Letter: Seeking a solution to the problem of taxation and how to make it 'fairer'

Governments and local authorities need money to provide the services they are intended to provide.

They don’t accept payment in kind - sacks of potatoes, crates of fish, hours of labour, land, buildings, company shares etc. They need credit units - £s, Ɛs, $s - cash.

The only sources of cash, from which tax or borrowing can/could be taken, are transactionary profits and incomes, and savings derived from profits and incomes.

Lifetime taxation of already taxed savings would be strongly resisted. If imposed, it could trigger profligate spending leading to inflation.

Inherited cash savings, if taxed, should more fairly be taxed as income received by the beneficiary rather than, at present, as a tax on the deceased’s already taxed estate.

Tax on the notional transactional value of property, company shares or other non-cash assets (in life or on death) can only be paid from income or savings, and bears no relationship to the taxed person’s ability to pay.

Sale of all or part of the asset to raise cash to pay the tax incurs an additional tax on the income from the sale transaction.

Similarly, council tax, stamp duty, insurance premium tax, purchase tax, vehicle excise duty, value added tax etc bear no relationship to ability to pay, and bear heaviest on the least able to pay.

VAT is particularly insidious as real added value has already been taxed as income or profit at each previous transaction.

Savings could be borrowed by the government but would have to be repaid, with interest, by taxation.

Borrowing should be restricted to borrowing within the state to reduce the bleeding of money from the state.

The operation of foreign companies that bleed more profit from the economy than they contribute in wages purchases and tax should not be permitted.

As all tax is paid ultimately, in cash, from income or profit, it would surely be simpler, fairer and more transparent to abolish all forms of taxation other than tax on profit and income, including encashed indexed capital gains.

To ensure that the tax rate on company profits is no less than that charged on personal income above a basic minimum personal income, a single percentage across all profits and incomes would seem appropriate.

The more able would pay more, and foreign shareholders would contribute fairly to the government’s budget via the tax on company profits.

If taxation cannot raise sufficient cash for the government's needs, or to reduce the tax burden, the government should earn cash by operating efficient and profitable state-owned public utilities and other appropriate businesses instead of reaping only the tax from the profits of the same companies in private ownership, some or all of which are subsidised from taxation. Dennis Golden, Strabane