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Thursday, 26 January 2012

The Black economy, and how we can circumvent this in one fell swoop.

A new idea for taxation in Britain.

My aim here is to create a system where we bring all the full time and part time fiddlers of taxation (as a Libertarian, I don't really agree with taxation) into the tax system, in a way which will make it impossible to avoid.

We need to shift the emphasis from taxing income to taxing expenditure.

Apart from my aim of bringing the crooks into the taxation system, this may also encourage people to save more; as the more money saved would equate to more money being available for industry and business to expand.
So rather than bringing the tax threshold to £10K I propose bring the tax threshold way up to £40K. VAT would have to be increased and perhaps put on food, books etc. Initially, we need to do this in such a way that the tax payer is no worse off financially, if he purchases the same amounts.And perhaps have a two tier VAT system so purchasers of luxury goods in excess of £1,000 per item, pay a little more.

We would have to compensate people on benefits to cope for the extra costs on food, but nothing else. After all they are getting too much as it is.

Naturally it would not be as simple as this, but I have this feeling that the black economy has increased exponentially since we have opened our borders. After all, people in many European countries don't believe in paying income tax any more than we do, but they aren't so disciplined in paying as we are as many countries don't have the P.A.Y.E. system.. Especially as so many of then are handy with their hands and become plumbers, electricians, plastering and painting. We have lots of jobs done around our house and the insistence of paying in cash is everywhere now.

Of course it will mean a hundred thousand or so job losses in the public sector as we won't need a large Inland Revenue office in every town any more.

So, more VAT collected to counter less Income Tax, the black economy almost completely destroyed, more money saved and invested in Britain’s future. And, at the end of the day, our purchasing power would remain the same.

I am sure there are many weaknesses in my arguments, what do you think? And is there a better way we can do this? Let me know here.

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