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Thursday, August 25, 2005
Free low earners from the burden of income tax

Geoffrey Clifton-Brown , Member of Parliament for Cotswold, reveals in today's Daily Telegraph that his Bill to free low earners from the burden of income tax is due for its second reading this October. This is very good news for taxpayers. Here is the letter:

Sir - I am very pleased to see that The Daily Telegraph has been encouraging debate over reform of the complicated and burgeoning British tax system.

The Conservative Party now has a responsibility to offer plans for a viable system of low taxes, designed to benefit everyone in our communities - especially the most disadvantaged. With this in mind, I have introduced a Bill, which is due for its second reading this October, to stop the immoral levy of income tax on the poorest wage-earners.

Through this Bill, I intend to help make work worthwhile for the thousands of low-income earners, from school-leavers to pensioners, who have clearly been disregarded by this Government.

I hope to exempt permanently those whose earnings are significantly below the national average from the income tax system entirely. This will encourage the creation of jobs, reduce the cost of welfare and provide opportunities for the poorest in our communities, who will be able to keep more of their hard-earned money. It will also help some of the poorest pensioners.

In the meantime, we should also continue to examine with great interest all proposals to introduce an internationally competitive flat tax system here in the United Kingdom.

Geoffrey Clifton-Brown MP, London SW1

Posted by Matthew Elliott | Permanent Link

Wednesday, August 24, 2005
Campaigning for a flat tax

The TPA is campaigning for a flat tax because we believe that it is a fairer and more economically beneficial tax system. TPA Chairman Andrew Allum appeared on BBC Radio 2's Jeremy Vine show on Tuesday to talk about the flat tax following his article in The Business on the subject. The time is ripe for a flat tax.

Posted by Matthew Elliott | Permanent Link

Monday, August 22, 2005
Dynamic effects of a flat tax

Amity Shlaes has written an excellent article today for the Financial Times on the dynamic effects of lower taxes and a flat tax. She is absolutely right to argue that large nations can expect increased growth and revenues following tax cuts, as well as small nations.

During this year's election campaign in Britain, none of the political parties referred to the dynamic effects of their fiscal policies. The Liberal Democrats assumed that work habits would be unaffected by their new 50p tax bracket for income over 100,000 pounds; the Conservatives fell into Labour's trap by not refuting Gordon Brown's assertion that tax cuts mean revenue cuts; and Labour ducked and weaved their way out of explaining that taxes will obviously have to rise very soon.

The media have suddenly opened up a very healthy debate about the beneficial effects that a flat tax would have for the UK economy and taxpayers. However, if any of the parties are to implement a flat tax or lower taxes they must start by making Amity Shlaes' arguments known to the public much more clearly.

Equally, economic commentators and institutes, such as the Institute for Fiscal Studies, who are the most trusted independent evaluators of fiscal policy in the media, have a duty to include dynamic effects in their models. If they do not, they are guilty of implicitly and unfairly discriminating against tax cutting proposals. This is a significant barrier to reform because, until they do so, tax cutting parties will always face the accusation that their sums don't add up.