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Showing posts from October, 2010

Making the progressive case for a flat tax

The release of the comprehensive spending review in the UK focuses attention on the expenditure of the government. However, if there is to be real progress in improving the state of health of the UK economy, then the revenue- tax- side of the equation must be considered too. This is not just the rates of taxation, but the costs of collection too. The UK spends roughly 1.15% of net revenue on the administration of its tax system. For comparison, the USA spends 0.52% of net revenue: that is to say that Britain spends roughly three times more on administering its tax system, per Pound raised, than the US does per Dollar raised. This is before we discuss the return of revenues via tax credits and especially benefits. Benefits, which may be taxable, are counted as part of the social security budget. It is safe to say, then, that the UK has an extremely expensive cost of administration of taxes and benefits combined. According to Alan Johnson, the Labour Shadow Chancellor, the cuts that the

Strategy, Spending and the Tea Party

The emergence of the "Tea Party" protest movement in the United States was both natural and even desirable. The positive side of things is that new people have become engaged with the political process in a way that they were not before, and indeed the break down of the American financial system has left many Americans with a lot to protest about. Yet, the initial spur to the foundation of the movement- a resentment of bloated government expenditure at the Federal level and a determination to impose stricter limits on Federal government power has become so confused with the social conservatives positions taken by such as Sarah Palin as to render the movement essentially incoherent. Social Conservatives are- by definition- anti-Libertarian. So it is hardly surprising that time after time the relatively inexperienced candidates supported by the Tea Party Movement have not been able to provide consistent answers to questions that are put to them. As the mid term elections draw

Poor little rich boys

The news that Wayne Rooney is considering his future at Manchester United Football Club has certainly attracted a fair deal of attention. The rules of sport reporting demand that transfer speculation is reported in a slightly breathless air, as though the well paid mercenaries of the footballing world had finer feelings invested in their choice of club- well pardon my cynicism, but the Corinthian spirit left sport well before I was born. The levels of money offered to the young men who attempt to entertain us twice a week are beyond the dreams of avarice. Literally millions of pounds are offered, not only in salaries, but sponsoring and marketing deals of all kinds. David Beckham, for example, is certainly worth more than the team to which he is nominally contracted in Los Angeles. In exchange for the essentially unlimited wealth and heroic levels of adulation given to these footballers, it does not seem too much to expect that they should behave with at least a certain level of grac

So, Quo Vadis, Estonia?

A few weeks ago I had the honour to moderate a discussion session between President Tomas Hendrik Ilves and an international group of wealthy and successful people who have become, for various reasons " Estophiles ". I too count myself a full paid up " Estophile ", since I have been interested and indeed involved in the idea of a free Estonia almost all my adult life. The President asked a question: "After we have achieved so many things: freedom, independence, a democratic society, growing prosperity, membership of NATO, membership of the European Union, membership of the OECD , joining the Euro in January 2011, what are the things that we should aim for now?" It is a difficult question, because the fact is that Estonia has been an exceptional success. Estonia stands as a standing rebuke to the violent society and essentially criminal government of Vladimir Putin's Russia. It seems astonishing that the two were still under the same state as recently

Now the Crisis really begins

The UK property market is unusual. Firstly, owning property is considered the norm: Britain did not have the wrenching changes caused by the second world war that gave a folk memory to much of the rest of Europe of losing everything as borders shifted to and fro. Secondly, the proprietorial feeling of "his home is his castle" made home ownership the social norm. Latterly, as Sterling devalued, Property prices through the 1970s stayed stable in real terms, but gave the illusion of go-go returns. In the 1980s, as inflation cooled and the Pound stabilised, a real boom set in. In the end the boom became a mania. Even after a crash that was largely caused by poor quality mortgages, the UK property market has continued to climb. Now, despite the deliberate attempt to support the mortgage market as well as the wider corporate debt market through ultra-low interest rates and "quantitative easing", the various ratios measuring "affordability" of housing look a

The UK's Top 100 Most influential Liberals and Liberal Democrats

Three years ago I drafted a personal and probably slightly eccentric list of the most influential liberal and Liberal Democrat figures in the UK. How the political world has changed since then! At that point Ming Campbell was still the leader (albeit that he had already announced his resignation). The economic crisis was but a whisper away, though the scale of it was still unclear. The prospect of Liberal Democrat ministers at Westminster seemed gloomy indeed. Alas some of the figures I named have died, others have forsworn their previously liberal allegiance. Yet, new Liberal Democrats can still be found- the list is therefore quite a bit different than it was three years ago. The order is rather random too... HM The Queen Nick Clegg MP- Deputy Prime Minister Vince Cable MP- Business Secretary and best selling author Danny Alexander MP- Chief Secretary to the Treasury Chris Huhne- Energy & Environment Secretary Graham Watson- Leader of the European Liberals, ALDE Amartya Sen- Winn