Smart tax, smart benefit - courtesy of World2Rights

Benefit Reform

1. Men and women have independent taxation; our aim is that benefit entitlement should also be calculated on an individual basis. (Each individual claimant will have to satisfy any availability for work tests and will have to declare payments or significant gifts-in-kind from their partners.)

2. Minimum housing allowance. Throughout the tax and benefit system this would make an allowance for a minimum living space for every adult and child. In some instances living in an unusually large house could affect benefit entitlements.

3. Provided that the size of an individual’s home is not excessive compared to his or her needs, there will be a much more generous disregard of savings in all benefit calculations. The Pension Credit will be reformed to assume a more realistic rate of interest on savings.

4. Housing benefit will be reformed to remove poverty traps and to pay flat-rate local housing allowances reflecting local market prices.

5. Incapacity benefit will be dependent on availability for work - availability for all those categories of work not ruled out by an individual's particular incapacity. Our aim should be to find suitable work for as many people as possible. Repeat sign-off for long term sickness benefit should be undertaken by an independent doctor (not the normal family doctor).

6. Low income pensioners and those in most need will be pro-actively targeted by the pension credit office. Council tax benefit applications will be processed automatically along with Pension Credit applications.

Council Tax

1. There will be more bands for the Council Tax and they will be updated to reflect current property prices.

2. A local income tax, over and above income tax and national insurance, is not supported. If the marginal rates of income tax are already optimised then a local income tax (or a graduate tax) can only detract from that optimisation. Replacing the Council Tax with more income tax would merely narrow the tax base.

3. The Council Tax will be reduced by imposing a "reverse poll tax" on those who fail to vote in any two consecutive elections#. This will be collected nationally so that no council has an interest in seeing low turnout in their local area. # Our plan is that voting will be made compulsory - it is a democratic duty and not just a right.

Income Tax

1. Our aim is that 45% should be the maximum effective marginal tax rate across the tax and benefit systems.

2. The 55% deal. Any person, whatever their income, who earns an extra £100 will have a statutory right to retain a minimum of £55 - after income tax, national insurance and any adjustment of means-tested and housing benefits. If this is not achieved for any reason, an individual will be able to claim a rebate from the Inland Revenue.

3. There will be a limit to tax allowances for high income individuals; they will be required to pay some minimum proportion of their income in tax, regardless of tax allowances.

Maternity and Paternity Leave

1. Partners will be able to split maternity and paternity leave between them. Each partner will be required to take some minimum proportion of the available leave. Consequently, it will become the norm for all fathers to take more than just a couple of weeks' leave. This will benefit children, fathers and families, and it will help eliminate gender inequality in the workplace. Single parents, living alone, will not be required to split their leave.

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