Growing Our Own Future – Freed from Centralised Party-First Politics

Proposed Operational & Taxation Framework

Under the 7StatesUK model, each State has full autonomy to set its own Personal Taxation policy (under regulations set by a Federal Act of Parliament), able to prioritise its own Revenue and Capital requirements. Some States may choose a low‑tax, high‑growth “Singapore‑style” model; others may prefer a high‑tax, high‑welfare Nordic model; most in between.

Combined with the ability to set their own National Insurance rates, this places Personal Tax, State Pension and Welfare policy directly in the hands of each State’s citizens (via their MPs), whilst still operating within a democratically-established UK‑wide taxation framework.

1. UK Citizenship & Federal vs. State Responsibilities

UK Citizenship remains under the management of the Federal Government – funded by Non-Personal Taxes (Corporation Tax, VAT, Alcohol & Fuel Duties, Tariffs etc). Maximum practicable operational power is devolved to individual States – funded by their own Personal Taxes & National Insurance. The division of responsibilities as in the following examples:

At the Federal level: Commercial & Criminal Law, Foreign Policy, Monetary Policy, Non-Personal Taxes, National Standards, UK Water, Energy & other Infrastructure Planning, Cross-Border and International Transport, Defence, UK Citizenship & Border Security, Federal Wealth Equalisation Management.

At the State level: State Civil Law, Police, Income Tax (hybrid, Other Personal Taxes (Inheritance, Capital Gains and Stamp Duty), Local Service Design & Delivery (Healthcare, Education etc), Business Development, Local Transport, Water & other infrastructure, National Insurance (Benefits & Pensions for State-Citizens and Benefits for State-Non-Citizens).

2. UK State Residency & Civil Funding

State Residency is based on the citizen’s sole or main residential address – regardless of where they earn their living in the UK – or where they happen to be in the UK at any given time. The principles of State funding are as follows:

• State Pensions change to align with the EU norm – citizen’s own contributions being legally defined as our own money (rather than unfairly treated as withdrawable “Benefits” under Government Control).
• State Pension, Benefits & Welfare funding is entirely from Employer & Employee National Insurance.
• State Accommodation and Benefits paid the resident State Non-Citizens (including immigrants) is separately and similarly funded by Employer and Employee National Insurance Contributions.
• HealthCare and Socialcare funding are left under the democratic control of each individual State funded from National Insurance and/or Personal Taxation and/or by other means (subject to Federal Standards on Data Architectures, Medical Standards and NHS Staff Pay Scales).
• Other State Civil Funding Needs from Personal Taxation and/or by drawing on a Federal Equalisation Fund (see 4 below).

A standard “Residency Eligibility Period” would apply (changeable only by a Federal Act of Parliament) for those citizens that had previously lived in a different UK State. For example, Income Tax / NI Eligibility could take 3 years, Civil Law eligibility 5 years and Inheritance Tax /Stamp Duty eligibility 10 years. During that period, the citizen’s previous State’s policies would apply.

3. The New System of Hybrid Income Tax

3.1. Motivating & Rewarding Work & Economic Growth

A key objective of UK Federal Evolution is to generate employment, motivate work and people away from being dependent on Benefits. To drive UK innovation and economic growth – both for more money in pockets and to better fund Health & Socialcare & other public services. To achieve these goals, the UK Federation uses a system of Hybrid Income Tax, where:

• Individual States set their own rates of Employer and Employee National Insurance to fund State Pensions & Benefits (separately for both resident Citizens and Non-Citizens)
• Individual States establish their optimum balance between Personal Taxes and Welfare Funding – setting there own Tax Rates – at income levels up to 7 Times average UK earnings
• Wealthier States become economically motivated to contribute to the economies of poorer ones – by means of a Federal Equalisation Fund.

3.2. Hybrid Income Tax – Federation-Level Responsibilities

3.3. Hybrid Income Tax – State-Level Responsibilities

Each Tax Year, each State sets its own Income Tax Control mechanism – called “The Federal Tax Threshold”. This relates to the UK-wide average full-time earnings in the previous tax year – set at between zero and 7.0 where:

A value of zero indicates that the State does not wish to contribute to the UK Federal Equalisation Fund – but wishes to keep all its Personal Taxation for its own internal purposes.  In this case, the State must set its Income Tax Rates to the same, or higher than, the Federal Income Tax Rates.

Any value between 0.1 and 7.0: The State wishes to set its own Income Tax Rates and also contribute to the UK Equalisation Fund.  This entitles it to set its own Income Tax Rates up to its chosen Federal Rate Threshold.

For example: If “UK Average Earnings” were £40K, a Threshold Value of “4.1” would mean that the State sets its own Income Tax Rates up to earnings of £164k (£40k x 4.1). Beyond that, the Federal Tax Rate applies (but only if higher) – leaving all earnings up to £164 still taxed at the State Rate. The difference between the tax they ACTUALLY paid and WOULD have paid (at the lower State Level) is then credited to the Federal Equalisation Fund.

4. The Federal Equalisation Fund – Spreading Wealth

The Federal Equalisation Fund (credited as3.3 above), becomes managed by the Federal Government to become a funding pool from which States can borrow at a nominal rate (or even interest-free) to fund their own economic development – spreading wealth under Federal Treasury due diligence.

Should the Federal Government run a surplus, it would have the option of crediting the Federal Equalisation Fund. However, it would not be permitted to draw on it – therefore needing to cut costs, raise Fiscal Revenues or (as a last resort) increasing National Debt.

5.  Democratisation of Immigration.

In the same way that individual States democratically establish Benefits for resident Citizens, they also establish Benefits for Resident Non-Citizens.
So more-sympathetic States would likely give higher levels of accommodation and Benefits -while less sympathetic ones would likely provide less. The choice of Resident State being left up to each individual immigrant.

6.  Impacts of a Federal UK on the London Economy

The existing Greater London Authority would be absorbed into the new State Government of London, with City Hall becoming the seat of the London State Parliament. The current Mayor and Assembly would transition into the State’s First-Minister and Legislature, while all GLA functional bodies — including TFL, the Metropolitan Police, the London Fire Brigade, and the development corporations — would convert directly into State‑level agencies.

As with all other States, Funding would shift to its own State‑established system of Personal Taxation – its high-earners individually crediting the UK‑wide Federal Equalisation Fund by the system of Hybrid Income Tax. London becoming the financial engine of the overall UK federal system – in charge of its own destiny – whilst driving the spread of wealth to other States.