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Then as Matthew Parris suggests in this morning's Times National Insurance could be extended to the salaries of those on the state pension. Bearing in mind they would only have to pay anything on the amount by which their salary exceeded £15,000 p/a.. This could help cut the deficit in a relatively fair way.
And in the longer term this could help open a conversation about streamlining taxation by integrating Income Tax & NI with most tax breaks dropped. In the longer term one tax rate of just 20% of incomes in excess of £20,000 p/a could make our economy super competitive with plenty of job creation, higher wages & growing revenues all fostered by higher productivity.
And overseas aid could be overhauled too. £5 billion could be relocated to the MoD to help fund peace keeping, £6.2 billion into a reserve to fund emergency relief & the other £4 billion to pay for development projects in return for the UK & developing countries opening their markets to each others goods n services & investment.
Welfare payments could be axed for those with incomes exceeding £80,000 p/a, Barnett Formula could be repealed & all new roads could be privately funded by tolls. Job centres could be paid by results & retirement age for state pension & public sector pensions could be increased.
Major public sector reform is needed to balance the books & secure the recovery. Another example of that could be State Depts getting the money they spend on regulating private business as a fixed item of expenditure to be driven down annually to help curb over regulation & cut govt outlays.
By breaking the manifesto pledge not to frack you could have fracking on an industrial scale to boost job creation & by driving down energy costs you could boost economic growth. And by reforming the Bank Balance Levy you could cut it by 90% on banks who extend cheap credit to small/medium sized business start-ups/expansion. Banks with credit in businesses that aren't viable would face a 50% surcharge on this tax within two years if still providing credit to businesses that are not viable.
Areas with high unemployment would get to be new enterprise zones. Businesses which hired new staff would be exempt from business rates & employers NI.
Pension funds which mainly invested in any combination of energy, infrastructure & hi-tech sector would attract a substantial tax credit.
Reforming our regulatory system so as to win pro-growth trade deals post Brexit & to substantially reduce business costs sufficiently so as to spur investment & job creation to secure long term average non inflationary GDP growth of 4% p/a must be a priority.
And to boost confidence moving Bank of England inflation target back to 2% on RPI-x might be wise as might cutting corporate taxes to 10% & CGT rates from 28% & 20% to 15%.
Bold ideas are needed to produce a strong recovery.
Then as the recovery gathered momentum you could undertake reform of the public sector to boost efficiency & productivity so that long term savings can be secured to erode the budget deficit along with faster growth in the private sector made possible by reforms to tax & regulation.
One could call in Silicon Valley experts/entrepreneurs who could look at how working practices, AI & other tech eyc could bring the public sector up to date so that it was efficient & less wasteful and more fit for purpose for the 21st century. Reforming procurement & public sector pensions could be big challenges to get right.
Top rates of tax could be cut from 45% & 40% to 30% with threshold of £250,000 p/a & tax allowance claw back rule axed with plenty of the revenue loss from this found by axing most tax exemptions that favour the wealthy.
Corporate tax could be cut from 19% to 10%, CGT rates could fall from 28% & 20% to 15% and basic rate income tax down from 20p to 15p. And as 70% of the benefit of Inheritance Tax reliefs go to the top 20% of estates there might be a case for discontuing those tax breaks to fund raising the IHT threshold.
QUANGOs & the spending programmes that they administer could have sunset clauses applied to them so that they expire within 3 years. Most public sector recruitment could be frozen for four years, welfare payments scrapped for those with an income exceeding £80,000 p/a & triple lock ditched for pensions.
All of the above could make a real dent in the PSBR by 2024-25. If businesses and/or entrepreneurs had cash overseas then they could bring it home tax free during a two year period if 75% of it was invested in any combination of hiring British workers, buying plant & machinery manufacturered in Britain &/or investing in Research & Developement. Capital Gains Tax & Corporate Tax could all be cut to 15% using some monies from spending cuts. To boost demand so that there is an incentive for businesses to invest in new products starting thresholds for income tax & NI could rise to £15,000 p/a by 2024-25 subject to strict targets of cutting govt expenditure & borrowing being hit.