The Tories should reward the strivers

Nick Kaplan

I find this one a bit of a dilemma, as a Libertarian I am against tax (except for the provision of public goods)in general simply because people have a right to the property that they earn and the government should not have the right to coerce them into paying extortionate amounts for some state defined ‘social good’, so lifting anyone out of income tax should be a good thing. However I am also against redistribution and it does seem somewhat unfair that those who most use government services (those on low income) should not have to contribute to those services but instead expect that they are provided by the more successful higher earners. I suppose the issue should be settled on practical grounds, in which case, as redistribution isn’t going to end any time soon and as low-income workers pay VAT and other taxes anyway, the best solution probably is to remove them from the evil income tax system altogether.

mart

Mr Milburn of the Labour Party has already suggested huge cuts in government.

The ground is therefore fertile for a bold Conservative policy of raising the tax thresholds.

The state of the economy and straightforward compassion are both strong arguments to reduce taxes. The Conservatives can say it loud and be proud: we want to make life easier for the people of this country.

As for what to cut: name it and shame it. There must be lots of things provided by government that we could do well without. Perhaps the Spectator could do us a service by collating a list.

TGF UKIP

Two points: firstly, as I recall the Forsyth Commission was among the first, if not the very first, to report and promptly received the cold shoulder, if not the outright bums rush, from Dave and Boy George. Secondly, it depends on what you want tax cuts to do where you target them. While all should get tax cuts given it is really just all our money which is being returned to us, it would be wise to bear in mind that while tax cuts for the lower paid might be good PR and earn plaudits even from Polly, it is the high earners who will make things happen and really improve economic dynamism and performance. Across the Atlantic the Democrats label the Bush tax cuts as "tax cuts for the rich" but in reality they were "tax cuts for the movers and shakers", hence the superior US growth over the past five years. If (huge "if") they ever do get round to actually talking about cutting some of the gargantuan Gordon waste and returning some of our money in the form of tax cuts, there is no doubt which way the social democrat Tories will go. "Incentive" is a word to yet cross their lips.

mart

TGF: Use of the word "incentive" seems to me to predicate a statist philosophy. I don't suppose this was in your mind, but I just thought I would point out how it might come across.

People who work for a living should keep a fair portion of what they legitimately earn.

Labour have managed to use the word "fairness" for years, always as a euphemism for redistribution via tax and spend.

How about "fairness" used to mean that people are not burdened unreasonably by high taxes?

Steve

The national minimum wage (like it or loath it is here to stay) currently works out at about £11k per year for a 40 hour week. So HM gov itself beleives that is pretty much the minimum amount needed to keep body and soul together, so why is the personal tax allowance less than this? Surely a case could be made that the Personal Allowance should be the same as the annualised minimum wage. Currently we are in the bizarre position where the very low paid, get taxed, and then have to beg (sorry, claim their tax credit entitlements) to get their own money back, surely not taxing them in the first place, would A, save administrative costs and B, avoid the truly punitive marginal tax rates of 90 odd percent when the tax credits clawbacks start kicking in.

TGF UKIP

Mart, as we all know taxes like death are one of our absolute certainties and taxes are levied by governments in a manner that is determined by their guiding philosophies. "Statist" maybe, but once again, I'm afraid inescapable. Leftists will use taxes to punish and redistribute while rightists will use them to reward and incentivize. The radical alternative being of course a flat tax which would delight me. With regard to your 1.18 post, I entirely agree with you. While poll after poll indicates big majorities saying that they are overtaxed and that Gordon has wasted colossal amounts of their tax, it seems plain daft that the Tories are unable to promise to wield the spending axe and promise to relieve the public of a goodly slice of their tax burden. Stupidly, however, despite it being obvious for some years that Brown's borrowing and spending binge would wreak eventual economic havoc, they continued, and still continue, to promise to match Labour's spending and even increase it (viz Lansley's extra £28bn for the black hole known as the NHS.) Having repeatedly made such promises they can hardly turn round now and promise to start acting like conservatives. Or, indeed, it might be that they really are what they give every appearance of being - Big Government, Big Spending, High Taxing Social Democrats, just like Gordon.

David Lindsay

Cameron and Osborne would do nothing differently. That's why they are there. Their ability to relate to strivers is also rather limited, to say the least.

No tax below national average earnings, a flat rate thereafter with no loopholes, and a guaranteed income of half national average earnings by means of a single form of payment called Social Security. Easy.

But they won't do it, even though (or, rather, because) they'd be in office for ever if they did. That's just not what they are for.

Tim Hedges

If you take someone out of having to pay tax he no longer has any incentive to vote for a reduction in the State. Everyone should pay something; raising the thresholds creates Labour voters.

C Powell

Mart is right: you need to state what you're going to get rid of. LEAs, for one. What do they actually do, which is of any benefit to schools? Private schools - which are some of the most successful in the country - don't need them. You could abolish them or, at a minimum, very radically reduce their size and scope. Quangos: there are thousands of them. I'll bet you can abolish 50% of them without any loss to people's lives. No more translation services for central govt/local authority leaflets; no more "free" magazines. Why do we need a Department of Culture and an Arts Council? Half of the Department of Health spends its time - and our money - telling us pointless thing like: if you eat too much, you'll get fat (you don't say!). None of this is necessary. Most local authority services should finance themselves by charges on those who use them e.g. planning etc. There needs to be a real determination to go round looking at government and saying: "Do we really need this?" with the presumptive answer being No, unless there's a very good case indeed e.g. we do need defence and public transport. A large proportion of the rest could best be provided by the private sector, frankly.

Max Kaye

Low income worker don't pay just income tax, there's also:
- VAT
- Council tax
- vehicle tax
- fuel tax
- duty on cigarettes
- duty on booze
- TV tax (aka Licence)
- green taxes (763 at the last count. Sorry, 764 with taxes on plastic bags...)
- tax on inhaling
- tax on exhaling

(The last two may be premature, but some bastard 'civil servant' somewhere in the treasury is working on it).

mart

TGF: Agreed, taxes are inevitable, and are even good, insofar as they are spent on useful things, and needful things.

C Powell: This is an interesting and thoughtful list. What I long to see is the Conservative party (and/or perhaps a right-leaning publication) producing detailed lists articulating moderate views on what can and should be saved from public spending.

David Boycott

Quite agree we should be taking people out of the tax system (and out of the benefit system), rather than employing legions of expensive civil servants to tax with one hand and dole out benefits with the other.

However, what about raising the personal allowance only for those working in the private sector? This would have the beneficial effect of reducing the incentive to work in the public sector, where wages (and gold-plated pensions) have been increased dramatically over the past decade, but where output remains disappointing.

Fergus Pickering

Sorry, David Boycott, but that's a really daft idea, the sort that could only be hatched on a blog like this. If you think public sector pensions are too high then cut them. But the unions will cut up rough! But not as rough as they would if you tried your idea. Besides are you really suggesting that everyone in the public sector is an overpaid skiver and everybody else, you know, bankers, accountants, lawyers, those people, needs a pay boost on account of the long selfless hours they put in?

Fergus Pickering

Sorry, David Boycott, but that's a really daft idea, the sort that could only be hatched on a blog like this. If you think public sector pensions are too high then cut them. But the unions will cut up rough! But not as rough as they would if you tried your idea. Besides are you really suggesting that everyone in the public sector is an overpaid skiver and everybody else, you know, bankers, accountants, lawyers, those people, needs a pay boost on account of the long selfless hours they put in?

cuffleyburgers

Max Kaye - there is already a tax on inhaling - you listed cigarette tax. And there may not be a tax for exhaling but there is certainly a hefty tax for expiring...40% of everything you own (ed).

The trouble is that the electorate is so conditioned by years of protosocialism and cocooned that any serious debate about reform will inevitably be hijacked by the vast pinko-guardian conspiracy as evidence of the second coming (of st Margaret) and potentially an election loser.