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| Tory group urges £21bn tax cuts | Tory group urges £21bn tax cuts |
| (about 1 hour later) | |
| The tax system should be radically simplified, offering cuts worth up to £21bn, a Conservative policy group is to recommend. | |
| The Tax Reform Commission, set up to advise the Tories, proposes cuts in personal and business taxes - including reducing basic income tax to 20%. | |
| The shadow chancellor said they would accept some ideas and reject others. | |
| Labour said it showed the Tories would take risks with the economy, the Lib Dems said they were "confused" on tax. | |
| The commission's report, due to be published on Thursday, will say the current tax system is too complex, unfair and unstable. | |
| Some we will accept, some we will modify, and others we may reject George OsborneShadow chancellor Back to the old tax row | Some we will accept, some we will modify, and others we may reject George OsborneShadow chancellor Back to the old tax row |
| It wants to reduce the basic income tax rate from 22% to 20% and remove 2.5 million low earners from paying tax. | |
| The earnings threshold, below which people do not pay income tax, would increase from £5,035 to £7,185. | |
| The commission also backs abolishing stamp duty on shares and cutting business taxes in its report. | |
| And it recommends abolishing inheritance tax and replacing it with a "capital gains tax on death", which would not be levied on family homes. | |
| The main corporation tax rate would be lower and more "competitive internationally", the report adds. | The main corporation tax rate would be lower and more "competitive internationally", the report adds. |
| The commission was set up to advise the Conservative Party on tax policy, but its recommendations are "far from official Tory policy", said BBC economics editor Evan Davies. | |
| 'Hole in finances' | |
| Tory leader David Cameron has said he will not promise tax cuts unless they can be paid for and said economic stability should be the priority. | |
| On Wednesday Shadow Chancellor George Osborne said: "The commission has given us a menu of options that merit serious consideration. | |
| "Some we will accept, some we will modify, and others we may reject. But the framework of our tax policy is now set." | |
| Ed Balls, the economic secretary to the Treasury, said the proposed tax cuts would not help ordinary families and would leave a black hole in the public finances. | Ed Balls, the economic secretary to the Treasury, said the proposed tax cuts would not help ordinary families and would leave a black hole in the public finances. |
| He added: "The scale of the tax cuts is huge. The problem is there is no indication here at all as to how it will be paid for. | He added: "The scale of the tax cuts is huge. The problem is there is no indication here at all as to how it will be paid for. |
| HAVE YOUR SAY I'd rather see our taxes being spent wisely than pay lower taxes Mustafa Yorumcu, London Send us your comments | |
| "David Cameron has denied he would cut public spending. The hole in the finances that this would create is dangerous for the economy." | "David Cameron has denied he would cut public spending. The hole in the finances that this would create is dangerous for the economy." |
| And Vince Cable, for the Lib Dems, said: "It is utterly irresponsible to present plans for swingeing tax cuts without saying who would pay for them." | And Vince Cable, for the Lib Dems, said: "It is utterly irresponsible to present plans for swingeing tax cuts without saying who would pay for them." |
| He said the Tories' approach to tax was "totally confused" accusing them of changing "from week to week, depending on the audience". | He said the Tories' approach to tax was "totally confused" accusing them of changing "from week to week, depending on the audience". |
| The commission has not looked at council tax or VAT, the report, obtained by the BBC, makes clear. | The commission has not looked at council tax or VAT, the report, obtained by the BBC, makes clear. |
| There is also no mention of "green taxes", which Mr Cameron has indicated he favours. | |
| It says: "Tax reform can work. The economies of other countries have benefited greatly from similar programmes of reform." | It says: "Tax reform can work. The economies of other countries have benefited greatly from similar programmes of reform." |
| There had been reports that the commission, chaired by Lord Forsyth, had come under pressure from the shadow chancellor to water down its proposals. | |