Death and Taxes


Governments seldom get any praise - so let me raise a small cheer on behalf of the Treasury's move to order Barclays Bank to pay £500 million in tax - which the bank's bosses tried to avoid.

The government also took the highly unusual step of of introducing retrospective legislation to prevent Barclays from getting away with its policy of 'aggressive tax avoidance'.

Now that has to be good news - whatever your politics.

And the fact is that if people actually paid their fair share of taxes - then tax rates could actually start coming down.

If I had a magic wand I'd bring back the old 10p tax rate - because that helped put money in the pockets of low paid workers - particularly women on part-time hours.

Abolishing the 10p tax rate was one of the craziest things Gordon Brown ever did - apart from bottling out of a decision to call a general election in October 2007.

But the former Labour leader did the wrong thing on both counts - and ended up paying a very heavy price because his premiership never really recovered from those two disastrous decisions.

The present coalition government is seeking to repair someof that damage by raising people's personal tax allowances to £10,000 - a welcome move that will also benefit the lower paid.

Quite when that will happen is another thing - but the sooner the better.

The other thing that I would do if I had a magic wand is to lower the 40p tax rate.

Because once you add on National Insurance contributions - anyone on a salary over £35,000  is keeping less than half of what they earn.

Handing over more than 50% of what you earn to the taxman - is no one's idea of an enterprise economy.

But to get to the point where tax rates can be lowered - the government needs to focus on a culture where so many people try to avoid paying taxes at all.

Or in some cases where they come up with fancy schemes - which allow them to pay artificially low rates of tax - by setting up bogus companies and things like Employee Benefits Trusts.

Which of course got Glasgow Rangers Football Club into so much trouble - and who are now facing £60 million plus tax bill.

No one likes paying taxes.

If they did, the Greek economy wouldn't be in such a catastrophic mess. 

UK taxes should be lower than they are now, but while the economy recovers going after the tax dodgers, scammers and benefit cheats - is a sure fire way to win public support.    

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