Wednesday, May 03, 2006

Abroad thoughts from home

A sunny Aberdeenshire- a sight guaranteed to gladden almost any heart. A pleasure to be amongst "ma ain folk"- and my cousin is now well and truly married. The weather was so good, that we were able to hold the ceremony outside- and it almost felt like Benachie was a guest at the wedding.

Arriving at Dyce, the previous day, I found Donald Trump's rather knackered looking 727 business jet parked across the runway- a big deal, apparently, but given his track record of considerable failure, as well as his talent for vulgarity, I am somewhat cautious as to the real chances of his bloated golf course project for Balmedie. Since he has not even submitted even an outline for planning permission, and his project may conflict with the planned off-shore wind farm in the same area, there may be trouble ahead Still, at least it is ambitious, and I do detect a spring in the step of many people in the North East.

In the clear, bright light that seems unique to Aberdeenshire, it seems appropriate to question many things. The implosion (however temporary) of the Labour government has not been matched with a corresponding advance for the Conservatives. I think that people are rather sceptical about what they get if they simply swap Red for Blue. The similarities between the fag end of John Major and the current position of Tony Blair may be only superficial, but they are sufficient for the voters to get pretty bored with both sides. So, I think the Liberal Democrat contention that changing the government is not enough, we need to change the system of government is finding some resonance.

Mind you, after I raised the issue of the Laffer curve in a letter to the Liberal Democrat News, I am a bit irritated by the response. If tax yield falls after an increase in marginal rate of tax as Laffer predicts, it can hardly be said that increasing marginal rates will help promote government expenditure programmes. From my work in Central and Eastern Europe, I can see quite clearly the validity of Arthur Laffer's work, and I am slightly resentful of comments that suggest that since I support cuts in the marginal rates of income tax, that therefore I am undercutting the alleviation of child poverty. NO! If there is less money in the kitty, how can it be said that this is a good thing? Furthermore, I am morally opposed to taxes of more than half of anyone's income and oppose a government budget of greater than 50% of GDP. Liberalism sets limits to the state, and in my opinion these are the absolute maximum limits that the state should be permitted in the economy. This does not make me a right wing nutter- it just means that I can count and understand a basic level of economics.

I am preparing to go to Japan- and looking forward to exploring such rich sites as Kyoto, Nara and Nikko- anyone out there with any better recommendations?

1 comment:

Tristan said...

I find some of the thinking on taxation somewhat disturbing too.
I think Laffer was correct (to me it makes total sense), especially when you take into account the increased incentives for the rich to avoid tax (and indeed, be given loopholes by the government).

Another factor of high income taxes is it discourages investment. Who's going to take the risk of investment if half or more of the returns are taken by the state? Its better just to keep your current wealth safe.

I get the sense, there's some work to be done in removing the collectivist/socialist assumptions by many in the party, plus the fact that talking about lower taxes sounds too Tory...

There is also a case for investigating whether what the state does now is best done by the state, but to suggest some things is heresy...