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Tory commission proposes £21bn cut in taxes

The Tory Tax Reform Commission is recommending a £21bn cut in taxes, including scrapping IHT on primary residen-ces and slashing corporation tax levels.

Head of the commission Lord Forsyth told an audience at KPMG’s headquarters last week that the proposals are realistic and set in place ref-orms that would result in a “simpler, lower, flatter, fairer and more stable tax system”.

Responding to the commission’s report, Shadow Chancellor George Osborne said he hopes the menu of proposals starts a major political debate about making taxes simple, fair and competitive.

Osborne repeated his mantra of not promising tax cuts but emphasised the Tory focus on rebalancing the current tax system – on a neutral basis – in the lead-up to a general election.

He said such rebalancing would reduce the taxes hitting families while increasing green taxes although he acknowledged concerns that such taxes potentially hit the poorest hardest. Osborne said there was a strong case for a major simplification of business taxes that would then pay for a “significant” reduction in business tax rates.

He said he has asked PriceWaterhouseCoopers to conduct a detailed technical study of how proposals on simpler business taxes could be put into practice.

Osbourne said more work would be done to assess the potential benefit to Britain’s financial services and pension funds in reducing or abolishing stamp duty on shares.

He said: “I believe lower and simpler taxes encourage aspiration and opportunity and help people take more responsibility for their own lives.”

However, Liberal Democrat Shadow Chancellor Vince Cable says: “It is utterly irresponsible to present plans for tax cuts without saying who would pay for them.”

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