Our tax is too high
SIR – The Prime Minister and the Chancellor can insist that theirs is a party of lower taxes all they like; the numbers don’t lie.
This year the tax burden, measured as a percentage of GDP, will be higher than in any year under the last Labour government. There have been increases to the personal allowance and cuts to corporation tax, but increases in VAT, stamp duty and capital gains tax have more than offset these. At least five new taxes have been imposed on politically expedient targets such as businesses, banks and soft drinks. This marks an unwelcome departure from Nigel Lawson’s aim of abolishing a tax at every Budget.
The tax lock on income tax, National Insurance and VAT has not been conducive to good policy making, but has encouraged ministers to devise ever-more convoluted and economically incoherent ways of increasing revenue. The almost incomprehensible reforms to tax relief on pension contributions are a case in point.
It would be better to replace the existing tax lock with a commitment to keep the tax burden below a third of GDP. If this is exceeded in a given year, it should mean lower borrowing rather than more spending, and a commitment to fresh tax cuts to bring the burden back under target at the next budget. Mark Littlewood Director General,
Institute of Economic Affairs
John O’connell
Chief Executive, Taxpayers’ Alliance
James Bartholomew
Author, The Welfare of Nations
Professor Philip Booth Professor of Finance, Public Policy and Ethics, St Mary’s University and 11 others; see telegraph.co.uk
SIR – I run a small software company which has done well for me and my employees. We have also done well for the country, having paid our taxes on business profits in each of our 10 years of business. Our business is principally export, which means that most of our revenue comes from overseas.
Since I am a business owner earning over £80,000 a year, Jeremy Corbyn’s Labour Party now wants to “take me on” (report, May 9). This is disheartening. Mr Corbyn gives the impression of not understanding that taxes are paid by successful businesses and that exporting businesses bring in money that would otherwise go to other countries. Perhaps there are bad business owners out there, but Labour shouldn’t tar us all with the same brush. David Johnson
Melbourn, Cambridgeshire