Are the Lib Dems a Tax Cutting Party
It seems that the most significant event of last week was Ming Campbell trying to save his skin by announcing that the Lib Dems would cut taxes. The only problem is that the commitment doesn't stand up to scrutiny. At the last election the Conservatives talked of efficiency savings that were available within the Government organisation, the Lib Dems rubbished them. So if they do not believe significant efficiency savings are available it means they have to find another way of funding their huge spending commitments as well as making up the lost £12b from income tax cuts.
This will either mean more stealth taxes (i.e. more spin) or huge taxes on the "rich". If recent history is anything to go by it will be the latter which the Lib Dems fall back on. Unfortunately that solution is not supported by analysis of more distant political history and, in particular, the impact that wealth taxes had in the late 70s when high earners left the Country in droves, leaving the UK with a dearth of high level talent in big business.
Either Ming the Mediocre hasn't looked at this properly or he is hoping that the facts will not get in the way of a good headline grabbing story.
This will either mean more stealth taxes (i.e. more spin) or huge taxes on the "rich". If recent history is anything to go by it will be the latter which the Lib Dems fall back on. Unfortunately that solution is not supported by analysis of more distant political history and, in particular, the impact that wealth taxes had in the late 70s when high earners left the Country in droves, leaving the UK with a dearth of high level talent in big business.
Either Ming the Mediocre hasn't looked at this properly or he is hoping that the facts will not get in the way of a good headline grabbing story.
posted by Martin Curtis at 9:21 AM
2 Comments:
As I understand it, the higher taxes on the rich relate to the top 250,000 earners - something like the richest 0.4%. Meanwhile middle income earners will gain and there will be a significant increase in the numbers of lowest paid taken out of tax altogether, or only paying at 10%.
The gauntlet has been thrown down to the Conservatives - can they come up with a better system that reduces the tax burden for most, and encourages environmental taxation - things they claim to espouse but so far have failed to deliver on?
And does their soi-disant "compassionate conservatism" extend as far as the principle that the ultra-rich should pay more in tax than the poor?
Sounds to me like the Conservatives are on the run on this issue.... and have been well and truly outflanked.
Thanks for the comment - but you miss the point. Those 0.4% will not be simply taxed to death and put up with it. Who gets taxed when the majority of them have left. How would we recover from the "brain drain" effect that would harm efficiency and economic performance because of the loss of our best business expertise (which is what happened in the 70s)?
Most (but not all) of these people are paid so well because of what they contribute for the Companies that employ them - losing them abroad will have a huge effect.
To make up for the £12b that a 2% reduction in income tax would lose is @£52k extra tax for the top 0.4%, on top of that they would, no doubt, have to soak up the costs of the Lib Dems' huge spending commitments - so you can at least double that figure. If I were one of those people (and I wish I was!!), I would seriously consider leaving the Country for somewhere where my contribution was valued, not punished.
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