Dear Mr Brown

We would like to suggest on behalf of the Mytton family that tax system two would be better. Under this VAT system, our family would pay £20,500 as opposed to £38,000. This is due to the fact that our family earn a combined amount of £100,000 per year. Under the progressive income tax system, they would fall into a high band of taxation. Under the VAT system, they would pay less because there is no expenditure on cigarettes and only a small amount on wine and spirits. Also, the income tax system is too progressive, making it unfair on families that between £50,000 and £100,000. The 60% extra taken is more money to them than to those who earn over £100,000.

To make the tax system fairer, I would like to propose a new tax system. We propose that any new system would involve, as it is now, a progressive income tax. However, we suggest that there is less tax for those who have incomes of between £30,000 and £100,000 a year. This is because prices for petrol and gas are on the increase, with British gas raising their energy prices by 22% as of March 1st this year. People between the incomes stated above will struggle to pay increasing fuel prices, and so should be taxed less. We also suggest that certain goods be taxed more heavily. These include cigarettes, alcohol and fast foods. We feel that this would be necessary because eventually heavy drinkers and especially smokers end up costing the NHS huge amounts of money. It will also help resolve the country's obesity problem. This would go some way to recouping the NHS costs.

We also suggest charging higher taxes on petrol. As Britain's supply of North Sea oil is running out, we need to take account for increasing costs of imports. As a bonus to tax payers, we suggest offering tax reductions for those who use renewable energy in their houses. This would act as an incentive to use renewable energy. As for how our system would affect our family. They would benefit from the lower band of income tax we suggest. Also, as they don't smoke, they would pay nothing on cigarette tax. But they would pay more for Alcohol tax, this will affect their overall spending (spend less on other luxuries). This would hopefully stop them from drinking heavily at all.

Yours sincerely

The team at Verulam School, St Albans