New Communist Party of Britain
This is just one section of the Main Political Resolution adopted at the 2009 16th Congress of the New Communist Party of Britain.
An index to the other sections can be found here -> [2009 Policy Documents]
For over 30 years under the Conservatives and under Labour, public spending has been cut. Vital services like the National Health Service, public transport, education and local amenities have all become seriously under−funded.
Taxation is the way essential services, such as education, the health service and pensions, should be funded. Of the £451 billion of Government revenue, in 2007/2008, income tax was £147 billion, national insurance £100 billion, value added tax (VAT) and other excise duties and levies raised £154 billion and council tax raised a further £23 billion. Taxes on business amounted to only £50 billion.Almost a third of the Britain’s 700 biggest businesses paid no corporation tax in the 2005−06 financial year. J Sainsbury, the supermarket group, in 2005−06, received a tax credit of £3 million and in 2006−07 a further £9 million. It is these businesses and those fat cats that enjoy the profits of control; who have benefited most from an educated and healthy workforce, who pay the very least towards the education and the health services.
For years both Tory and Labour governments have clamoured for lower income tax. In 1979 there were nine higher rate bands, ranging from 40 per cent to 83 per cent with an extra 15 per cent for those with very high investment income; by 1989 the Tories had reduced this to just one rate of 40 per cent.
Although VAT was cut from 17.5 to 15 per cent in November 2008 it is still a severely regressive tax. In fact the cut in VAT was a reduction in taxation for the rich. The bulk of expenditure by workers on low incomes is on food, electricity, gas, insurance and children’s clothing, which are all either VAT exempt or already on a reduced rate. It is these costs that bear more heavily on ordinary workers and who therefore benefited the least from the cut in VAT.
The NCP maintains that the burden of taxation should be shifted away from workers and onto the wealthy. The Party is opposed to all indirect and regressive taxes.
To ensure an increase in the disposable income of the working class — to provide free education for all, a health service free at the point of delivery and a pension at two thirds median wage — a fundamental change in taxation is required. That change is:
PAYE personal allowances to be increased substantially. This would exempt a greater number of lower−paid from paying any income tax.
The employees’ upper earnings limit for National Insurance (NI) should be abolished. Employers’ NI should be raised from 12.8 per cent to 20 per cent. The contracting out of NI should be abolished.
New PAYE Tax bands, starting at £50,000 and in £10,000 increments to be introduced at 50, 60, 70, 80, 90 per cent and for those with incomes over £100,000 a 98 per cent tax rate. If allowances were doubled someone with an income of £110,000 would still get, after tax and NI, at least £47,000 whereas someone with an income of £30,000 would see their take−home pay increase by more than £1,600.
The removal of all tax relief on pension fund contributions.
The removal of all tax on domestic fuel.
The abolition of VAT on all goods and services.
Taxes on insurance to be withdrawn.
Council tax should be reduced to its 2001, level pending its further reduction at a later date. In compensation the central government grant to local authorities should be substantially increased.
The Corporation Tax allowance for the main rate be reduced to £1 million, (currently £1.5 million). This will bring in more companies into this tax band.
The Main Rate of Corporation Tax should be increased from 30 per cent to 60 per cent. New Corporation Tax bands, of £500,000 increments from the proposed main rate tax band of 60 per cent, to be introduced at 70, 80, 90 and 98 per cent.
A tax exemption threshold of £500 per annum of interest from savings received from bank, building society, share dividends and credit.
The tax exemption limit for capital gains tax should be abolished and capital gains should be treated as unearned income.
The rich have plenty. They must pay. The working class can be mobilised to fight for the restoration of state welfare to at least the levels that existed in 1979. Even though the Labour government, by increasing the top rate of tax to 50 per cent, has moved in the right direction it is still not enough. Our demands for a progressive tax system can be achieved as workers in increasing numbers want it to be done. The TUC has called for increased taxation for those earning more than £100,000 and an FT/Harris poll in May 2008 found that 74 per cent thought that those on low incomes should be taxed less and another poll a year earlier found that nearly 60 per cent of those polled thought corporate directors should be taxed more. Making the rich disgorge a fraction of the wealth they extort from the working class every year will go some way to reverse the destruction of social provision that has taken place since 1979.
However, the ruling class won’t give up their wealth voluntarily and they will seek ways to reverse any tax increases, or at least offset them. So the only guarantee that workers have to ensure that all the wealth generated by workers is used for the benefit of workers is to overthrow the ruling class and take control of the state.