3 December 2012...from George Osborne is eagerly awaited and speculated upon.
But what should he say rather that what might he say?
He should announce a new top rate of tax, 35p (making it 37p when NI is added in), in order to increase HMRC revenues from high earners. I have said many times that high rates of tax do not increase revenues.
He should also bring in a £10,500 nil rate band for income tax - applicable to everyone.
He should announce that these changes are a move towards tax simplification with the aim, within 5 years, to have a single rate of tax set at 30p for everyone earning over £12,500 pa with National Insurance abolished.
He should announce a 5 year freeze of benefit payments with only the State Pension excluded from that.
He should announce that tax credits will be phased out over 5 years.
He should announce a single annual allowance for tax free savings of £60,000 p.a. with people being able to split it between pension and ISA as they see fit but with tax relief only on what is paid into a pension. Cash ISA limit should be set at 10% of the total annual allowance (£6,000). The allowance dropping to £15,000 for ISA only at age 75. Dividend tax credits at 10% to be restored to pensions and ISAs in 6 years time.
These measures will increase tax revenues, boost growth and cut spending sufficiently to get rid of the deficit by 2016 while helping towards reducing the size of 'the state' to a more manageable and sustainable level.
I will not hold my breath though.
Spending and Growth are runners in the same race, it is high time he backed one or other of them. Your focus on Independent Financial matters is understandable Barry, but less so coming from a Politician. Jam Tomorrow, requires some sign of bread and butter today.