Andy Burnham urged to scrap income tax and NI in radical fiscal overhaul
Summary
Leading economists are urging Andy Burnham, expected to become UK prime minister soon, to make big changes to the tax system and public services. They propose replacing several current taxes with one national tax on all income and using the money to fund universal public services like free school lunches and bus rides.Key Facts
- Economists including Jim O’Neill and Jonathan Portes wrote an open letter calling for radical tax and spending reform in the UK.
- The country spends £100 billion per year on debt interest, more than on defense and half of the NHS budget.
- The Prosperity 2030 report suggests replacing six taxes—including income tax and national insurance—with one levy on all income types.
- This new tax system could raise an extra £75 billion annually within five years, depending on the rate set.
- The report proposes spending the new revenue on universal services such as free bus service and free primary school lunches.
- It recommends scrapping stamp duty and council tax and replacing them with a 1% national property levy given to local authorities.
- Andy Burnham is expected to become Labour leader on 17 July and prime minister on 20 July.
- Ed Miliband is considered a likely choice for Burnham’s chancellor, and Jim O’Neill might advise the new government.
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