Saturday, September 01, 2012

A taxing subject: wrong answer, wrong reason, but right reasoning

The UK tax system is a mess. At 11,560 pages, it is five times longer than the German tax code. It allows so many exemptions at the top end that the wealthiest taxpayers pay a smaller proportion to the treasury than the poorest. So despite the Daily Mail's drivel about the rich being "overtaxed", the fact is that the tax burden in Britain falls disproportionately on the middle class.

So the Lib Dem proposal to impose a super-tax on the wealthy has some superficial economic merit.

Unfortunately it is a cynical exercise in the politics of the focus group. The party leadership launched the initiative knowing that the Conservatives would veto any tax that was not already in the coalition agreement. There was no chance of this idea gaining any traction. 

So why do so?

The answer is simple: because the party leaders are reading the opinion polls and focus group reports that suggest that such a differentiation on tax will boost the only weakly recovering support for the Lib Dems. The howls of contempt from the hypocrites of the right wing press only adds to the attraction of this "initiative".

However I, for one, can not help but feel rather irritated. I am a Liberal at least in part because I approved of a party that eschewed these blatantly political games in favour of policy initiatives that were intellectually honest and coherent.

I have just received my conference pack to attend the Lib Dem conference in Brighton. I am underwhelmed. The policy ideas to be discussed are mostly puerile and irrelevant- designed to minimize pressure on the embattled leadership by focusing on milk and cookies issues, rather than anything that might give Nick Clegg a headache.

It is understandable, of course, but the membership of the Liberal Democrats is adult enough not to need being led by the conference wranglers and minders. Indeed it is the fact that the Lib Dems promote free speech and internal democracy that is why so many of its members remain loyal.

So I will go to Brighton, and I intend to speak up for more efficient and fairer taxation. I will, however dismiss this latest so-called "initiative" for what it is: a cynical exercise in politics and not a serious attempt to promote radical reform.

UK tax is spectacularly expensive to collect and deeply regressive in its economic impact- and both Labour and the Tories think that this is OK. It is time that the Lib Dems approached this critical subject from the point of view of the public good, and not the calculation of political advantage. To do otherwise puts party above country, and the Lib Dems should never do that under any circumstances.  

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