Prem Sikka has put forward a few progressive-oriented ideas for the Chancellor to deliver in her much anticipated/dreaded budget due to drop in the UK this coming week.

The whole thing has, so far, been a real mess. And the way things are going, sadly I’m not so sure “progressive” is the vibe they’ll go for. But it’s nice that someone associated with Labour is thinking about these things. We can but hope.

To summarise:

  • An end to the 2-child benefit cap.
  • Abolishing VAT on domestic fuel.
  • Increasing the tax free personal income tax allowance.
  • Stopping the payment of interest on commercial banks' central bank reserves (I hadn’t actually realised this was a relatively new thing, and that other EU countries have already moved away from it)
  • Borrow more to invest - which ends up being much cheaper than e.g. using Public Finance Initiatives.
  • Increase the capital gains tax rates to the same rate that we already pay on wages, potentially even adding national insurance to the mix.
  • Likewise tax dividends the same way as we do income, potentially adding NI too.
  • You could even charge higher rates of tax on passive or wealth-based income - this has existed in the past called the “investment income surcharge”.
  • Restrict the rate of tax relief on pension contributions to 20%.
  • Make people paid as “partners” - e.g. at a law firm - pay national insurance, the same as the rest of us workers do.
  • Reform council tax so that the very wealthy pay more. Apparently the council tax on a home worth £32 million is the same as that on one worth £320k today, which seems…suboptimal.
  • Increase the take from corporation tax - perhaps by removing the exemptions and allowances that are abused as well as considering changing the rate.

Some of these might not be entirely as redistributive as I’d prefer. For example, increasing the personal income tax allowance may well benefit the at-least-moderately-rich more than the poorer folk. But the general idea behind the article seems to be to suggest a set of policies that do not necessarily break Labour’s (likely foolish) manifesto promises on not raising the major taxes, and do not hit the wallets of the poorer half of the population as such. He also suggests that aligning taxes on wealth with those on wages could also reduce tax avoidance.