Monday, April 21, 2008

Resolving the 10p tax band dilemma

The media is convinced that the government has got itself into a hole by eliminating the 10p tax band. It is reported that over 5m families will lose out (Sunday Times 20 April: Institute for Fiscal Studies). The losses are about £2 per week and this is important to a struggling family (and to a struggling government !). Lord Forsyth (Daily Telegraph website 21 April) says that tax allowances should be raised to compensate, thus taking 2.5m families out of paying income tax. This would also keep the simplification of abolishing the 10p band.

A better way would be to take the opportunity of introducing a Citizen’s Income / Basic Income Grant for all. We have this already for families with the Child Benefit payment (£977 - 1st Child p.a., £652 - other children p.a.); the over 60s get a winter fuel payment of £100 per head p.a.

The Citizen’s Income Trust have worked out the practicality of a non-means tested, unconditional payment to every citizen (

The book The Free Lunch – Fairness with Freedom makes this one of its themes and calls it the Citizen’s Royalty. From UK bookshops, Amazon, or e-mail: info@ the

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