Skip to main content

Time to control taxation

A few weeks ago, the Lib Dems put forward some outline ideas on taxation that involve cutting the headline rates of income tax. I welcomed those proposals then. Last week, more detailed proposals were put forward, which continue the theme. Indeed the substantive proposals are extremely well thought out.

To my mind there is not much doubt that the Labour taxation plans have got to the point of pain. The salami tactics that they have used, while less eye catching than a straight forward increase in tax rates, have substantially boosted government revenues. Unfortunately the other side of the equation- spending- has been less well judged. The government has not set in hand effective ways to control and administer spending, neither on health or welfare nor on education. Part of this is the fact that they refuse to recognise that individual circumstances make blanket spending commitments highly inefficient. The result has been a general increase in costs, but a sharp fall in overall productivity.

Thus Liberal Democrat tax plans should be seen in a wider context. Firstly, the burden of administration is now too expensive- this was part of the thinking behind our proposal to abolish the DTi, but this was not the only area where we intend to deregulate. In large areas of administration and regulation we have proposed the wider use of sunset clauses and the retirement of irrelevant legislation. The cost of doing business in the UK should not rise any further, and if at all possible should be reduced. This includes the cost of doing government business.

The other side of the coin is personal taxation- as more fees are collected by the Labour government, and such financial packages as student grants are phased out, the overall burden on the tax payer as increased quite sharply. The time has come to cut the overall burden of personal taxation. In particular, income tax rates should now be cut.

The next question is how to make up the short term funding gap. This, we have proposed, can be done in the short term by increasing taxation on polluting and energy inefficient activities. In my opinion this can only be a short term policy- since if successful, it would automatically reduce revenue. The longer term goal will have to be to get government to function within tighter financial limits.

I see Tory bloggers trying, ostentatiously, to either rubbish or ignore these proposals.

They fear them because they know that they are credible, substantive and effective, and they are right to be afraid- anything the Conservatives now talk about in tax or environmental policy is just going to look like "me too".

Mind you the policy-free vacuum that is the Blair-lite Tory Party increasingly lacks credibility across the board.


James said…
Hear, hear. I'm very glad that someone is saying this. Tax cuts are associated with breaks for the already rich, but in fact the part of personal income taxation that needs to be hacked away at is the absurdly low level at which the personal allowance ends.
Drastically raising this threshold would be more effective at getting people back into work than half a dozen complex tax credit schemes because it simplifies the incentive to earn wages.

Popular posts from this blog

Trump and Brexit are the Pearl Harbor and the Fall of Singapore in Russia's Hybrid war against the West.

In December 1941, Imperial Japan launched a surprise attack on the United States at Pearl Harbor. After the subsequent declaration of war, within three days, the Japanese had sunk the British warships, HMS Prince of Wales and HMS Repulse, and the rapid Japanese attack led to the surrender of Hong Kong on Christmas Day 1941 and the fall of Singapore only two months after Pearl Harbor. These were the opening blows in the long war of the Pacific that cost over 30,000,000 lives and was only ended with the detonations above Hiroshima and Nagasaki.

"History doesn't often repeat itself, but it rhymes" is an aphorism attributed to Mark Twain, and in a way it seems quite appropriate when we survey the current scene. 

In 1941, Imperial Japan, knowing its own weakness, chose a non-conventional form of war, the surprise attack. Since the end of his first Presidential term, Vladimir Putin, knowing Russia's weakness, has also chosen non-conventional ways to promote his domestic powe…

Cicero ReDux

By Special Request of Baroness Scott and Mark Valladares... Cicero's Songs returns: bigger, longer and uncut.
October 1st marked the half way point of the Estonian Presidency of the European Union.  Perhaps for many people such an anniversary is of passing interest at best.  Yet the conduct of the Estonian Presidency is reinforcing just how forward looking and innovative the most northerly of the Baltic States has become.
Estonia is a country that wants to live in the future, and with its openness and innovation, that future seems a lot closer than almost anywhere else in Europe
It is not that Estonia does not “do” the past: the picturesque cobbled streets of old Tallinn have tourist crowds a-plenty enjoying the mediaeval architecture in an Indian summer of sunshine and blue skies.  The real point is that Estonia refuses to be a prisoner of its past. Lennart Meri, Estonia’s President in the 1990s- who spent years of his childhood in Siberia- once told me that the country had to conc…

The American National nightmare becomes a global nightmare

It is a basic contention of this blog that Donald J Trump is not fit for office.

A crooked real estate developer with a dubious past and highly questionable finances. he has systematically lied his way into financial or other advantage. His personal qualities include vulgarity, sexual assault allegations and fraudulent statements on almost every subject. 

He lost the popular vote by nearly three million votes.

He has, of course, been under criminal investigation practically since before he took the oath of office. The indictment of some of closest advisers is just the beginning. His track record suggests that in due course there is no action he will not take, whether illegal or unconstitutional in order to derail his own inevitable impeachment and the indictments that must surely follow the successful investigation of Robert Mueller into his connections with Russia.

However, all of that is a matter for the American people. 

It is also a matter for the American people that Trump is cheating…