The so-called Taxpayers’ Alliance (TPA) joined together with the Institute of Directors (IoD) earlier this year to launch the 2020 Tax Commission, though despite the authoritative sounding name, this body has no formal status. Chairing the Commission was Allister Heath of City AM, nominally of independent status, though in reality another TPA stooge.
As with most of the TPA’s activities, this body is claimed to be working in support of ordinary taxpayers. So after almost eight months, and myriad press releases and blogposts, now is as good a time as any to check the hype against reality. And that reality is that the most noise has been made over the recently introduced 50p income tax rate. Probably because the TPA’s backers have to pay it.
It all started out so promisingly, as we were given “A Meeting Of Minds To Map Out The Future Of Tax”. But the focus on the UK’s top 1% of tax payers began soon afterwards: whereas a minimum wage of less than six notes an hour was “high”, that top tax rate was in the Commission’s sights. After all, it was “nothing more than a political gesture”. The answer was “Simpler Taxes”.
Yes, that 50p tax rate was a problem: Barclays were worried about retaining senior staff, and here began the myth that the new top rate was actually losing the Government money. No reliable figures were cited, of course, but there were lots of estimates. And strong tax revenues in January were not, repeat not, down to the new higher tax rate.
Anyone who said otherwise was “confused”, and in any case, the UK had been getting more than enough tax out of the well-off before the higher rate was introduced. Then came the Budget, and the 50p rate remained in force: the Commission was distraught to realise it was unable to instruct the Treasury. But the advice kept coming.
And in June came the clincher: Adele opposed the 50p rate. Plus it was only an “unaffordable gimmick”. But nobody took this advice seriously, so non-job holder Rory Meakin has returned to the subject today, his new star witness being former teacher Katharine Birbalsingh, who like Adele does not major in taxation. But, almost eight months on, where are the conclusions from Heath and his pals?
All will no doubt become clear, but for those who can’t wait any longer, I can reveal the general gist of the 2020 Tax Commission conclusions. Put simply, these will be abolition of the minimum wage, lowering the poverty line (both already advocated by the TPA), swingeing [further] cuts to public spending, and adoption of a flat tax which by sheer coincidence will benefit those who bankroll the TPA.
All will be justified in the name of simplicity and competitiveness, of course.