The Taxation and Benefit system needs an overhaul. A possible solution is to merge the taxation, national insurance and benefit systems into one.
Then one would need to create a system whereby there is a ‘minimum allowance’, (set by law and increased each year) that covers the basics in life which the employer would pay plus the appropriate ‘premium allowances’ (minimums set by law and increased each year) as the overall salary to the individual.
That total would then be taxed by deducting from the salary the ‘contributions’ less any ‘responsibility allowances’ (these would also have a minimum level set by law and increased each year). As the employer would not be paying national insurance, the salary rates would be higher and thus the taxes would also be higher.
Then if someone is unemployed or retired, the Government would pay the individual the ‘minimum allowances’ plus the appropriate ‘responsibility allowances’. Obviously the individual would not have to pay the ‘contributions’, nor would they receive the ‘premium allowances’.
Such a system would mean it could be managed centrally, and thus reduce the amount of time, paperwork and staffing required to manage the current way of doing things. It would need to be costed to see if it not only saves money but does not disadvantage the poor and vulnerable.
|Minimum Allowances||Food||Based on buying un-cooked, fresh and ethically sourced food.|
|Housing||Based on rent/mortgage payments for a two-bedroomed flat averaged across the country and divided by the number of adults in the household.|
|Transport||Based on using public transport in London.|
|Clothing||Based on mid-priced cost of one full-outfit for work and one for leisure-ware.|
|Premium Allowances||Qualification Level||Levels 1-5|
|The more difficult a qualification is, the higher the level.|
|Skill Level||Levels 1-5|
|The more complex a job is, the higher the level.|
|Responsibility Level||Levels 1-5|
|The level depends on how many people one is responsible for, or how much a budget they look after.|
|Risk Level||Levels 1-5|
|The level depends on what sort of physical and mental danger is involved.|
|For every year of service, an additional payment is made. How long such payments are made is up to the employer.|
|Payments only made for up to two children, but if triplets and other similar single births occur, an extra allowance is payable. Only one parent is allowed to claim this allowance.|
|The more complex a disability, the higher a payment is made.|
|Payment is dependent on what sort of support the person being cared for requires.|
|Contributions||Justice and Defence||Levels 1-5|
|The levels relate to the total salary paid to the individual||Includes the courts, police and fire|
|Learning and Vocation||Levels 1-5|
|Schools, College, Universities, Researchetc|
|Environment and Transport||Levels 1-5|
|Includes housing, energy and agriculture|
|Culture, Media and Sport||Levels 1-5|
|Includes managing the tax and benefit systems|
|Health, Safety and Well-Being||Levels 1-5|
|Includes hospitals, doctors, health and safety, ambulances|
|International Affairs.||Levels 1-5|
|Includes overseas aid|
|The above ‘divisions’ of ‘contributions’ are based on my blog, ‘Politics – 1’|
With regard to taxing businesses, a system would have to be designed so that they pay a fair rate and it is simple enough to make sure that they do not avoid paying it.
I would suggest that all businesses that operate in the UK pay a single business tax based on the following criteria:
|Basic Charges||Total UK Revenue Generated from products, services and other sources.||On a scale of 1-10.|
|Total UK Asset Value – buildings, equipment and services.||A percentage.|
|Total UK Senior Management Payments inc bonuses.||A percentage.|
|Premium Charges||Premium Products and Services.||On a scale of 1-5 depending on product group.|
|Dangerous Goods and Services.||On a scale of 1-5 depending on consequences of exposure to the goods.|
|Import Duties.||Varies according to country.|
|Ethical Reduction Charges||Energy Saved from any source.||On a scale of 1-10.|
|Good Employee Conditions inc temporary staff.||On a scale of 1-5.|
|Ethically-sourced materials in the UK and overseas.||On a scale of 1-10.|
|Each business would have a tax bill based on ‘basic charges’ plus ‘premium charges’ less ‘ethical reduction charges’.|
VAT would be abolished as businesses would pick up the cost through paying ‘premium charges’ on the appropriate goods and services