Habib suggests ‘cutting taxes’ for faster growth to economy
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Ben Habib was addressing a meeting of the Brexit supporting Bruges Group when he called on the Chancellor Rishi Sunak to cut the tax burden on working and middle-class people in order to stimulate growth in the economy. He called for VAT, Council Tax and national insurance to be reduced and described the working and middle classes as the “real spenders” in the economy. The Brexiteer also claimed that putting more money in people’s “back pockets” would achieve much faster growth in the economy following coronavirus.
Mr Habib said: “We need to put more money, money that’s earned not grants, but we need to put more money in the pockets of the working class and middle classes who have actually seen us through this pandemic.
“You do that by cutting taxes which burden them the most which is VAT, National Insurance, taxes on fuel, council tax.
“These are taxes which need to be looked at very carefully.
“The spenders in our economy are the middle and working classes.”
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“If you put more money in their back pockets by cutting those taxes you will get much faster growth in the United Kingdom,” he added.
“You will do what is morally right and you will do what is economically sensible.”
It comes as other urged Mr Sunak urged not to ‘hike’ capital gains tax in next month’s budget.
Ben Beadle, the Chief Executive of the National Residential Landlords Association, said: “Increasing Capital Gains Tax would reduce churn in the rental market undermining the flexibility it has always been good at providing.
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“A tax hike would be a kick in the teeth for all those who have invested in property to provide security for the future for themselves and their families.
“The Chancellor needs to end the war on the rental market and recognise the importance of a healthy and vibrant rented housing sector.
“Tax should be used more smartly, not as a blunt attack on the market.”
In 2020, the Office for Tax Simplification (OTS) proposed measures (following a request from Rishi Sunak) to equalise CGT with income tax rates.
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This was discussed in a report released in November 2020, where the OTS’s extensive consultation revealed a range of areas in which CGT is counter-intuitive and creates odd incentives.
Within this report, some respondents argued that CGT is a barrier to economic growth, others that it is a barrier to a more equitable society.
On top of the income tax proposals, rates and boundaries, annual exempt amounts, interaction with lifetime gifts and Inheritance Tax and business relief were also looked at.
While these proposals were suggested in a bid to equalise public finances and burdens, new warnings have been issued on how the changes could harm the public.
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