LIFE will introduce a simpler Income Tax system, and allow local Communities to keep their local tax revenues from property or council taxes.
ALL income will be counted the same: earned, unearned, inherited and capital gains will all count the same as income.
We are in this together, so everybody pays income taxes. The idea of “taking low income earners out of tax” leaves society dependent on the taxes paid by the rich – this is completely upside-down thinking.
A basic rate of Income Tax (including and replacing National Insurance payments) will be 30%, up to the national median wage (£22,400/year). An additional 5% is added for each multiple of the median income (2X, 4X, 8X, 16X, 32X, etc.), capped at a maximum marginal rate of 50%.
We will reduce the personal allowance to £5,000 a year per person.
To see what income taxes you would pay use this online calculator. (NOTE: if your yearly earnings are less than the median income, your taxes will be less than what this calculator shows.)
Paid Fair for WellFair
All income taxes will be 100% dedicated to covering the costs of providing the WellFair services.
The total income tax revenues will be distributed to Communities per person resident in that Community.
The amount will be the same for every person in every Community. Community government will be responsible for delivering the WellFair services, and will not be allowed to use their WSG distribution to pay any benefits in cash.
As WellFair replaces welfare, and reduces the cost of living for the elderly in particular, there will be scope to reduce the Income Tax rate. Cash pensions will be replaced in part by equally valuable services delivered free of charge, and the remaining cash portion of pensions transitioned out of Income Tax revenues to be paid for with revenues from other taxes.
Everyone will be allowed to pass on up to £1,000,000 tax free during their lifetime. All transfers above this limit will be taxed as income to the recipient.
VAT will be set at a level necessary to pay for expenses not included in wellfair.
Current budget projections suggest that the rate of VAT can be reduced after Wellfair is introduced.
Corporate Tax & Business Rates
Corporation Tax will be harmonised with the personal Income Tax rate structure so that there is no penalty or advantage for small businesses to be sole proprietorships or incorporated. The maximum rate cap on Corporate Tax will be set at 35%.
Business Rates are effectively a local tax, and once Community Assemblies have been elected, these taxes and their revenues will become the responsibility of the local Community.
Communities will keep all Council Tax and property tax revenues, and have the right to set the level of those taxes, once they have elected a local Assembly.
Rises in Council Tax will be capped at 10% a year.
Communities and Regions will be allowed to raise local income and sales taxes after 2 election cycles.
The Scotland Act 2012 already gives tax varying powers to Scotland (likely to be a single Region) to be administered by HMRC effective 2015.