...a blog by Richard Flowers

Friday, May 23, 2008

Day 2697: The New Tax-Cutting Party


As the IFS (Institute for Funny Statistics) takes Chancellor Sooty to task for his one-year fix that will leave people worse off again next year…

And Mr Balloon – once more choosing the ANCIENT BRITON approach to policies: going naked but for his blue war paint(!) – tackles the Prime Monster on the same subject…

…it's GOOD to know that at least the LIBERAL DEMOCRATS have got some IDEAS for making the TAX a bit fairer and bit simpler and – dare we say it – a bit less!

Mr Clogg has made a speech explaining HOW and WHY.

Now, personally, I think that our SHORT TERM objective has got to be bringing BORROWING under control. At the moment Sooty is the Mr Micawber of Finance Ministers…
"Annual income twenty pounds, annual expenditure nineteen nineteen six: result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six: result misery."
To which Sooty might add: "Annual income twenty pounds, annual expenditure: two aircraft carriers, two international wars, two tax cuts for the middle classes, 2% for the police: result election catastrophe!"

With his tax-cut-con-cover-up-bribe Sooty is now borrowing to cover the gap between his current spending and his current income. This is the route to DEBTORS PRISON.

So, as I say, the most important thing is to close that gap.

Obviously there are only TWO ways to do it: tax more or spend less.

What I am really pleased to see is that Mr Clogg recognises that we have reached, or at least are near to, the TOP END of the amount of tax that the people of Britain are willing to let the Government take.

Mr Frown – like you could forget that HE was the Chancellor… and STILL IS! – has done this through SLY and UNDERHAND methods: mainly by drawing more and more people into the 40% Higher Rate tax bracket by not putting up the tax bands as much as the increase in salaries; and by squeezing the central Government grant to your local council so that they have to put up the Council Tax, hitting the lowest paid disproportionate harder.

Of course, I say "near to" the top end because although Mr Frown seems HAPPY to have DOUBLED the tax take, squeezing THREE-HUNDRED BILLION pounds more out of ordinary working folks, he does seem quite happy to let super-rich individuals and big business get away with TWENTY-FIVE BILLION pounds of tax avoidance through (entirely legal) loopholes and non-dom status.

(Think about THAT when the headlines are screaming "Record Benefit Fraud"
over the news that the government has lost a whole ZERO-POINT-ONE-FOUR billion in benefits.)

Mr Frown's making the tax system more COMPLICATED has positively ENCOURAGED these people to get their highly-paid tax accountants (or more strictly speaking highly-paid partners in accountancy firms who then employ relatively averagely paid drones to do all the work) to find them all the cracks and crannies that the "great one" has accidentally (or accidentally-on-purpose) left for them to hide their money in.

By making taxes SIMPLER we also make them FAIRER, by having the rich companies and individuals pay their share – not pay MORE than their share, not SQUEEZE them till they SQUEAK, but at least stop the LUNACY that means they pay a lower tax rate than their CLEANING LADIES!

Using that money to take the lowest earners out of tax ALTOGETHER would be the way to spare them from Mr Frown's doubling of the 10p tax band that DOESN'T mean running the Government Credit card so far into the red that it MELTS!

This would be both REDISTRIBUTIVE – readers from the Labour might want to refer to their history notes to find what that means – AND fiscally neutral, not putting the tax burden up any higher than it already is.

Of course, if we CAN'T put taxes UP any more then LOGICALLY this means that we have got to think very hard about what SPENDING we would be willing to CUT.

And that is what Mr Clogg is going to do: he already has a target of twenty billion pounds of spending that he wants to redirect to be spent BETTER, but now he wants to go even further and start to find ways to reduce the tax burden.

Personally I think that spending money on body armour rather than aircraft carriers might be a good start, but there is also the way that Mr Frown's loves his BYZANTINE Tax Credits so much that he splashes them around with gay abandon on anyone fitting the right social profile – in work… married… with children… first name Gordon… etc. By targeting the benefit on the people it's SUPPOSED to benefit – i.e. the least well off – then you can be considerably less WASTEFUL.

Oh and there's the exciting way that with all of their special advisors, the Labour are now basically running TWO Civil Services in parallel. Probably room for some savings there.

What is most important about all this, though, is that Mr Clogg has seen where the Liberal Democrats principles have put us in a place away from the other two Parties.

While Mr "Loopholes" Frown and Mr "tax cuts for dead millionaires" Balloon pursue the DUBIOUS HONOUR of sucking up to the rich while borrowing to meet their spending commitments, only the LIBERAL DEMOCRATS are offering to CONTROL spending, CUT TAXES and STICK UP for the low paid, the hard working, the ordinary people of Britain.

Yes, I do KNOW that Dr Who says: "logic, my dear Zoë, merely allows you to be wrong with authority." The problem is that in that instance Zoë was right and Dr Who was wrong. So there may be some IRONY involved in using the quote to criticise people who use LOGIC.

1 comment:

Linda Jack said...

Absolutely! (I think?) Now, me is not a Economist ......but, taking people out of tax at the bottom end seems to be a teeny bit....sensible???? Surely it costs more to pay tax credits than to put the money directly in people's pockets??? oooooh, I feel a blog coming on!