Andy Burnham has spent years talking about serious tax reform. He will very soon be in a position to do it, or at least begin the process.

valdali

He doesn't once mention farmers. If there's a certain acreage exemption for farmers (the smallest acreage that would sustain a viable farm in that area, allowing them to make minimum wage income from their land) that is still risky as farmers face many uninsurable risks from year to year & many have bank loans to service as well.
If you exempt farmers all together, would you get enough revenue to replace the other taxes, give a lower tax burden for nearly all of them, & break even? I can't see that.
It seems an incomplete "explaining" when he doesn't adress the elephant in the room.

There's an important point about land value taxation. Farmland typically has a much lower market value per acre than land with residential or commercial development potential. An LVT based on market land value would therefore usually impose much lower tax per hectare on ordinary farmland than on urban or development land. So the existence of farmers doesn't by itself undermine the case for an LVT, although it does raise questions about rate-setting and exemptions.

He doesn't necessarily have to discuss every special case in a newspaper article. A newspaper column often outlines the principle rather than every detail of implementation.

I'm interested: too tired to comment tonight, but I'm very interested to see how this will unfold so posting as bookmark.

but it seems clear that small to medium working family farms will not be hit like before from the bits I do "Get" ???

Well MaizieD despite being on holiday visiting family I have taken time to read the report you’ve linked. It will take time to fully digest but I can see there are some very sensible and workable suggestions in there. I so agree with the need to bring back tax offices where the public can go for face to face help. The current obsession with absolutely every aspect of life being performed online is wrong in my opinion. Online should be an option not the only route.

You misunderstand me, Maizie. I meant I thought the Chancellor would do something about capping total ISA holdings.

I agree with you that investing in anything other that a start up isn't putting money into business.

I'd put money into bonds for state enterprise e.g. building more affordable homes and renationalising industries.

Earlier in this administration when there was talk of changing the ISA allowance to encourage more investment in stocks and shares, I thought Reeves would do something about it then but she didn’t. £100,000 seems reasonable.

I don't see the point of that, Graphite. The stock market is just a big speculation vehicle. Remember, share prices can go up and down. I'd rather not risk my money in it. The only exception I would make is shares issued for capitalisation of a company; that is the only instance when share purchasing has utility for the company, the rest of the time the purchase money goes to the seller (with a rake off for the stock broker, of course) and is never seen by the company.

I'd rather that the ISA money was invested in state enterprises with a guaranteed return (Like bonds, really) . At least it would then be productive, not a vehicle for speculation.

Cossy

I’d never even considered farmers! I was too busy think about elderly people who bought houses with lots of land say 55 years ago and would be unable to pay this tax in many instances.

Yes, but the elderly do seem to be the easiest group to prey on.

I agree about ISAs. It seems daft to limit annual contributions, but not the total held in them tax free.

Farmers' needs are important as we do need to start becoming more self sufficient in food.
The whole wasps' nest of land inheritance in farming communities is huge and problematical.
And day to day they are working on very tight margins. Our local dairy farmer has had high investment expenses on equipment but makes nil profit on his milk. If they had not diversified into ice cream they would have gone under.

I agree with all of RM’s proposals especially the big yield ones: restricting tax relief on pension contributions, bringing back the investment income surcharge, getting rid of the lower rate of NIC for top earners, capital gains tax on the PPR.

I would definitely cap ISA contributions in a lifetime despite the relatively little additional tax yield. If someone has invested the maximum in ISAs since they began (and maybe had TESSAs before that) then they would now have over £300,000 invested. With an average yield, it’s equivalent to doubling the tax free personal allowance each year.

Earlier in this administration when there was talk of changing the ISA allowance to encourage more investment in stocks and shares, I thought Reeves would do something about it then but she didn’t. £100,000 seems reasonable.

About a trillion is currently invested in ISAs in the UK. A J Bell estimated that up to 2.5 million people max out their ISA investment each year. I figure if you have £300,000 squirrelled away and can save £20,000 a year you can pay a bit more tax.

Cossy

Ilovecheese

Everyone does pay tax. VAT

I guess Doodledog means Income Tax, I agree, we all pay taxes of many different kinds.

We do, but it is workers who have to give out money they have earned. VAT is paid on top of that, out of taxed income for workers, and from money someone else has earned for non-workers. It's really not the same thing, and people (particularly young people) are getting sick of it. There are those who don't pay into the system at all, often for years, and others who have no choice but to pay for them to have a free ride.

IMO we need to shake things up so that we change the situation where an ever-decreasing number of people are paying for an ever increasing number of others - whether those others are pensioners, people on benefits or just those not in work.

In many ways, I think that pensions are outside of this, as most pensioners have paid in for decades, but the system means that it is workers who are paying our pensions. That is not our fault (we didn't set up the system), and I don't think that we should be blamed for it, or penalised in any way, but moving forward the system needs to be tweaked so that it doesn't go on like this forever.

My point, really, is that people always assume that tax should be paid by those who are in work, who are also contributing their time and skills to produce goods and provide services. It is just not fair that they should be expected to carry everything. I would like to see more imagination used in any reforms to redress the balance a bit.

But I am not an economist, so can't imagine how you could possibly find a way to do this that would be seen/accepted as fair for all.

How about reading suggestions from people who have thought about making tax more fair and productive?

I will link once again to Richard Murphy's 'Taxing Wealth Report' in the hopes that a few people bother to read it.

Forget about his connection with MMT, this is nothing to do with it. It is his proposals for how the current taxation system can be used to increase the tax take in a way that the burden falls more equitably on the wealthier members of society, who, at present pay less tax as a percentage of their income than do people in the lowest tax brackets.

Murphy has an economics degree and is a chartered accountant who dealt with company and personal accounts for 40+ years, He knows how taxation works and where it could become more progressive and where avoidance could be averted.

I'd be really grateful if some people could give me some feedback on what they think of his proposals.

This is the summary version

taxingwealth.uk/wp-content/uploads/2024/04/Taxing-Wealth-Report-2024-Summary.pdf

I don't think that any tax regime is going to please everybody.

Oreo

Instead of casting about to put any new taxes in place ( window tax anyone?) he needs to put up income tax, that’s where the most money comes from.Starmer didn’t have the guts to do it, and it does take guts as everyone grumbles, but Burnham needs to.
Then he needs to do a u turn on the policy of putting up NI on employers to get more younger people into work.

Put up income tax, yes, but I can't help feeling that this will never be seen as fair by most people as long as there are so many tax avoidance schemes that only benefit the wealthier sector of society..

But I am not an economist, so can't imagine how you could possibly find a way to do this that would be seen/accepted as fair for all.

Ilovecheese

Everyone does pay tax. VAT

I guess Doodledog means Income Tax, I agree, we all pay taxes of many different kinds.

Everyone does pay tax. VAT

Cossy

I’d never even considered farmers! I was too busy think about elderly people who bought houses with lots of land say 55 years ago and would be unable to pay this tax in many instances.

I thought the idea was that the tax would be paid on death, but I may have misunderstood.

I really don't think that increasing income tax is the way forward. Workers pay for far too much as it is, and those who don't work pay for far too little. Everyone should pay tax, as everyone benefits from living in the society it pays for.

Oreo

Instead of casting about to put any new taxes in place ( window tax anyone?) he needs to put up income tax, that’s where the most money comes from.Starmer didn’t have the guts to do it, and it does take guts as everyone grumbles, but Burnham needs to.
Then he needs to do a u turn on the policy of putting up NI on employers to get more younger people into work.

I can see the sense in this!

Instead of casting about to put any new taxes in place ( window tax anyone?) he needs to put up income tax, that’s where the most money comes from.Starmer didn’t have the guts to do it, and it does take guts as everyone grumbles, but Burnham needs to.
Then he needs to do a u turn on the policy of putting up NI on employers to get more younger people into work.

We do know that Burnham has been talking to economist - to what end we don’ t know.

I think Mr.Burnham will find out PDQ that having an idea is totally different to trying to implement it.

I’d never even considered farmers! I was too busy think about elderly people who bought houses with lots of land say 55 years ago and would be unable to pay this tax in many instances.

I guess the fallacy in the argument 'tax land because taxing it won't reduce it' is that taxing land could still reduce the proportion of managed land to wasteland.

Good luck to him because he'll need it - and a miracle.

The Tax System - an umbrella term for the multitude of taxes that have been invented over the years - is now such a vast and unwieldy beast that even a whole regiment of government accountants and financial experts wouldn't know where to start.

If any reform is implemented I don't expect to see anything substantial in my remaining years. I imagine such a task will have to be rolled out over a couple of generations.

He doesn't once mention farmers. If there's a certain acreage exemption for farmers (the smallest acreage that would sustain a viable farm in that area, allowing them to make minimum wage income from their land) that is still risky as farmers face many uninsurable risks from year to year & many have bank loans to service as well.
If you exempt farmers all together, would you get enough revenue to replace the other taxes, give a lower tax burden for nearly all of them, & break even? I can't see that.
It seems an incomplete "explaining" when he doesn't adress the elephant in the room.