What would happen if we raised the tax free allowance to £15,000 for everyone, but got rid of ISAs?

Question

Please note I'm not Gordon Brown... I just think we should give lower income people significantly more financial freedom, perhaps balancing out lost tax revenues with an increase on VAT to 20% or other suggestions welcome.

Answer 1

The point of ISAs is to encourage saving, which economists will tell you is vital to the health of an economy. Abolishing them and raising the tax threshold would just encourage people to spend more rather than save.

Answer 2

It would mean that I, and hundreds of thausands working on low pay would not pay tax!