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: For some time The Liberal Party advocated a system of tax credits in order to assist people off benefits and into work. The experience of the past few years has highlighted the practical difficulties with such a policy. The Liberal Party recognises that the various tax credit schemes have resulted in horrendous levels of over and under payments. Liberals also recognise that such systems of taxation have raised overall levels of taxation as a result of increased administration. Liberals also recognise that such systems have acted as a disincentive for families working additional hour sand/or undertaking training and/or additional responsibilities. 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.