Readers divided over how Reeves should tackle taxes in autumn budget

wit Budget looming and a funding gap of up to £20 billion, Independent Readers have considered how Rachel Reeves must adjust Taxation,

according to latest reportThe chancellor facing the possibility of increasing income tax while cutting National Insurance (NI) on November 26, as she wants to balance the books.

Many readers argued that a modest increase in income tax, particularly for wealthy earners, would be the fairest approach – especially if combined with a reduction in NI to support low-paid workers and small employers.

Others expressed concern for pensioners and those on low incomes, warning that even a 2p rise could reduce take-home pay and reduce the value of the triple lock.

Many highlighted the difficult choices facing Labor: imposing taxes on savings, capital gains, wealth or VAT may be politically attractive, but these measures risk blocking growth and investment.

Some suggested alternative approaches, such as wealth tax Or simple reforms – cutting bureaucracy, streamlining VAT, or eliminating stamp duty – to increase revenues without harming productivity.

Here’s what you had to say:

The best way to increase revenue

Raising income taxes, especially for the wealthy, would probably be the fairest way to bring in more revenue.

And if the 2p increase in income tax was offset by a 2p cut in NI, it would help low-paid people and many small employers.

The government needs to raise taxes for those who can afford it to start a recovery in the British economy, which has been left in a terrible state due to Brexit and the actions of Conservative governments over the last 14 years.

clarstar

one mistake too many

If, as the article says, she will cut National Insurance by 2 per cent, I think that’s a good idea. Increasing NI was a big mistake as it hampered our growth as well as causing inflation and an increase in the number of unemployed people.

A 2 per cent increase in income tax would be very unpopular and would hamper growth, but would not have much impact on inflation and unemployment figures.

However, it comes at a bad time, as we learned today that she’s been spending £3,200 a month on rent while living for free at the taxpayers’ expense – and to make it even worse, She was doing this without proper paperworkI wonder if Starmer and Renner have heard of “one mistake too many”. With them, “a new scandal emerges even before the first one has ended”. For the trio who wanted to bring confidence back into politics, that’s a little rich – they are just as suspect as the Tories they were so sharply criticising.

Paul

taxes are required

A week’s long time in politics and also in economics.

I’d be happy to pay 2p more to see real improvement.

I don’t view taxes as something outside of Halloween, but as a practical and necessary part of life and death.

paige turner

we’re living on borrowed time

as your recent independent scene The piece argued, it’s really just about The only option.

We’ve been pampering it for years. The basic rate tax has never been lower. It was 41.25 percent in 1970, and successive governments of both parties gradually reduced it to 20 percent by 2008. Since then, we have also seen a big increase in the personal allowance, which stood at £5,225 in 2008, making the comparison even clearer.

Unfortunately, in 2008 we also suffered a major economic shock – the financial meltdown. And since then, we have been living on borrowed time and huge amounts of borrowed money, in a kind of fiscal fantasy where we never need to balance the books. And yes, the Tories were in charge most of the time since then.

I see no alternative, and I doubt very much whether the Government will do it.

stevehill

What will Scotland do?

I wonder what Scotland will do? Holyrood already has control over income tax rates and has higher tax bands and higher tax rates than the rest of the UK.

But National Insurance rates are not a devolved function – they apply to the whole of the UK – so if Rachel cuts NI rates by 2p, Scottish taxpayers would potentially benefit.

Although it is more likely that the Scottish Executive will increase its taxes anyway, there may come a time when those taxes will be deemed too onerous and this will lead to a rapid departure of higher paid workers to more tax-friendly regimes.

daveani

Pensioners will suffer losses

If the freeze on tax allowances remains in place, and pensioners and others’ income tax rises by 2p, it will mean that everyone on very low incomes will have significantly less take home pay to cover essential expenses in their lives such as heating and food.

Pensioners have already paid into their pension by paying National Insurance throughout their working lives, so it cannot be claimed as some kind of “benefit” for them. No other country with a social security system expects older people to continue paying into plans that are supposed to be funded throughout the working lifetime.

At the same time, it would directly reduce the value of the triple lock, which was introduced to bring British pensions up to the levels currently enjoyed by most others in Europe.

If Labor continues on this path, they will rapidly lose the pensioner vote – as well as all the other votes they have already lost.

adrian fox

labor is wasted

Labor has been wasted. They can do the right thing and be wiped out, or they can do nothing and be wiped out, or they can do the wrong thing and be wiped out.

correct: So – make VAT universal at a very low rate. This would raise billions of dollars and mean that a third of the tax code could be eliminated, freeing up 50 million hours a year to do useful things instead of compliance and tax collection.

She could also get rid of around 12,000 HMRC staff. 22-23p base rate.

Increase benefits by CPI – 0.2% per year for anyone who is not physically disabled or seriously mentally ill, or suffering from a sensory problem (blind/deaf).

Triple lock should be CPI only unless development allows it to be activated.

It would then have to focus its attention on helping businesses with a flat charge per square meter regardless of business type (imagine using rentable value! It just makes an expensive property more expensive) – this levels the playing field and reduces even more complexity, although admittedly this will increase inflation a bit.

Remove stamp duty from buying and selling houses as this is fueling the market and not causing secondary positive effects (employment, VAT, sales of white goods, etc).

Then he needs to cut the number of civil service employees.

And if he and Starmer can’t get this sensible and necessary package through Parliament, it needs to be dissolved and another general election held – or we’ll have a fiscal crisis and the IMF will come, and the cuts will be much worse. Just look at what happened to Greece and Spain.

Wrong thing: Not doing the above.

9diamonds

Tax the rich, not the workers

We need that property tax increase urgently. If 1 per cent on total assets over £5 million is not enough to bridge the revenue gap, how about 5 per cent on assets over £10 million? 10 per cent more than £20 million?

There is so little productive “work” going on in the UK that it seems a little daunting to keep pushing workers for more or to keep their earnings allowance for another century. Perhaps it is time to stop tinkering and return to economic sovereignty – perhaps even building some infrastructure in Britain again?

Let’s try something radical and adopt a meritocracy instead (i.e. the ability of the people who contribute the most).

inquiry

taxpayer takes too much

Continuing to increase taxes will only reduce tax revenues and further damage our economy (and it is already almost on its knees due to Brexit and terrible economic management over the last 10 years). At the end of the day, no one will work more efficiently if the only result of that work is that the taxpayer will take most of your hard-earned cash. It is no longer a fair tax system – it is more like a mobocracy.

grumpyoldman38

Some comments in this article have been edited for brevity and clarity.

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