The Anonymous Widower

The Budget

Today we have the budget.

It is very much a waste of time, as the election is not even around the corner, but here in a few weeks.

But I have a more fundamental problem with budgets.  If you run a business, you take financial decisions on a day-to-day basis and not at one fixed point in the year.

So is the system we have rather outdated in a modern world were a crisis can hit you overnight?

I don’t think we want to have budgets every month, but we need to have a system that on the one hand is more responsive to events and on the other takes the variations out of such things as fuel prices.

What would I do?

• I’d tax all energy heavily and use the money saved to take millions out of the tax system.  It couldn’t be done overnight, but increased yearly it would have profound and positive effect on everybody’s lives.
• I’d also abolish Vehicle Excise Duty and replace it with a car transfer tax of say £30 or so to make sure all vehicles were very traceable.
• I’d also tax aircraft fuel.  It is ridiculous that it is tax-free.
• I’d have a top tax rate of 50%, but anybody you employ for whatever purpose would be allowable against that tax.  So if you have an idea, you could perhaps employ a student to do the leg work on it for say six months and then claim that against your tax.  Childcare, gardening and all those other things would also be allowed.
• I’d abolish Inheritance Tax.  I’ve had letters published in the Financial Times on that one.  Two pence on Income Tax would raise the same and rich never pay Inheritance Tax anyway.
• I’d increase the tax on tobacco.  Although, I doubt it would raise much money.
• I’d subsidise patents and IPR.  The costs at present strangle innovation by individuals.
• But the biggest savings will come from getting rid of projects that no-one actually wants, like aircraft carriers, Joint Strike Fighter, Trident replacement, identity cards, bureacracy, extravagant pensions for civil servants etc.  It is a long list!

I’ll add to this as the day goes on.

The aim though is to be tax neutral and perhaps even raise a bit more. 

If you take high energy taxes, then this would raise more tax than you think, as there are large numbers of people who don’t pay tax and always seem to have large 4x4s.  We’d be taxing the Black Economy which is a lot bigger than anybody thinks.

We should aim to have taxes that you can’t avoid or taxes that by avoiding them you create jobs and commercial activity.

March 24, 2010 - Posted by AnonW | Business, Finance | NuLabor, Tax