Since 1997, the British taxpayer has paid substantially more - not less - in taxes. In fact, the average British family is worse off now than it was in 1997 and considerably worse off than it was 26 years ago.
Taxes have actually risen since New Labour was elected in 1997. Mortgage tax relief for house buyers has been abolished and the tax burden has been moved from direct income tax on to indirect value added tax (VAT). This iniquitous tax, increased under New Labour, was introduced as part of the price Britain has to pay for being a member of the European Union.
A tax system cannot be fair when a multi-millionaire or someone receiving in excess of £250,000 per year pays exactly the same tax (VAT) for goods or services as someone who is unemployed or a pensioner struggling on £82.05 per week.
The Socialist Labour Party demands that new rates of income tax should be introduced, thus ensuring that those who earn most pay most. We would introduce the following income tax bands:
1. income under £15,000 no tax payable
2. income between £15,000 - £25,000 20 per cent tax
3. income between £25,000 - £40,000 30 per cent tax
4. income between £40,000 - £50,000 40 per cent tax
5. income between £50,000 - £100,000 50 per cent tax
6. income between £100,000 - £200,000 60 per cent tax
7. income over £200,000 70 per cent tax
The Socialist Labour Party is committed to the introduction of a completely new tax system - one which would abolish the iniquitous VAT altogether, and transfer tax liability from indirect to direct taxation.
Our Party would increase corporation and capital gains tax by 100%. These measures together with a graduated income tax system would wipe out the European Union's VAT/indirect tax liability, as well as ensuring that the 'fat cats' and all those on very high incomes would have to pay income tax directly in accordance with the income they receive: a fair policy based on Socialist principles.
Taxation and the Super–Rich.
It is a commonly held belief that the rich in Britain pay more taxes than the rest of the population, however this is a myth.
Taking the most recent data available it is revealed that the top 20% of taxpayers, the richest in society, paid 35% of their income in tax, but the bottom 20%, the poorest in society, paid 37.9% of their income in tax.
In the book ‘Rich Britain’ author Stewart Lansley noted “Increasingly, it appears, the rich are being treated as a special case in Britain, not in the sense of being required to pay more, but being legally allowed to pay much less.”
And according to the Sunday Times, the super-rich can avoid paying virtually any tax in Britain apart from council tax.
The New Labour government have gradually shifted the emphasis away from direct to indirect taxation such as VAT, fuel duty, vehicle exercise duty, fossil fuel levies, stamp duty on house purchases, air passenger duties, tobacco and alcohol duties, insurance premium tax, TV licenses, custom duties and the list is endless and growing.
As the SLP points out in its Manifesto we believe that the problems surrounding us have not just been caused by years of Tory and New Labour misrule, but by capitalism, a system that creates inequality and injustice, and that in the longer term it is socialist measures that are needed to tackle this root cause of the problems we face.
However, in regard to taxation and because a succession of governments have enabled the rich to evade their share of taxes, we would with immediate effect abolish VAT and introduce new income tax bands, transferring tax liability from indirect to direct taxation.
A graduated income tax system would wipe out the EU’s VAT tax and ensure that all those on very high incomes would have to pay income tax directly in accordance with the income they receive.
Further, as outlined in the successful Motion passed at the SLP 2005 Congress: “ Because of the obscene accumulation of wealth of the few compared to the absolute poverty of the many caused by Capitalism and encouraged over recent years by the Labour Government, we wish our SLP to increase its armoury of policies to reverse this devastating state of affairs. We feel that other measures including a wealth tax and the taking of the economy’s assets into state control, (without compensation) should supplement highly progressive direct taxation as outlined in our Manifesto.”
These measures would be the immediate steps we would take so that the redistribution of wealth, away from the elite few and towards the majority of the population, would begin in earnest.
This policy would provide British taxpayers with a fair and sensible tax system and would also pay - at least in part - for the policies advocated in this Manifesto.