The UKIP manifesto continues to be the Government's mother lode

It's amazing really, given the millions of pounds thousands of hours and hundreds of advisers in the Government's orbit that they seem to be finding the UKIP manifesto such a productive seam for policy development.

Last week we had the IDS pension ideas, lifted nearly wholesale from our Welfare policy. Today we learn from Alison Little in the Daily Express that their brand new Quango, the Office of Tax Simplificationis advising the Chancellor to bring in another of our policies in the forthcoming budget.

THE biggest tax shake-up for ­decades which would merge income tax and National Insurance under a single rate is being considered by Chancellor George Osborne.
It could save companies and the Government hundreds of millions of pounds a year, say experts.
The plan emerged after the Chancellor appointed experts last year to dramatically simplify Britain’s complicated tax system.
His response to the Office of Tax Simplification (OTS) report will be made in his Budget on March 23.

Lets see what the UKIP policy states,

A flat tax system for Britain
...
- and merging existing income tax bands and employee’s National
Insurance contributions into a single flat income tax at a rate of 33%.

This of course is from our policies as they stood for the General election in 2005, that is the one before the last, so the numbers are a tad out of date,

UKIP’s proposal
recognises that national insurance payments (and self-employed NI) are essentially an
additional income tax rather than contributions to a social fund. We would combine
income tax and employee’s NI contributions into an income tax at the single rate of
33% for all income above a raised personal allowance of £9,000 per year.

But we are in the process of a full scale policy review and new figures and details will be available shortly.
Of course we are delighted with these proposals from the Treasury Quango, and only hope that the Chancellor will take them on board.

While he is at it he should look the rest of the document, it could save him and his experts a great deal of time, and the country a great deal of money.

How about no income tax on the minimum wage? Or transferable tax allowances. Just remember people. UKIP is only about the EU 'n Immigration, so you best not trouble your little heads about the rest of the manifesto.

Odd where the Government gets their ideas from

The latest statement about personal tax allowances by gordon Brown have a ring odf familiarity about them,

Tax allowance 'may rise to £10,000'
Gordon Brown is considering raising the tax-free allowance to £10,000 as part of measures to help families struggling with the credit crunch, a close ally has claimed.

John McFall, chairman of the influential Commons Treasury committee, said he knows the move - which would effectively exempt millions of low-paid workers from income tax - is "in the Prime Minister's mind".

Currently workers do not pay any tax on the first £6,035 they earn.

But Labour MP Mr McFall called for that figure to be raised significantly.

"We should put money into the pocket of those with the lowest incomes.

"These are the people who most need our support," he told a newspaper.

"This would also be a fiscal stimulus since this group is most likely to spend rather than save."

Upping the limit would also benefit those earning more, because they too would only start paying basic rate tax at £10,000, he added.

Now where have I heard something very similar to that before? Oh I know, the UKIP tax policy,

Make all taxpayers better off (mostly by £1,100 per year) and take a further 4.5 million lower paid out of income tax altogether - by raising the tax-free personal allowance to £9,000

The Laffer Curve explained

Dan Mitchell of the Cato institute is a friend of mine, and he has just posted this little video explaining one of the basics of modern taxation policy.



Just a shame that our own politicians don't seem to understand it.

This will annoy the tax harmonisers

Cripes, I need to get posted to Bulgaria which this week has introduced a 10% flat rate on its income tax.

From January 1 2008, income of physical persons in Bulgaria will be taxed at a flat tax rate of 10 per cent, Parliament decided on December 17, when it accepted in second reading changes to the Law on taxation of income for physical persons.

Income from life-insurance contracts after the end of the contracts, would be taxed at 7 per cent, Dnevnik dialy said.

Income taxes on dividend
and liquidation of shares will be five per cent in 2008.

If nothing else this will cause further headaches in Brussels where the rise of tax harmonistaion up the EU's agenda continues in its inexorable fashion.

Post Script
OK so a Swiss Canton has trumped that with a 1.8% rate - but you would have to live in Obwalden which has a population of 33,755 and is, dare I say it quite quiet.

Now tell me why is it that the idea of a flat tax is so scary in the UK?