Via MBK, from The Times:
Income tax and national insurance will be merged under plans being lined up as a key element of the next Conservative manifesto. George Osborne came “within a whisker” of implementing the plan in the budget and is now looking again at the policy for the general election...
There are fears, however, that the move, which would involve merging two computer systems, could cause another Whitehall IT disaster and lead to problems similar to those that have beset universal credit. Concerns over the software caused Mr Osborne to pull back from an announcement in April, according to informed sources.
There is no need to merge both systems; you just hike the basic rate of income tax to 32%, the higher rate to 42% and the additional rate to 47%, then you can shut down the parallel NI system entirely - Employer contributions don't go towards your "payment record" anyway.
Clearly, pensioners, landlords and people with savings income will be moaning about having their basic rate of tax increased, in which case you either tell them to put up or shut up (at least there is no Employer's NIC on those sources of income!) or you continue taxing them at the lower 20% rate (dividends remaining tax free for basic rate taxpayers).
Or, if you want to keep bureaucrats in work running two parallel systems, you could hike Employee's NI to 32%, 42% and 47% respectively and exempt their income from income tax, it comes to the same thing.
More promisingly, from City AM:
MERGING incomes tax and national insurance could be supported by the public, according to work announced today by PwC.
The firm arranged for a jury of 22 representative members of the public to discuss taxation for two days, and the group expressed support for the idea of merging the two taxes on income...
The focus group also indicated support for higher bands of council tax, along with the abolition of inheritance tax.
Amen to that.
Annual taxes on the value of land and buildings = good; taxes on transfers (Inheritance Tax or for that matter Stamp Duty Land Tax, Capital Gains Tax) = bad.
They still don't realize that VAT is the worst of both worlds: a tax on income/output and a tax on transfers, but hey.
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