Taxing times

Maybe, as Bill Jamieson implies (Perspective, 10 May), giving £10,000 to all 25-year olds is one of those ideas “so absurd only intellectuals believe them” (as George Orwell and/or Bertrand Russell opined) but Lord Willetts and the Resolution Foundation could have gone further on taxation reform. It should apply to all pensioners, not only working pensioners.

Many pensioners, especially but not only those in generous final-salary schemes, can end up with net disposable income little different from that in their last years of employment, as they no longer pay NIC, pension contributions or commuting costs; they receive the state pension and non-taxed benefits like the fuel allowance, free TV licence and bus passes; and some, while comfortably-off as I am, will pay only basic-rate tax if all their taxable income is just below the higher-rate band which applied to their marginal income when employed.

With longer life-spans, the foregoing could last for 25 years after retirement from 45 years of working life. Can the UK afford such largesse ultimately paid by the younger generations in an increasingly competitive world?

We should integrate NIC with Income Tax, reduce or abolish many allowances, restructure the rate per cent thresholds, and ensure wealthier pensioners, whether working or not, pay a fairer share. At the extreme, why should a retired Fred Goodwin escape NIC (an effective income tax just as much as “Income Tax”) while our state pension compares poorly with others, many women are penalised due to arbitrary cutoff dates, certain public services clearly need more funding, and our official National Debt approaches £2 trillion?

JOHN BIRKETT,

Horseleys Park, St Andrews