‘Janan Ganesh calls on George Osborne to use this week’s Budget to tackle the “perversity” of the current tax system. At present, he says, the tax system favours assets, including those bequeathed, over earned income. The absurdities of the system would be worsened, he suggests, if the chancellor lifts the threshold for IHT.
Elsewhere, the Times’ Matt Ridley warns that cutting IHT will result in further complication of the “already horrendously complicated” tax system. He highlights the fact that the UK’s complete tax code now runs to 21,000 pages and ten million words. “A complex tax code plays into the hands of the rich, creates overemployment among expensive tax accountants and distorts incentives,” he adds. The paper also carries a number of letters from readers debating the merits of the chancellor’s IHT proposals.
Source: The Times, Financial Times‘
It’s always seemed to us that NIC is the most perverse of all taxes. Employers’ NIC is nothing more or less than a tax on employing people, which is just bizarre when you consider that employing people is about the last thing (other than the Eurovision Song Contest) that any sane person would want to discourage. And employees’ NIC is simply a way of ensuring that wage slaves and others who live by the sweat of their brows have the privilege of paying a higher rate of tax on their income than people who live off the return from their investments.