Funding the abolition of Income Tax

It is Libertarian Party policy to abolish Income Tax.

How can this be done? What can be cut?

Firstly, let’s find out what people earn, and how much tax they pay. Purely as a matter of interest.

http://www.statistics.gov.uk/StatBase/P … vlnk=15050
2007 Annual survey of Hours and Earnings (ASHE) Table 1.1a gives mean and median averages.

http://www.berr.gov.uk/employment/pay/n … index.html
(£5.73/hour from 1st October 2008

pay…………………………….tax..week……..month…….year
min wage £11,918…………….24.93……..108.05……1296.60
median ave £19,494………….54.07………234.32……2811.80
mean ave £23,504……………69.50………301.15……3613.80
higher rate £36,001…………117.56………509.43……6113.20

So what can we scrap?

1.Dept for International Development
2006/7 Budget £4,923mn, also £1,867mn in non-DFID debt relief and £698mn in other non-DFID debt relief. http://www.dfid.gov.uk/pubs/files/sid2007/section2.asp
2006/7 DFID admin budget £234mn http://www.dfid.gov.uk/aboutdfid/statistics.asp
DFID assets £2,596mn
I think it’s reasonable to include the non-DFID debt relief as it shows the voters just how much this sort of thing costs them.
The whole Dept can easily be scrapped. Interestingly, less that 10 % of their budget is for humanitarian relief (ie starving people)

2.Foreign and Commonwealth Office.
2006/7 Budget £1,800mn? assets core dept £1,254mn
British Council budget £200mn assets £110mn
BBC World Service budget £200mn assets £155mn
Scrap the British Council and BBC World Service. These figures need to be checked.
Will we keep the FO? Staffing levels are 6,000 UK citizens and 10,000 foreigners in 260 locations, could this be cut. I have only included the BC and WS in the figures below.

3.Dept for Business Enterprise & Regulatory Reform
2006/7 Budget £10,200mn, assets £7,469mn
http://www.berr.gov.uk/about/strategy-o … 40577.html
List of quangos for this Dept
http://www.berr.gov.uk/about/strategy-o … 40391.html
This can be scrapped entirely apart from the organisations below whom I have left out of the figures above.
Nuclear Decommisioning Auth
UK Atomic Energy Auth
British Energy Group
British Nuclear Fuels
We will need a policy on nuclear power, or will we leave it to the market?

4.Dept Culture Media and Sport
http://www.culture.gov.uk/Reference_lib … r_2007.htm
2006/7 budget £4,717mn (Excludes National Lottery) assets £4,412mn
Another dept that can be scrapped completely.
The BBC isn’t included in these figures as it is funded by the Television tax, which is something else we can scrap.

5.Dept for Communities and Local Gov
http://www.communities.gov.uk/publicati … l-report07
2007/8 budget £10,438mn (Excluding local gov funding £23,764mn) assets £432mn
Assume central gov will still partly fund local gov?

6.Dept for Children Schools and Families
http://www.dfes.gov.uk/aboutus/reports/index.shtml#ydr
2007/8 budget £78,510mn assets £202mn
Another department to be scrapped. Fund children direct from the treasury with education vouchers [1].

7.Dept for Transport
2007/8 budgets
Highways Agency (new roadbuilding only) £4,122mn
Rail Subsidies £4,417mn
Bus subsidies £478mn
Local Transport Funding £1,930mn
Transport for London £2,554mn
This is what we could get rid of from this dept and leave intact the maintainance side of the Highways Agency and various accident investigation units and DVLC, DVO etc.

8.Dept Innovation Universities and Skills
2007/8 Science budget £3,382mn assets £1,166mn
Higher Education Funding Councils
2007/8 budget England £5,788mn
2007/8 budget Scotland £1,600mn
2007/8 budget Wales £276mn
2007/8 budget Learning and Skills Council £3,063mn assets £82mn
This can be scrapped as well.

9.Dept for Environment, Food and Rural Affairs.
http://www.defra.gov.uk/corporate/deprep/default.htm
2006/7
Keep Environmental Protection budget £1950mn?
Scrap Animal Health and Welfare, Sustainable Farming Food and Fisheries, Natural Reasources and Rural affairs, Rural Payments Agency, Dept Core, Budget £2076mn
Assets £2,418mn
We may well need to keep the Environment Agency, are they responsible for water quality? What else do they do? I haven’t included them in the figures below.

10. Tax Cedits 2007/8 £14,758mn
http://www.hmtreasury.gov.uk/economic_d … pesa07.cfm
With no Income Tax this becomes unnecessary.

11.Student Loans £3,710mn
http://www.hmtreasury.gov.uk/economic_d … pesa07.cfm
If we stop subsidising students or directly fund their education this is unnecessary.

12. EU contribution £14,600mn (gross)
We will be leaving the EU.

Total budget £171,951mn Total assets£19,042mn

[1] Education vouchers
But how much would all this cost?
Well, firstly, lets assume we do introduce education vouchers.
Secondly, that the vouchers are worth £4500 per pupil to age 18.
There are about 10.8mn kids aged 5-18 so thats about £48.6bn.
Add a generous .5bn for admin gives £49.1bn.

(Every County Council will have a Section 52 Education budget. I have looked at two of these, Cambs (where I live) and Oxfordshire (Thinking about the Henley BE).
The Section 52 will have a Dedicated Schools Grant (Cambs 3,600, Oxford 3,700) and also School Standards Grant, School Development Grant, Other Standards Fund Grant, LEA Contribution and LSC funding (which brings Cambs to 4,300, Oxford to 4,500). All figures 07/08.)

Hence, £171,951 – £49,100 (cost of education vouchers) = £122,851mn saving.

OK we need to find another £30bn of savings, anybody got any ideas.

Isn’t it surprising just how much fat there is on govt spending.