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Saturday, August 27, 2011

Government works to close tax loopholes

One of the constant refrains of the left is that the Government should be closing tax loopholes and going after tax dodgers rather than cutting public expenditure. Well, as this article in the Independent shows, not only is this happening but it is not as straightforward as is claimed.

The paper says that Panama and the British Virgin Islands will be Chancellor George Osborne's next targets as he extends his crackdown on tax havens used by rich Britons to salt their assets away. They add that HM Revenue and Customs will aim to reach information-sharing agreements with Panama and the Virgin Islands similar to the one with Switzerland announced on Wednesday which will net the Treasury more than £5bn in unpaid tax.

To be fair this was work started by Gordon Brown but the present Government's pursuit of the agenda is equally as committed to maximising income to the Exchequer. However, its success depends on international cooperation and a willingness by other countries to work with the UK on this. As a result we do not always get everything we want.
The tax system is hideously complicated - it runs to three volumes when printed! The tax system basically needs scrapping and starting again. The more simple it is, the easier it will be to police and the harder it will be to avoid or evade. Tax Credits is a prime example of what is wrong with the tax system - millions of people are taxed and then have that tax given back to them in tax credits. It's farcical and it costs millions to administer. Don't take the tax in the first place!

The rate of tax also needs slashing - at least 5p in the £. Reduce taxes and people will have more money in their pockets. They will spend that money which will not only attract tax in the form of VAT but will create jobs because what they buy has got to be made, distributed, sold, repaired, etc. Also, the more money people have, the less they rely on the state to provide services which means spending can be cut to fund even more tax cuts.

So which of the high tax, big state LibLabCon is going to be first to steal this particular UKIP policy?
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