Conference believes that:

a) Wealth inequality and the concentration of economic power are

economically and socially damaging.

b) Britain's deepening wealth gap rigs society in favour of those

with substantial wealth and those able to inherit it, and has

contributed to a growing intergenerational, geographical and

class divide.

c) The Liberal Democrats should embrace the prosperity and

innovation generated by the market economy, but also recognise

its tendency to concentrate resources and power among a

minority.

d) Capitalism has only thrived thanks to the bold reforms - such as

the welfare state and the breaking-up of monopolies - of liberal

visionaries; these are needed once again if it is to survive the

21st century.

e) The tax system must play a greater role in promoting a more

equitable distribution of wealth; taxation reflects the fact that

wealth creation is reliant on public goods such as infrastructure

and a healthy, educated labour force.

Conference notes the proposals in the spokesperson's paper,

Promoting a Fairer Distribution of Wealth, and calls for:

1. Equalising the tax treatment of income from wealth and income

from work by: abolishing the separate capital gains and dividend

tax-free allowances and instead taxing these through the income

tax personal allowance; aligning capital gains and income tax

rates while introducing a basic inflation or "rate of return"

allowance; abolishing capital gains forgiveness at death, which

creates an incentive to hold on to assets to avoid paying tax.

2. Streamlining the taxation of intergenerational transfers by:

abolishing inheritance tax and instead taxing recipients at

income tax rates and bands of £250,001 to £500,000, £500,001

to £1 million, and above £1 million; ensuring that all transfers

- not just those made at or near the giver's death - are subject

to tax; giving each person a generous £250,000 lifetime tax-free

allowance, and exempting small annual gifts below a specified

amount and all transfers to spouses and charities.

3. Reforming the current regressive system of pension tax relief

by: introducing a flat rate of 25% on pension contributions and

65

DEMAND BETTER

Tuesday

Tuesday 18 September

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