Taxation in Britain has more than doubled in the 12 years of the Labour government.

We have an incredibly complex tax system that collects taxes from over 80 sources. We then have a huge bureaucratic civil service collecting it and then re-distributing it through the welfare state.

• Recent evidence on the abolition of the 10% tax band shows this government is not interested in looking after the lower paid single worker.

• We would propose the most radical change of taxation ever by removing income tax on the first £15,000 of earnings. There would be increasing rates of tax on the bands starting at 10% and increasing to a top rate for those earning over £150,000 of 50%. The bands would be phased so that no-one earning under £100,000 a year would pay any more income tax than currently and those earning typically £20,000 or less would be considerably better off. (The tax band for higher earners has now been adopted by Labour from April 2010. Our original plan was to tax at 48% over £125,000 per annum)

• The more we tax the country, the more people that will choose benefits, tax avoidance or the black market economy. This in turn puts a greater burden for those in paid employment. We must therefore stimulate the work ethic by reducing taxes in paid employment.

SOME FACTS ABOUT CURRENT LEVELS OF TAXATION

Taxes in the UK are now higher than the industrial countries' average and are considerably above those in Germany, Japan and the US, which will result in many middle class households seeing half their incomes disappear in direct and indirect taxes.

Since 1997 the Chancellor has been incredibly adept at raising Treasury tax receipts without appearing to actually raise taxes.  The result of imposing 80 stealth taxes in this period coupled with the effects of 'fiscal drag' on Income Tax, Inheritance Tax and Stamp Duty, has resulted in more than doubling the overall tax receipts from £270 billion to the 2007/8 estimated level of £551 billion.

According to the Office for National Statistics, the number of taxpayers paying higher rate tax has risen to 3.5 million and it is estimated that by the end of this parliament, the figure will reach 4 million.

The majority of this country is on a giant money-go-round — handing over taxes to receive benefits in return. Billions of pounds are being frittered away to pay for civil servants to keep the money-go-round spinning when it would be far better for most of the country to jump off.

On one side of this crazy pass the parcel, 31.6 million Britons pay income tax, five million more than when Mr Brown became Chancellor of the Exchequer. Figures for the other taxes have risen as well: for example, the number paying inheritance tax has doubled. So with one hand this Government takes away, but with the other it gives back, often to exactly the same people. On top of the 13.3 million children whose parents receive child benefits, 20 million Britons receive tax credits, four million get housing benefit, five million receive help with their council tax, 2.6 million get incapacity benefit, more than two million are on income support and more than three million Child Trust Fund vouchers have been handed out.

The full impact of these tax increases has not been obvious in personal budgets due to low inflation, low interest rates and low mortgage repayments. These are not a product of Gordon Browns prudence but a result of cheap imports from India and China keeping inflation down and interest rates being low globally.

However, recently it has been estimated by financial experts that rising levels of taxation coupled with rising interest rates, energy bills and Council taxes accompanied by only modest salary increases has resulted in the average family being 10% worse off than four years ago and upwards of two and a quarter million will experience some financial difficulty in the immediate future.

The Bank of England stated that in the UK the personal sector is too highly taxed and this is having an adverse effect on consumption.

Council Tax has become another form of stealth tax open to abuse by the imposition of often unfunded Central Government burdens on Local Government, e.g., housing for immigrants.

The CBI has warned that current Corporate taxes are unsustainable and that many of our largest companies may well seek to relocate their Head Offices to countries with more favourable tax regimes.  The UK Corporation tax rates are currently 5% above the European average and to discourage any such relocation, Popular Alliance would lower UK Corporate taxes and simplify their application.

The present Government's economic policies have entrenched public expenditure and other forms of state dependency across the country to such a degree that it is extremely unlikely that other parties will 'grasp the nettle' and address the urgent need to reverse this dismal state of affairs. 

WHAT MEASURES WOULD POPULAR ALLIANCE TAKE WITH REGARD TO TAXATION?

Initially, the policy of Popular Alliance is to ease the burden of direct taxes on all taxpayers and to collect less tax revenue. This would be affordable by reducing the bureaucracy spent collecting it and to target better the redistribution through the welfare system.

With this is mind, our policy with regard to individual taxes is set out below.

Income Tax

We would propose the most radical change of taxation ever by removing income tax on the first £15,000 of earnings. There would be increasing rates of tax on the bands starting at 10% and increasing to the new Labour top tax rate of 50% over £150,000 per annum. The bands would be phased so that no-one earning under £100,000 a year would pay any more income tax than currently and those earning typically £20,000 or less would be considerably better off.

Inheritance Tax

A new threshold of £1,000,000 would be established and thereafter to be linked to house price inflation.

Stamp Duty

Stamp Duty will be abolished below £250,000 then set at 2% from £250,000 to £500,000 .  Properties over £500,000 to be reduced to 3% from the current 4%.

National Insurance Tax

National Insurance contributions will be capped at current levels. The long term aim would be to reduce these for those earning under £15,000 a year.

Married Persons Allowance

The Married Persons' Allowance would be reinstated for all married couples adding £3000 to their tax free personal allowance as a couple. This could be shared between the married couple as suited to their circumstance.  This would typically be worth £600 a year for a family paying the lower rate of income tax.

Council Tax

We will reset current levels of Council Tax and future increases will be linked to the rate of inflation or less.  Unfunded burdens from central government would not be imposed in the future.

Corporation Tax

Popular Alliance will reduce this to the following rates:- 

Taxable Profits                       Tax

First £15,000                          None

Next £40,000                           14%

Next £250,000                         14%

Next £1,200,000                       25%

Over £1,500,000                      25%

This will give a much needed boost to manufacturing and industry, particularly to small businesses.  It should give an incentive to expand and create more jobs.

Capital Gains Tax

Capital Gains tax is a politically motivated tax and for the amount it produces does not warrant the cost of collection.  It would therefore be abolished.

Popular Alliance's policies will stimulate high productivity through the lowering of taxes and the diverting of valuable resources away from the Public Sector to the wealth creating private sector thereby giving to industry and individuals alike greater freedom in decision making and choice, and weakening the influence of the 'dead hand of government'.

Summary

We must stop overtaxing those on low and medium income, as they have become the biggest losers over the last 12 years. We must make work pay, minimise opportunities for fraud and recognise that a fair system is one where this happens.

We must also reduce the bureaucracy spent on collecting taxes, then redistributing it through tax credits and other benefits. Savings in fraud, bureaucracy and benefit re-distribution will allow the country to balance its books with far less tax revenue being received.

We must also recognise that the very high earners can afford to pay more and should not pay the same tax rate as those earning a modest income.

It is important to note that there is a huge potential saving as currently our EU membership costs us somewhere between £15 billion and £60 billion per year.

If these measures are adopted then the country can reverse the current trend of high taxes, high costs and bureaucracy and complicated benefits helping all hard working, honest people.

If you have any views on our tax policy, please feel free to send us your input to the following email : This e-mail address is being protected from spam bots, you need JavaScript enabled to view it