It will come as no surprise to anyone that the country's continued expenditure on the impact of Coronavirus cannot continue indefinitely and will need to be paid for. The question at the moment appears to be 'when' those inevitable tax rises will bite.
My question however is should the question also be more centred around 'who' should pay? I commented previously about the potential adverse impact of increasing capital gains tax and reducing the corresponding allowances on PI and Clinical negligence awards and suggested that there might be scope for creative thinking.
Is the time now ripe for more creative thinking about 'who' pays tax at what rates, rather than 'just' the levels of income, earnings etc? Might this incentivise other needs in society e.g. increasing income tax allowances for carers, frontline NHS staff etc - perhaps as a bit of a thank you and also as a bit of an incentive to consider such occupations where numbers of vacancies outstrip the availability of resource?
It would be more difficult to administer at the outset but such wider thinking could assist the country to balance the books without necessarily having to pay out in wages. I appreciate there is still a cost to be borne of reduced tax income from such sources, but could looking at tax policy in a totally new way assist balancing the books with the need to support the economy and 'build back better' - and perhaps more 'fairly'? No doubt there would be much talk about which areas 'deserved' such treatment - and this may change over time - but could be a different way to view tax policy.
With tough choices undoubtedly ahead, I hope that creative thinking will be looked at in an effort to cushion some of the blow and ensure that balancing the books does not stunt the country's wider economic recovery and future.
Chancellor Rishi Sunak is to announce an extra £3bn for the NHS - but has warned that people will soon see an "economic shock laid bare" as the country deals with the Covid pandemic. The one-year funding will be pledged in the Spending Review on Wednesday. But Mr Sunak said Covid's impact on the economy must be paid for - and high levels of borrowing could not go on indefinitely. Borrowing in October hit £22.3bn, with public sector debt over £2 trillion. The NHS usually gets extra money to tide it through the winter months but on a much more modest scale, with £700m in 2014/15 the highest payout of the last 10 years.