As MPs rush through the Finance Bill before the general election terminates parliament they might spot that Britain has introduced hypothecation – specific taxes raised to fund specific causes.
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The Treasury should not grieve too greatly at companies such as J Sainsbury (LON:SBRY) paying early bonuses to avoid the new top income tax rate. By paying during the 2009/10 tax-year the exchequer will receive 40 per cent tax now rather than 50 per cent later, and time can be more valuable than money.
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Non-dom tax status is causing much political controversy, but what exactly is wrong with paying UK tax on your UK income and foreign taxes on foreign income? If you were inventing a tax system, that seems a sound starting point.
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When is a dividend increase not an increased dividend? When the company denominates its dividends in dollars but pays them to UK investors.
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If a 50 per cent tax on bonuses is not enough to stop bankers boosting their own pay, what does it take?
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If the Vat cut was a damp squib, how come restoring the rate 13 months later threatens the economic recovery? Our retailers should learn to stop screaming.
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The stamp duty holiday on home purchases ends at the new year, but did it work? And if it did, should it be extended?
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It will not be fun to be rich in 2010. Labour plans a 50 per cent tax on earnings above £150,000; the Tories propose a £25,000 annual levy on non-domiciles and the Liberals pledge a 1 per cent tax on properties worth over £2m. Whoever you vote for, they’ll get you.
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If you don’t think the Liberal Democrats will form the next government then their proposed ‘mansion tax’ is irrelevant. Yet, as a good example of bad taxation it should be studied by every politicians who might have to find new ways to extract more taxes.
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With the 10p tax rebellion resolved, the Finance Bill is finally heading for Royal Assent raising the top income tax rate to 50p. Is it too late to suggest tax rates are upside down? They should fall as we earn more.
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