It will soon be time for me to put in my suggestions for the July 8th budget. I would therefore welcome your comments on what you would like to see.
So far I have said I want to see progress on raising the threshold for Income Tax and raising the threshold for the 40% rate of tax, as promised in the Conservative Manifesto.
I also want to see the rich contribute more. To bring this about I suggest bringing Gordon Brown’s rate of CGT and top rate of Income tax back in, as I think he had got it right in working out optimum rates for maximising tax from the rich. At 18% he collected much more CGT than we are currently doing at 28%. Many rich people now simply defer taking taxable profits or find offsetting losses to take with the rate at 28%. The rate of 45% on income is bringing in substantially more tax revenue than 50% did, and I would expect 40% to bring in more.
Mr Osborne also needs to explain his timetable and approach to Inheritance Tax. The detail on the extra tax free amount promised against a family home will require careful drafting and thought.
As all political parties now understand they need to speak up for strivers and hard workers as well as for the dispossessed and down, they need to grasp that means not just those on modest incomes but also those higher up the income scale. There is less jealousy around than political commentators imagine. Every higher earner has parents or children, brothers and sisters, friends and other relatives who earn less but who not resent their success. Someone may be earning £30,000 a year today, but still think it right to raise the 40% threshold to £50,000, as they hope to be earning that in the future or thin k someone they know or are related to might.