Tories step around the elephant trap Brown had set for them
James Forsyth 2:28pm
The 45p gambit is all about politics not raising revenue. Brown knows jolly well that even on a static calculation it only raises two and a bit billion and in reality will bring in far less. However, Brown is hoping that the move will either lure the Tories into vocal opposition, allowing him to paint them as defenders of the privileged rich, or cause division in their ranks. (The move, though, does only increase one’s annoyance that the Tories didn’t move to counter-act this by offering their own middle class tax cut over the summer.)
Its shameless pre-leaking was also designed to distract attention from the far more significant tax rises, for instance the expected increase in national insurance contributions—which is equivalent to a rise in income tax, and creates yet another false narrative: all this massive borrowing and the attendant tax cuts can be paid for with a tax on the super-rich.
So, it is encouraging to see the Tories not falling into this trap. Philip Hammond’s response when asked about the issue was pretty much pitch-perfect:
“Clearly if the government is going to announce a huge package of additional borrowing today there will have to be large tax rises after the election. Of course people on higher incomes will have to pay their share of that but don’t let anybody be deluded by the political spin into thinking that the black hole that Labour has created will be filled by a tax on a really quite small number of very higher earners, it wont. We are talking about a couple of billions of pounds, the hole is likely to be a hundred billon pounds big, its going to require tax rises across the board and I’m afraid it will be ordinary families and businesses that are hit not just the very rich.”Today is going to be a test of the Tories calmness under pressure and the ability of their spin operation’s ability to spot the traps that Brown is laying for them. Their refusal to take the bait on 45p suggests that they might be more ready for this challenge than people think.
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Praguetory
November 24th, 2008 2:44pm Report this commentThat is the perfect response... and a realistic one.
The 45% rate will probably make up less than 1% of the funding shortfall, what about the rest?
luke
November 24th, 2008 2:47pm Report this commentStill, they will need to set out in a manifesto whether they will match the 45p rate (plus whatever other changes for the rich will increase the tax take - i think they will get to 5BN in total from this group of over 150k).
So, are we about to get a tory election manifesto that commits to the 45p rate or not?
If not, where do you think will they find the cash from?
David Lindsay
November 24th, 2008 2:49pm Report this commentYou could put up the top rate to ninety-nine pence in the pound, for all the difference that it would make. They wouldn’t pay it then, because they don’t pay it now. Yes, there are people who pay top rate tax. But they are not on £150,000.
Close the loopholes, raise the threshold and, if possible, cut the rate. Not just for the top band, but for income tax as a whole.
They’d move abroad? Well, since they are not paying anything anyway, so what? And in any case, no, they wouldn’t. Precisely two cities on earth offer the lifestyle that they want, and one of them is in a country with a much less indulgent attitude towards tax-dodgers (see another of today’s posts for more on what that great country is really like). Of those who are not British, many would not be let into that country, and have been refused entry to it in the past. And those who are British have no more desire than most other people to live in a foreign country, just because it would be living in a foreign country.
Close the loopholes, raise the threshold and, if possible, cut the rate. Not just for the top band, but for income tax as a whole.
David
November 24th, 2008 2:58pm Report this comment"If not, where do you think will they find the cash from?"
Scrapping ID Cards will raise about 5-8 times more than this tax increase will. Your 5 billion sum is plucked from thin air. Plus, they don't need to find as much money because the Tories don't intend to match Labour's idiotic borrowing and spending levels.
David
November 24th, 2008 3:03pm Report this comment"(The move, though, does only increase one’s annoyance that the Tories didn’t move to counter-act this by offering their own middle class tax cut over the summer.) "
Only if one is a tax headbanger. Come on, if the pitch perfect response is to talk about the fact that this will leave a hole in finances, how the hell are the Tories supposed to have put forward a tax cut themselves?
Wilhelm
November 24th, 2008 3:12pm Report this commentAt least Dick Turpin wore a mask to rob you.
Dour Gordon Broon and shifty Alistair Darling dont even bother. Thanks a bunch lads.
Dont call us, we'll call you.
Wilhelm
November 24th, 2008 3:17pm Report this commentGordon Brown squeeeels
''Im going to lead Britain and the rest of the world out of this disaster.''
EH ? What does Gordon Broon think that Germany , France , Italy , Russia and Japan are doing, sitting at home twiddling their thumbs ?
Broon must think he is the centre of the universe and we still have the British empire.
Talking of Gordon Broon, who elected him as
prime minister anyway ? You would think Britain
was Robert Mugabe's Zimbabwe when it comes to democracy.
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