MP’s column: Time to make tax rates fairer

John Penrose (Conservatives. Picture: MARK ATHERTON

John Penrose (Conservatives. Picture: MARK ATHERTON - Credit: Archant

A few months ago, most of us would have guessed Zoom was a high-caffeine macchiato coffee. Since lockdown, we’ve all become experts in using it for pub quizzes, virtual drinks with friends and work meetings too.

But Parliament? The stuffy, tradition-bound place with processions and men wearing swords and tights? Really?

Well, yes. And last Monday I became one of the first MPs to speak digitally in a debate on a new law.

It was the finance bill, which puts the Chancellor’s budget into law. And I wanted to point out an uncomfortable truth that, since the lockdown, we have seen better-paid, white-collar professionals working from home, while less well-off key-workers kept travelling to work in riskier jobs where they need PPE.

But those less well-off key workers are paying much higher tax rates than the safer, better-off white-collar professionals.

It’s a quirk in the system, because of lower taxes on the interest and dividends that richer folk get, and the way benefits are taken back as lower-paid people earn more.

But the result it really unfair. It means the haves are being subsidised by the have-nots.

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That can’t be right. Bosses should not pay lower tax rates than the people who clean their offices or drive the trucks that deliver their goods.

So I was asking the Chancellor to tax all income the same, whether it comes from benefits, work or wealth. It would not just be fairer; it would make our economy work better too.

We would have the same clear, strong incentives to work for everybody, not just for the rich.

Taxes would be simpler and harder to dodge. And it would reduce in-work poverty, because less well-off families will keep more of any extra money they earn.

So that is what I told the Chancellor. But whether it was better done virtually or in person, only time will tell.