...a blog by Richard Flowers

Saturday, July 14, 2007

Day 2384: Tax and Attacks


Hooray! Another RADICAL tax policy from the Liberal Democrats: let’s CUT the basic rate of tax by 4p so that bringing in a LOCAL INCOME TAX will not make anyone worse off.

(And don’t forget: not only is local income tax FAIRER, you’ll be more better off by not having to pay Council Tax as well!)

We can afford this by (1) making the Green Tax Switch – cutting your taxes AND helping save the world, and (2) closing LOOPHOLES that allow very rich people to pay tax at a LOWER rate than everyone else.

Doesn’t this all seem like a GOOD and FAIR idea?

Well, Mr Power Cable was on the radio to try and explain this GOOD NEWS and what was the question that was put to him? “Won’t there be a million people worse off?”

Look, in the first place this question is so REDUNDANT that it is almost MEANINGLESS.

ANY change that you make in the tax system, ANY AT ALL, means that some people will be worse off and some people better off. Even if you cut EVERYONE’S tax then you must cut spending to pay for it, and the people you would have spent the money on are worse off.

If, like the Liberal Democrats, you choose to be FISCALLY NEUTRAL – which apparently does NOT mean Fisking the Labour AND the Conservatory budgets equally, but in fact means raising the same amount of tax in TOTAL but changing where you get it from – then OF COURSE some people will pay a bit more and some a bit less.

To ask why your policy will make some people worse off is just like saying: “Why haven’t you cut taxes by getting money from the MAGIC MONEY TREE?”

The MEANINGFUL question is “are your changes FAIRER?”

So, Mr Power Cable should have had a much BETTER reply that “Well, that might be about right because 10% of households will be worse off if 90% are better off…” (which you have to admit was a bit LIMP!)

No, our reply needs to be the rather more ASSERTIVE: “So you think that these people should be getting a tax perk paid for them by people who are not so well off, do you?

Because we AREN’T saying that we will SQUEEZE the rich until they go “ooh!”; we are only asking them to pay THE SAME as the rest of us.

Mr Power Cable is JOLLY BRIGHT and we are QUITE RIGHT to have someone so wise and clever in charge of our money policies… but I sometimes think we would be better off sending into bat someone a bit more… BUTCH. Ms Kramer-versus-Kramer, perhaps.

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