Merge income tax and national insurance

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Merge income tax and national insurance

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Income tax and national insurance are both direct taxes on income and therefore should be merged.

This is because currently:
1) It disguises the fact that NI is regressive.
2) It disguises the real level of taxation on incomes.
3) Those that work intensively for short periods (such as students and seasonal workers) have to pay NI despite having a low annual income.
4) It is more complicated, both operationally for firms and HMRC, and for the workers trying to calculate their net income and tax bill.
5) NI raised no longer bears correlation to health and future state pensions spending (as initially intended) and in reality is lent to other departments to spend on other things.

Whilst pension entitlement is currently related to NI, this could easily be replaced by points being awarded and recorded by DWP to calculate later entitlement.

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