Income tax is set for a 'socialist' shake-up

TARGETING taxes and benefits for the good of the island's poor is to be discussed at a top-level meeting next month. States members raised ideas during yesterday's Budget debate, including mimicking Jersey's '20 means 20' income tax policy - cutting tax allowances for high

earners - means-testing family allowances, tax credits and offering more help for low earners paying little tax.

'I think they are realistic options,' said Deputy Peter Roffey, chairman of the Social Policy Steering Group, which will meet Treasury and Resources to discuss these ideas.

He believed there was scope for change. 'It is really not difficult to actually raise the starting point at which people pay income tax and operate a claw-back,' he said.

'There is going to be a range of initiatives on wealth distribution we're going to have to look at.

'And I am sure that many among the better off will find some of these objectionable, but we can't help the less affluent just by throwing money at everybody. That's what we did in the late 1980s through to now.'

The redistribution of wealth is a top priority in the States' embryonic government business plan, which should be approved today.

With that in mind, Deputy Roffey said it was a concern that progress on the well-established corporate anti-poverty programme appeared to have stalled.

He hoped that the business plan would reinvigorate the process.

Treasury and Resources minister Lyndon Trott would have to implement the changes, which those who pushed for it felt should go hand in hand with corporate tax reform in 2008.

'These ideas have to be considered, but all these issues have been analysed in the past and rejected following a cost-benefit analysis,' he said. 'I am prepared for us to revisit all these initiatives to look at them alongside the 2008 tax proposals.'

Income tax reform was high on the department's agenda.

'Our approach has always been that you have to start these

sort of things with a blank sheet of paper.' The issue was raised as Treasury steered through the 2007 Budget with unanimous support in all but income tax allowances - an issue raised by Deputy Rhoderick Matthews through an amendment to increase them, which was decisively rejected.

The proposals will see islanders paying more taxes in a whole range of areas - petrol, alcohol, cigarettes, property, social security and income tax - but members still considered it a generally 'good news' Budget.

A handful were critical, however, saying the proposals did nothing for the ordinary working man.