In Europe section of MfSS, delete paragraph EU414 and replace with the following:

"EU414 The Green Party believes that EU VAT regulations should be removed. This would allow member states to introduce a series of eco-taxation measures without creating a more regressive tax system (see EC771)

In EU483, remove "1) reduce taxes on labour (eg Employers NI contributions)" and renumber.

In Food section of MfSS, delete paragraph FD500.

In Agriculture section of MfSS, paragraph AG603 delete from "Pollution and resource…" to end.

In AG604 first sentence, delete "replacing existing taxation on capital and labour".

In Land section of MfSS, delete paragraph LD403 and renumber.

In Housing section of MfSS, delete paragraphs HO402 and HO603 and renumber. In paragraphs HO601 and HO602 replace "EC750" with "EC730".

HO402 The present centralised system of housing subsidy, comprising mortgage interest tax relief and housing benefit, is wasteful and unfair. Mortgage interest tax relief will be phased out, and housing benefit integrated with the Citizens' Income (See HO601 and HO602, below.)

HO603 Tax relief on mortgage interest payments is an inappropriate subsidy to property ownership, favours the better off and puts upward pressure on house prices. It will be phased out (see EC726).]

In Economy section of MfSS, delete sections EC700-EC753 from MfSS, and replace with the following:-

EC700 Taxation is needed in order to fund government expenditure. However the raising of funds is not the only purpose of taxation. The way that taxes are levied also has a vital role in bringing about a green society based on social equity and ecological sustainability.

EC701 Direct taxation, in conjunction with benefits payments, can be used to create greater social equity and justice. Indirect taxation can be used to try to alter consumption patterns and create ecological sustainability. The purpose of a green taxation policy should not be to shift the overall relative burden of taxation either towards direct or towards indirect taxation. Instead, the aim is to alter our approaches to both direct and indirect taxation so that it is better suited to help bring about a green society.

EC702 In general, indirect taxation is regressive, i.e. it impacts relatively more heavily on the poorer members of society than those who are more wealthy. In this way, indirect taxation works against the creation of social equity and, therefore, against the aims of a green society. For this reason such taxes should not be levied unless their intention is to help bring about ecological sustainability or to address concerns about other social issues such as public health.

EC710 Income Tax is the instrument by which all citizens who are able to are required to contribute a proportion of their labours to the running of public services. It is also, when combined with benefits payments, the primary way in which wealth can be redistributed in order to create a fairer society.

EC711 Personal tax-free allowances will be abolished, having effectively been replaced by the Citizen’s Income (see EC730). Income Tax will be levied on all income above the Citizen’s Income. Tax rates will be banded and will increase progressively so that those on higher incomes are paying higher marginal rates of tax.

EC712 In order that people are not penalised by paying high rates of tax in one year, whilst their income dramatically drops in the next (either through personal choice or for reasons beyond their control) income will be averaged over five years and the tax calculated on the rolling average figure.)

EC720 National Insurance is a form of income tax in disguise. As it is only levied on "earnings" (i.e. wages and self-employment income), it means that "unearned" investment income is currently taxed at a lower rate than "earned" income.

EC721 Under a green taxation system, National Insurance will be abolished as a separate entity and merged into general Income Tax. The distinction between "earned" and "unearned" income will no longer be used to determine different methods of taxation.

EC730 A Citizen’s Income sufficient to cover an individual’s basic needs will be introduced, which will replace tax-free allowances and most social security benefits and state pensions (see EC711). A Citizen’s Income is an unconditional, non-withdrawable income payable to each individual as a right of citizenship. It will not be subject to means testing and there will be no requirement to be either working or actively seeking work.

EC731 The Citizens’ Income will eliminate the unemployment and poverty traps, as well as acting as a safety net to enable people to choose their own types and patterns of work (See EC400). The Citizens’ Income scheme will thus enable the welfare state to develop towards a welfare community, engaging people in personally satisfying and socially useful work.

EC732 When the Citizens’ Income is introduced it is intended that nobody will be in a position that they will receive less through the scheme than they were entitled to under the previous benefits system. Children will be entitled to a reduced amount which will be payable to a parent or legal guardian. Elderly people, people with disabilities or special needs, and single parents will receive a supplement.

EC733 Initially, the housing benefit system will remain in place alongside the Citizens’ Income and will be extended to cover contributions towards mortgage repayments (see HO602). This will subsequently be reviewed to establish how housing benefit could be incorporated into the Citizen’s Income, taking into account the differences in housing costs between different parts of the country and different types of housing.

EC740 With the introduction of the Citizens’ Income and the removal of personal tax-free allowances, Capital Gains Tax exemptions/thresholds will also be removed with the exception of a person’s only or main home which will continue to be exempt. Tax would then be paid on all profits made on the sale of investment assets, but not on the sale of ordinary household items which would remain exempt.

Delete HO604 from the housing section and renumber.

[Note of current policy:

HO604 The exemption of primary residences from Capital Gains Tax will be ended.]

EC741 Capital gains will be added into a person’s income for a tax year and be subject to Income Tax in the normal way. Similarly capital losses will be used to reduce a person’s taxable income.

EC742 The Green Party would tax all capital gains made on investment assets on the death of the owner, Capital Gains Tax will be levied on the unrealised Capital Gain on any investments which are still held as if they had been sold at the date of death. Similarly, tax will be levied on any unrealised gain on assets which are given during a donor’s lifetime.

EC743 Short-term speculative trading in stocks, shares and currencies has a de-stabilising effect on the economy as a whole. In order to discourage such trading, a small tax will be levied on the value of all stocks, shares, gilts, bonds, commodities and currency transactions.

EC750 The principal purpose of Inheritance Tax is to reverse and prevent the accumulation of wealth and power by a privileged class. With the taxing of unrealised Capital Gains at the point of death (see EC742), the size of inherited estates will already be reduced. Further taxes, in the form of Inheritance Tax, should be designed to re-distribute wealth without being so wide in scope that they become a financial and bureaucratic burden on most ordinary people.

EC751 Inheritance Tax will be reformed so that it is calculated on a "recipient basis" (i.e. with reference to the circumstances of the person receiving the inheritance rather than the donor). It will also be extended to include gifts made during a donor’s lifetime, rather than just those given as inheritances on death, therefore becoming an accessions tax.

EC752 There will be an annual exemption/threshold for amounts received as gifts or inheritances. As with Income Tax, receipts of this kind will be averaged over a five year period. Any taxable amounts which remain above the tax-free threshold will then be assessed for Inheritance Tax.

EC753 Inheritance Tax rates will be progressively banded, with rates of tax increasing according to a recipient’s total income/wealth. Recipients who only pay Income Tax at lower rates will not be subject to Inheritance Tax.

EC754 The tax-free threshold will be sufficient to ensure that most ordinary gifts between members of families with moderate incomes will not be taxed, and, as gifts between members of families with moderate incomes will not be taxed, and, as gifts will be averaged over a five year period, it will also allow for larger "one-off" gifts (such as those received on marriage, or given by parents to their offspring to help them buy a house).

EC755 Private trusts will be taxed at a single uniform rate on all assets transferred into them and profits made by them. There will be no annual exemption/threshold for trusts. Distributions from trusts to beneficiaries will be taxed according to the recipient’s circumstances, in accordance with the policies laid out above.

EC756 As with Capital Gains Tax, a person’s only or main home will be exempt from Inheritance Tax. If a person inherits a property which is already their principal private residence there will be no Inheritance Tax to pay."

EC760 Corporation Tax will continue to be levied on the net profits earned by companies. These will be banded, with higher rates payable by larger companies in order to encourage smaller businesses.

EC761 The Corporation Tax rules should not encourage businesses to become incorporated in order to take advantage of favourable tax conditions. Therefore Corporations Tax rates, particularly the starting rates, should not give smaller companies an advantage over their unincorporated competitors.

EC762 Some businesses operating within the UK do not currently pay UK taxes because they are able to transfer their profits abroad to have them taxed there. The Green Party would close any existing loopholes so that company profits earned in the UK were taxed here, even where this would mean that profits of trans-national corporations may be taxed twice—once in the UK and again in a foreign country.

EC770 VAT is the largest revenue provider of all the current indirect taxes. It is often referred to as a tax on "consumption", whereas it is more accurately described as a tax on the spending of money. In conventional economic terms these might be seen to be the same thing, but to greens the word "consumption" implies the using up of the world’s valuable resources and this is the type of consumption that we would wish to tax in order to encourage resource conservation.

EC771 The current system of VAT is regressive and is not intended to bring about any ecological benefits. It therefore does not fit with the principles of green taxation laid out in EC702. It is also highly bureaucratic and a severe burden on many small businesses. For these reasons, the Green Party would phase out VAT over a period of time and replace it with a system of environmental taxation measures ("eco-taxes"). These will target specific environmental products, production methods, resources used and pollutants produced in order to discourage ecologically unsustainable consumption (see EC780 and EU414).

EC775 In order to address concerns over public health, taxes will continue to be levied on alcohol and tobacco products. New taxes would also be levied on any other drugs which may be legalised by a Green government (see DU402). As with other indirect taxes, these taxes will be regressive in nature and will therefore be designed to encourage changes in behaviour rather than to provide increased government revenue.

EC776 The effect of these taxes on the consumption levels of alcohol, tobacco and other drugs will be regularly reviewed. The effects of other regulatory and health promotion measures would also be reviewed, along with regular assessments of the harm done by such drugs in society. In this way, tax levels can be adjusted to the most appropriate levels to help reduce harm caused by drugs.

EC777 When reviewing the effects of these duties on the consumption of alcohol and tobacco, particular attention will be given to the issue of the smuggling of these products from other countries in which duty levels are lower. Amounts which people are allowed to bring into the UK for their own personal use will also be reviewed to ensure that they are not providing a loophole for a significant trade in black-market goods. Regulations should not allow different tax rates in other countries to undermine UK public health policy (see EC786).

EC780 A system of environmental tax measures ("eco-taxes") will be introduced alongside the phasing out of VAT (See EC771). Such taxation is designed to encourage movement towards a sustainable economy, by increasing the prices of items or services produced using unsustainable or polluting practises. It will therefore be calculated to achieve the desired environmental effects, not to maximise revenue. It is acknowledged that environmental taxation can only be successful when integrated with a great many other policy measures, including regulation where necessary.

EC781 Eco-taxes can be expected to decrease in their revenue raising power as their purpose takes effect. However, as much of the revenue from these taxes will be spent on measures to combat pollution and its effects, the need for such revenue can also be expected to decrease as we move towards a more sustainable society. Therefore, although the operation of all related policies will be continuously reviewed, it should not be assumed from the outset that a reduction in eco-tax revenues will result in a funding shortage.

EC782 Eco-taxes will be levied as close to the point of production as is practical. Resource taxation will be charged on the use of raw materials, and will reflect their relative scarcity and the environmental disruption caused by their extraction. The raw materials which would be subjected to such resource taxes include fossil fuels, hardwoods, metals, minerals and aggregates.

EC783 In order to prevent taxes on fossil fuels from impacting too heavily on the poorest members of society through their domestic fuel bills, households will be given a tax-free (or cost-free) initial fuel allowance which will vary according to the season to reflect basic heating needs. Fuel suppliers will no longer be allowed to levy standing charges for fuel supply, nor to give price discounts for increased fuel use. In this way, the amount paid by the customer for increased fuel use will better reflect the environmental impact.

EC784 Road fuel duties are important in encouraging drivers to become mileage conscious. As far as is practical the costs of motoring should rise in line with increased car usage, to make increase car use less attractive and encourage the use of public transport. 7Fuel taxes should therefore be increased to incorporate the Road Fund Licence ("tax disc").

EC785 As well as taxing the use of resources which are input into a production process, taxes will also be levied on the outputs of those processes, depending on their ecological impact. This will include taxes levied on the desired products of manufacture if they are considered to be pollutants (e.g. pesticides or plastic packaging products) as well as taxes on waste products and emissions (e.g. toxic gases) which are discharged into the surrounding environment. In the case of fossil fuels, CO-2 emissions will be taxed in order to discourage their use and reduce their effect on climate change. This will be done by basing the level of taxation on the carbon content of the fuel.

EC786 Import duties will be levied on both raw materials and finished products which will reflect the ecological impact of the production, extraction and transportation of such goods where sufficient eco-taxes are not considered to have been levied in their country of origin. This system will include a re-introduction of duties on goods imported from other European Union countries where considered necessary (see EU443 and EC777). Enforcement procedures exercised by Customs and Excise must be sufficient to prevent a rise in the levels of organised crime in relation to smuggling and evasion of duties.

EC791 A system of Land Value Taxation (LVT) will be introduced to replace the Council Tax and the National Non-Domestic Business Rates. LVT rates will be set at a local level, and will be based on the annual rental value of the land.

EC792 Rates will vary according to the permitted use of the land, as determined by planning consents which have been granted. Agricultural land will be taxed at a low rate so that intensive farming is not encouraged or basic food prices forced to rise.

EC793 There will be no reduction of or exemption from LVT for buildings which are left vacant or which have been allowed to fall into a state of disrepair. In this way, the policy will encourage full use of existing properties and discourage the practice of people speculating on the price of sites whilst keeping the properties empty or derelict.