Coffee House

Your guide to all those tax cut proposals

22 February 2012

4:56 PM

22 February 2012

4:56 PM

Nick Clegg, Ed Balls, Liam Fox, David Davis, the Centre for Policy Studies, the Centre for Social Justice and the Sun. It seems almost everyone thinks George Osborne should cut taxes in his Budget next month — the only
disagreements are over how. Here’s a quick guide to the main proposals so far:

There will doubtless be other suggestions before 21 March when we will finally learn which, if any, Osborne has chosen.

UPDATE: The table originally gave the cost of the CPS’ corporation tax cut as £8.5bn. This is their ‘static’ estimate of the cost, but a more realistic estimate, derived from
the Treasury’s ready reckoner, is £4bn.

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Show comments
  • Silverghost

    The construction industry is really struggling. However, industrial buildings allowances were abolished last year.

    Why not offer a one-off first year allowance on the cost of a new building (not retail or offices)? That helps everyone in the supply chain and means far less of the expenditure would go on imported goods.

  • normanc

    Couldn’t all these be implemented and funded by a quick key press at the BoE?

    Money doesn’t grow on trees anymore, that’s true, it’s grown on billions of transistors.

    Wealth is a little harder to magic up.

  • Dimoto

    Incidently, where is the Sun’s suggestion ?

    It would probably be the only one worth looking at !

  • Dimoto


    I’m sure Osborne “gets it”.

    It’s the assorted busybodies, cranks and lobbyists who, at this time of year, feel the need to bore us silly with their nostrums on how to spend other peoples’ money, who don’t “get it”.

    They should save their breath.

  • The Crunge

    I thought it would be helpful to fill in one of the blanks for you. Under Ed Balls it should read paid for by “additional borrowing”. You know that stuff we are trying to reduce. I know the concept of debt reduction is a bit difficult for left wing readers but you are, after all, thick, arrogant and dishonest just like the author of the proposed VAT cut.

  • Stewart

    Raise the 40% threshold. There’s no way someone earning less than 35K should be paying 40% on anything. Pay for it by eliminating subsidies for windfarms, sacking all police community support officers, privatising NHS dentistry, allowing universities to go private, merge DECC with whatever DTI is now called, merge DfID with FCO and cut overseas aid to India and Pakistan. Furthermore, disband the FSA and remerge Justice with the Home Office. Have another look at the list of quangoes and take the axe to it aswell. At the end of all this there should be a few spare penniies. One can but dream!

  • AR

    Not headline grabbing, but no one is suggesting tax breaks for companies upping investment. Companies are running massive cash surpluses and instead of investing, are upping dividends (no CEO got fired in this market for increasing their company’s dividends).

    So perhaps a tax break on investment, paid for by a tax on dividends or a reduction in the deductibility of debt interest payments?

  • tom jones

    I’d much rather we concentrate on growing the economy before we start splashing out on rewarding people for being married. We should do everything we can for business and through higher GDP we’ll have more money in future budgets to spend on other things. No growth, no money to spend for 2/3/4 years. Not sure what part of that Osborne doesn’t get?

  • RPC

    The removal of the personal allowance for those earning more than £100,000 is an even more pernicious measure than the 52% tax rate. Restoring the personal allowance to all taxpayers should be a priority on the long road to getting us back to having an internationally competitive tax regime.

  • Trapped

    The common theme seems to be to wipe out tax relief at higher rate pension contributions.

    A couple of ideas I’d toss into the mix:

    Remove the green stealth tax on energy costs, as well as reducing VAT on energy bills to 2.5%, forcing energy companies to pass on the savings from both at a 1:1 basis.

    Ditch income tax, NI, and CGT, replace the whole thing with a flat 35% earning tax. You start paying that at £15,000, and get rid of the tax credits system as a result. From what’s been discussed alone there’s a feeling this measure would save the government around 60-70bn as well as allow them to seal up a lot of loopholes, probably generating half as much in extra revenue per year.

  • Cynic

    Why restrict a marriage allowance to couples with children aged 0-3? If a marriage allowance is a good thing, it’s a good thing for all married (or civil partnership) couples. Where’s your “fairness and equality” consideration, CSJ? It’s a shame that three of these suggestions are unfunded. Money doesn’t grow on trees, whatever Labour, judging by their actions when in power, might think.