Title: Taxation – The Liberal Party
Headings: The Tax Credit System
Taxation
The Tax Credit System
Taxes and Tax Rates
Inheritance Tax and Universal Inheritance
Other Measures

Content: In view of these difficulties The Liberal Party calls for a tax system which is both simple and reduces the burden of taxation. Liberals therefore advocated a tax system where all earnings under £10,000 are tax free and thus the need for compensatory tax credits and other forms of benefit is reduced, and that this should be balanced by increasing the rate of taxation to 50% for earnings over £100,000 of taxable income. Inheritance Tax and Universal Inheritance
Liberals call for the wider spread of private ownership of wealth, as demanded by the constitution of the Liberal Party, to give greater equality of opportunity for all and to help make poverty history, both in the UK and internationally. The Liberal Party believes that the current scheme of Baby Bonds is basically a Savings Incentives Scheme for the wealthy and middle classes and that they are deeply flawed from the point of view of ‘Opportunity for All’ by not being part of a reform of the exemption ridden 40 per cent Estate Duty type Inheritance Tax. Liberals believe that the only way to ensure wealth ownership for al UK -born citizens is to give it to them as a British Universal Inheritance at a financially responsible age and then to claw it back from those who do not need it, and to finance it by a progressive tax, starting at a marginal 10 per cent instead of the present 40 per cent, and remaining at 10 per cent for most beneficiaries, on cumulative lifetime receipt of the payment itself and of all other capital gifts and inheritance. The Liberal Party, therefore, noting that the average wealth of every adult and child in the UK at the end of 2002, according to the Office of National Statistics, was £85,000, calls for a £10,000 British Universal Inheritance to be paid to all UK – born citizens at the age of 25, to be clawed back by a marginal 10 per cent tax from a further £90,000 of capital gifts and inheritance received from other sources, thereby giving a net personal tax free lifetime allowance, above which progressive inheritance tax rates above 10 percent would start to apply. Capitalist democracies already have universal suffrage – votes for all. Universal Inheritance – capital for all- is also required, to spread more widely the private ownership of wealth in each new generation. Other Measures
VAT, like most taxes on spending, tends to be regressive. The Liberal Party therefore finds merit in a higher rate of VAT for luxury items and extension of the zero rate.