When I'm moaning about tax, people often say, "Well, would it be any better under the Conservatives?" My normal response is, "Yes, but probably not by much – at least initially." That's not exactly a precise answer, so I thought it would be worth having a closer look and working out just what the Tories' tax policies are.
The general point is that they are not promising any up-front tax cuts that aren't balanced by corresponding rises elsewhere. There seem to be two reasons for this: firstly, they don't want Labour to be able to say they're going to 'cut services'; secondly, they're worried that by the time they get into power, the country's finances will be in such a bad state that any promises made now could turn out to be undeliverable.
However, the Conservatives are committed to sharing the increased tax proceeds of economic growth between higher spending on services and lower taxes. That's a bit mealy-mouthed, but over the course of a parliament or two, such a policy could significantly reduce the tax burden as a percentage of GDP.
There are some specific commitments. The inheritance tax threshold would be raised to £1m. Stamp duty on homes under £250K would be abolished for first-time buyers. Stamp duty on shares would be abolished. The main corporation tax rate would be reduced to 25%, and the small business rate would be kept at 20% instead of rising to 22%. The couples' penalty* in the tax credit system would be eliminated by raising the working tax credit for couples with children. There would also be a tax cut for families, probably in the form of a transferable tax allowance for married couples with a child aged five or under. [Click 'read more' to continue]