we have discussed before here, when this idea was first floated by Policy Exchange and the Limp Dims.
In need of an electoral boost they are no doubt pushing this. Interestingly George Osborne floated this idea a long time ago when in opposition too - so with the top three in the Government in favour this is likely now to get a good hearing.
However, having thought about this more since I last posted here are the pitfalls:
1. Who Qualifies - how about those who don;t pay any income tax, is this fair ( I guess they pay VAT etc?)
2. How to administer - 40 odd million people to be contacted, the 2011 UK census cost £500 million so that is a comparator to the kind of costs of contacting everyone and sending them something.
3. The Government needs to be paid off first,so only profits go to the proles - is this likely? This in itself adds another level of complexity
4. ISA really need to be set up for this to make it fair and kick start saving in the UK - but that will be too much to do at the same time no doubt?
5. The deficit is big enough and needs to come down, this is a tax cut...would it not be simpler to sell the banks to Sovereign Wealth funds, pocket the money and reduce taxes by the difference - this would achieve much the same thing and be alot cheaper.
On the plus side, encouraging share ownership and an interest in companies I am all in favour of as a Capitalist - but the cost of doing this probably outweighs the benefits in this case.