Monday, 16 September 2013

LDs want 45p to stay - just

The motion on Fairer Taxes passed as follows:

Conference believes that in a fair society, government has a duty to help the least well off to get on and to
ensure that everyone pays their fair share
Conference believes that taxation policy has a crucial role to play in building a fairer society, promoting
prosperity and protecting the environment, and that the tax system itself should be simpler, and endorses
policy paper 111, Fairer Taxes, as a statement of Liberal Democrat tax policy to help achieve this.
Conference believes:

1. Government should cut tax for those earning low and middle incomes, through:
a) Raising the income tax threshold to £10,000, taking 2.7 million people out of paying income
tax altogether, and giving a tax cut of £700 to many million others, now delivered by Liberal
Democrats in government.
b) Further raising the income tax threshold to the level equivalent to a full time job on the National
Minimum Wage (NMW), and index-linking it to further rises in the NMW, ensuring that no-one
earning the minimum wage pays income tax on a standard full-time salary, and giving a tax cut of
up to £460 to millions of other workers.

2. The wealthiest should pay their fair share, through:
a) A Mansion Tax, applicable at 1% on the excess value of a residential property over £2 million.
b) Lifetime tax relief for pensions being limited to a pension pot of £1 million.
c) Non-dom tax status being more tightly restricted, and prevented from becoming hereditary.

3. Wealthy individuals and companies should no longer be able to see paying tax as optional, through:
a) Liberal Democrat-led efforts within government to crack down on tax avoidance, including both
international efforts and the introduction of a General Anti-Abuse Rule in the UK.
b) The introduction of a stronger General Anti-Avoidance Rule, supported by a straightforward preclearance system, which would outlaw any move taken purely to avoid tax in ways not intended by
c) Continuing to invest in HMRC’s ability to tackle avoidance, which has demonstrated a good return
on investment, and in international efforts to co-ordinate anti-avoidance.
d) Tackling tax avoidance by multinational companies, especially in developing countries, by requiring
greater transparency of their tax arrangements, including country by country reporting.

4. The tax system should be simplified by:
a) Making personal tax returns simpler by HMRC pre-populating them based on information they
hold, and make contacting HMRC much more straightforward.
b) Continuing to simplify tax rules by limiting specific reliefs, and ensuring that they have ‘sunset
c) Renewing the mandate of the Office of Tax Simplification.

5. Taxation should focus on wealth rather than income, through:
a) Supporting the introduction of a system of land value taxation.
b) Moving back to a system in which capital gains are taxed at the same level as income, rather than
at a lower rate.
c) Maintaining the existing rates of income tax, including the additional rate of 45% for income over
£150,000 per year.

6. Businesses and especially small businesses should be supported, through:
a) The reduction of corporation tax by the Government to a historically low level, which has helped to
stimulate business and is attractive to international investors.
b) Introducing a range of financial and non-financial measures to help small businesses, including
simplifying tax administration.

7. Control of taxation should be devolved further to nations, through:
a) Devolving power overs a range of taxes to the Welsh Assembly, in line with the recommendations
made by the Silk Commission.
b) Supporting a move towards Fiscal Federalism for Scotland, including further transfer of tax
powers as set out in the Scottish Liberal Democrats policy paper ‘Federalism: the best future for

8. The tax system should promote environmental sustainability, by:
a) Continuing to push for reform of the EU emissions trading scheme (EUETS) so that it drives
improved energy efficiency.
b) Further promoting more energy efficient homes by lowering the rate of VAT for home renovations
which increase the energy efficiency rating.
c) Linking Vehicle Exercise Duty bandings to EU emissions targets to improve energy efficiency.
d) Continuing to push for reform of taxation of international aviation to change Air Passenger Duty to
a Per-Plane Duty.
e) Providing ISA allowances for investments into enterprises with environmental and/or technological

Conference, by a slender majority, rejected an alternative to 5(c):
Option B:
c) Maintaining the existing rates of income tax, apart from the additional rate for income over
£150,000, which should rise to 50%, subject to an independent review concluding that the
additional income from this change would be likely (on the balance of probabilities) to exceed the
costs of introducing it.

There was considerable discussion about the practicality of implementing the Mansion Tax. As a new tax, setting up the machinery to collect it would be expensive. In the end, Vince Cable persuaded conference that the party should stick to its resolve to shift taxation from income to wealth.

I was rather surprised that the opportunity was not taken to send a message to the Conservatives over the married persons tax allowance in this amendment:

 After 8. e) (line 67), add: Conference believes that the proposed marriage tax allowance, that would give certain types of married couples a tax break, is discriminatory, unnecessary and expensive. Conference therefore resolves to oppose the proposed marriage tax allowance, and if it is implemented to repeal it at the earliest opportunity.

Again, the vote was close but not as close as on the 50p rate.

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