Tax increases in Britain seem inevitable if we are to avoid going bust. There is no magic tax button to push. You either tax consumption or you tax income.
Within those broad descriptions a Capital Gain is unearned income. Taxing consumption is regressive , taxing income is progressive. So any government favouring redistribution will favour taxing income. For me there is no moral distinction between earned income and unearned income so making a tax level distinction as a sort of reward for work as opposed to good investment I object to. The tax system needs simplifying within the fairness criterion of the more you earn, however you earn it, the more you pay in tax.
There needs to be more subtlety to consumption taxes. Some purchases are essentials and in the main should be untaxed, or lightly taxed. Luxuries should attract higher rates of VAT/Sales Tax – as once they did of course. Yes there are challenges in defining what are necessities and what luxuries but common sense should cover the majority of cases. Fuel Duty is a consumption tax – it hasn’t changed for eight years. Despite my oily career and oil-funded retirement I believe it should be increased substantially. In Britain, a few exceptions aside, we do not charge for use of our motorways. The benefit of Fuel Duty is that the more you use our roads the more you pay. Seems fair !
Increasing Fuel Duty is always politically dangerous – ask Tony Blair – and I very much doubt that our present Government has the balls to do it. But it makes sense – it encourages the purchase and use of more efficient and environmentally friendly vehicles and switching to public transport. I’m making my own small contribution to this at the moment leaving my car on the drive. Mind you this is a result of my epilepsy diagnosis and treatment! I won’t be able to drive again until April next year at the earliest. I haven’t missed it one bit!!