Axe personal allowance and pay everyone £48 a week, says thinktank

(Not sure this is the right folder for this)

Radical tax proposal by the New Economics Foundation backed by shadow chancellor

The tax-free personal allowance, which rises to £12,500 in April, should be scrapped and replaced with a flat payment of £48 a week for every adult, according to radical proposals welcomed by shadow chancellor John McDonnell.

The proposal, from the New Economics Foundation thinktank, is for a £48.08 “weekly national allowance,” amounting to £2,500.16 a year from the state, paid to every adult over the age of 18 earning less than £125,000 a year. The cash would not replace benefits and would not depend on employment.

The policy idea has been welcomed by the shadow chancellor, John McDonnell, and the Green MP Caroline Lucas, and would mean that as many as 88% of all adults would see their post-tax income rise or stay the same, helping to lift 200,000 families across the country out of poverty.

https://www.theguardian.com/politics/2019/mar/11/scrap-tax-free-personal-allowance-and-pay-everyone-48-a-week

Very interesting idea.

The downside is that employers could see it as a wage subsidy, like WTC, and use it to pay less. It would then benefit the industry more than the recipient.

Abolishing the tax free allowance would mean that we pay more tax though, by the look of it. I personally think the tax allowance should be higher to take more poor people out of tax liability altogether.