

In reforming Taxation in the UK the problems of Low Pay can be solved or partially contained.

Dementia Care in the NHS

The government record on caring for Dementia Patients is poor the quality of treatment that sufferers receive from the National Health Service is fragmented with some counties giving better service and other counties giving Dementia sufferers poorer services. This state of affairs is not acceptable and needs to be changed with a clear and comprehensive plan. The number of Dementia Sufferers is estimated to increase from the current 766,000 to 1 million within the next decade an extra 234,000 people will be diagnosed with suffering from Dementia or one of its sister conditions. Dementia suffers are not a burden or a problem they are human beings with rights and feelings and Dementia Care has been overlooked by the politicians and by society. We need to ensure that the correct treatment is available to any Dementia sufferer anywhere in England and that the NHS has the budget and the skilled personnel that are required to care for sufferers.
On Budgeting for Dementia Care our NHS will be reformed with fewer managers and a more sensible pension scheme which excludes all earners over £50,000 we must plan ahead put in the place the equal funding per hospital that is required and ensure that GP’s when they suspect that a patient may have first stage Dementia that they are duty bound to refer that patient to a specialist.
One solution proposed by myself is that we have a national memory test for all adults over a certain age to ensure that patients with signs of dementia are assessed and begin treatment and support early. We need to ensure that Dementia sufferers and their families are given full support in order to ensure that they can live independent lives and enjoy a quality of life.  Through reforming NHS Pay and Pensions as outlined above we will keep money in reserve for recruiting 1,000 more specialist Dementia Care nurses and that our Hospitals have the space and money for specialist Dementia Clinics – palliative care is equal to medical care and so we will ensure that Dementia sufferers have access to specialist Health Visitors who will check on them and see how they and their families are coping.

Welfare

On reforming the welfare system in the United Kingdom in the 21st Century, there is the fundamental requirement for logical decision making.  The consequences of key policies implemented over the course of successive governments, have failed to build a fairer society whereby the poor are enfranchised and lifted out of poverty, where those who work have been permitted to retain additional percentiles of their income that they worked long and hard for.

With reference to the question of Housing Benefit – a highly topical and relevant issue. The principles that I hold on this issue & the decisions that I would advocate should be taken in order to affect a solution. Social housing rents that are scheduled to be reduced by 1% by George Osborne, should be reduced by 25% because cutting social rent, charged by Councils and Housing Associations would simultaneously reduce the cost of Housing Benefit to the taxpayer (according to recent statistics) estimated at £36bn a year. If rent costs are reduced resulting in a reduction in housing benefit which consequently means lower welfare spending by the State. This ultimately will enable the State to allocate more money to other public services, lower taxes or a combination of these two things.

Reforming Housing Benefit would have no negative impact on those who paid low wages as the rent burden for those workers would have been reduced. The cheaper rents would be achieved through the statutory use of social housing rent controls. The reduction in rent costs in Council Housing, also have the additional incentive that is abolishing the Bedroom Tax. The Discretionary Housing Payments made by Local Councils, in relation to the bedroom tax issue would become obsolete as rents were reduced and bedroom tax disputes became invalidated. Savings in Discretionary Housing Benefit would further entrench sound public finances and would contribute to the tax reductions that will be outlined in later articles.

A 25% reduction in Social Housing Rents is not a subsidy it is a cost neutral mechanism of saving the taxpayer billions in Housing Benefit. It would abolish the Bedroom Tax that has failed to produce the outcomes that it was created to achieve. The savings that I would intend to find in Housing Benefit would be £5bn per year. In steering this country to a lower tax future, the Personal Income Tax Allowance would be increased by £1,000 extra. The 25% reduction in social rents would progress over 5 years to 50% further reducing housing benefit and transforming the living standards of the working classes and reducing the tax burden of the nation at large.

 

 

 

 

 

 

 

 

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Since the politicians are incompetent at listening and acting upon the wishes of those whom they are supposed to serve

Perhaps we can be different