STICKING to her self-imposed fiscal rules, which prevent her from raising the four most lucrative taxes in the next Budget, could well be something of a blessing in disguise for our Chancellor, Rachel Reeves. It means that she has to think outside her red box and look at tax possibilities which have been ignored for years, and which have benefited the rich for too long.

The Institute for Fiscal Studies, Britain’s self-penned “leading independent economics research institute,” the organisation criticised in 2016 for its overarching faith in the power of market forces and for never recommending fiscal changes which benefited the disadvantaged and poorest in society, is at it again.

This time, true to form, it’s calling for “bold action” from the Chancellor, stating that she has three options in her forthcoming Budget, saving billions of pounds in welfare cuts: scrap the pensions triple lock, cut health-related and disability benefits, or reduce spending on special educational needs.

Similarly, according to Moyeen Islam, the “fixed income strategist” at Barclays, an employee whose income most certainly will not be “fixed,” is also calling for “hard choices.”

Apparently, welfare cuts are needed because they will be “credibility-bolstering or enhancing.” In typical scaremongering fashion, Islam says City investors fear Reeves will adopt a “scrabble-bag approach,” through small tax-raising measures. 

Could this have anything to do with the threats made by the Chancellor when in opposition, to “review” the “£174 billion of tax reliefs” that currently exist in our tax system? Guess who benefits from these tax reliefs? You? No, me neither!

One thing is certain: banks and right-wing think tanks are upping the ante, lobbying desperately to convince Reeves and Keir Starmer that welfare cuts are necessary, and certainly preferable to making the rich pay more.

Welfare cuts hit the disadvantaged hardest, driving thousands more into poverty, and hurting local economies as people have less to spend. How generous of all these companies and think tanks to want to encourage this.

It’s not welfare cuts which are needed, it’s “wealth-fare cuts,” the ones that go to the well-off to ensure their prosperity continues, and which cost £174bn a year. These are the “benefits” that only go to a very small proportion of the population, but which could, if stopped and spent wisely instead, make a huge difference to millions of lives.

Imagine if the Chancellor had the courage to scrap most of these tax reliefs and exemptions, as well as equalising capital gains and income tax, reforming council tax, and imposing both new gambling taxes and windfall taxes on the banks for the way they exploited their customers during the inflation crisis in order to make record profits.

It’s simply what a proper Labour chancellor should do. Does she really want to see bankers and hedge fund managers and their ilk celebrating in Bond Street again as they did after her first Budget?

There cannot be many justifiable reasons, especially in a country facing an economic emergency, for either pension subsidies or capital-gains and National Insurance exemptions.

Are investors selling shares really paying enough tax on their profits, and should tens of thousands of profit be made when a residence is sold, regardless of whether it’s a first or second home?

By all means, allow a certain amount, say £10,000, to be made tax-free, but then tax the rest. After all, it’s unearned income, arrived at through no effort other than a requirement to have money in the first place. 

The same goes for those higher-rate taxpayers benefiting from pension tax relief, getting far more generous support than basic-rate earners.

There are far too many loopholes and exemptions in the National Insurance (NI) system. Also, private landlords often pay no NI contributions on their rental income, and many pay the much lower corporation tax on their earnings by setting up limited liability companies. 

Similarly, NI is avoided by partners in companies like most law firms, accountancies and consultancies. Such Limited Liability Partnerships (LLP) are often described as “pass-through vehicles,” meaning that the partnership’s gross profits are paid annually to the partners. LLP payments are recognised as gross income for each partner, and the individual must fulfil their tax liability.

Ever get the impression that the tax system is designed to make us ordinary mortals pay without question, and for the better paid to avoid?

One definite change has to be the stopping of wages and salaries being paid into companies deliberately formed by individuals like Nigel Farage to avoid paying income tax.

The Reform leader uses a private company, “Thorn in the Side Ltd,” to reduce the amount of tax he pays on earnings for GB News appearances. No points for guessing who, according to the MPs’ register of interests, is the director and only shareholder of this company! Apparently, he will have avoided paying nearly £90,000 in unpaid income tax in the last year because of his oh-so-patriotic arrangement.

So many anti-tax avoidance measures need to be strengthened, not weakened; with all the political talk about patriotism recently, including from that arch-hypocrite Farage, the government should be reminding everyone, including all party leaders and royals, regardless of how many flags they display, that avoiding paying taxes is about the most unpatriotic thing anyone can do.

I don’t know about you, but I’m absolutely fed up with rich people urging Reeves to cut benefits for the poor and disadvantaged, while keeping all of theirs. It is time Reeves did something about it — especially if she and her boss want to keep their jobs.