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Wednesday, 21 October 2009

Thinktank calls for 7p income tax rise to plug hole in state finances

The National Institute of Economic and Social Research is proposing this pretty radical change to fiscal policy (or raising pension age to 70) in order to plug the public finances.
Now, I've gone on and on before about making debt-tackling a priority in that doing it too early will mean trouble. I think 80s style trouble.

They said that "Britain's structural deficit – the underlying level of borrowing, excluding the extra borrowing caused by the recession – was running at 6% of GDP and that this was unsustainable."
While the structural deficit is a problem, we have to tread very carefully when addressing it.
There are issues around what actually brings in the most money: is it tax rises or tax cuts. That's something that needs more work, well beyond my means for sure.

But trying to raise all the money from the bottom of the pile goes against everything I stand for by hitting the poorest the most. If there were ways to raise this from higher up, or spread the load, then that might be something to look at.

As for the pension age rising to 70, i'd like to see it based more on length of service so that the poorest who leave school earliest and die earlier don't loose out

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