No tax cuts in England’s green and pleasant land

TomTom

Those households paying 40% tax but not earning more than £80,000 will be hammered by the Treasury. Their children will get uncapped tuition fees, they will get higher NIC and Income Tax and lose Child Benefit.

Why pretend ? The Banking Brotherhood needs its "lemon Socialism" of public subsidy and the workless busy re-populating the country need their public subsidy - so both ends of the candle are burned against the middle.

It is amazing how the middle takes it without a vicious backlash.....maybe it is simply building up a head of steam. Who knows ?

Liberty

Taxation above 40% is unlikely to raise any more money. I predict that just before the next election and after Labour have committed themselves to maintaining the 50% rate the government will announce that the 50% rate will be abolished, unless the 10,000 threshold is in place which pushes the 50% rate further out. Of course, the 50% rate will still not raise any extra cash because the incentive to avoid/evade it is that much greater especially in the very high earners.

Tarka the Rotter

Perhaps the goernment could also explain why it is still in the best interests of this country to belong to the EU, why in the middle of this financial recession we are still handing over £56 million a day to Brussels, and why we, the electorate, are not allowed to say whether we think this is a good deal or not? Perhaps they can also explain why the Quangos may well be abolished though their functions given out to the private sector - why not just abolish the functions altogether? Why has so much of our tax-pounds gone to Pakistan when most of it will end up in corrupt pockets? Aaaaaaaargh, am being hit by a tsunami of total despair...

Simon Stephenson

"The government must explain why its reforms and your taxes will transform public services for the better and restore health to the nation’s finances."

What needs to happen is that "the health of the nation's finances" is looked at much more from the point of where we are, and much less from the point of how much where we are is changing. The financial and economic catastrophe of recent times has been caused principally by spending the last 15 - 20 years over-stressing the importance of the flows, with the concomitant lack of concern for the balances. This may be all very well for resource-rich economies, where short-sighted misallocations can easily be remedied by moving on elsewhere. But it's a very different story for economies constructed on human capital. Here, it is vastly more important to build on what has already been built, and therefore to be somewhat more prudent about what to develop for the future.

The key area of concern should be the level of debt, not the level of deficit. Is the current UK balance sheet something upon which we can build, or do we need to reconstruct at a lower level of debt? There's far too much sloppy thinking going on that assumes that, unless the remedy is painless, past mistakes can be left uncorrected.

Fergus Pickering

Where did I read that only 5% of wage-earners earn more than £55,000. If that is true then anyone who earns more than this is surely UPPER Class and we really don't need to care about their tax-burden. If my figure is incorrect could you give us a breakdown. What percentage of people earn more tan £100,0000, 75,000, 50,000 40,000, 30,000? Anyone who sends their children to a good public school must be pretty rich, I would have thought. The middle-classes, according to ME, are the ones who send their children to grammar-schools - if they can find them.

Dave B

We'll all benefit from the £10k tax allowance, so the big difference will surely be that tax will shift more to consumption, with the increase in VAT, rather than income.

TrevorsDen

if there is a logical rather than political argument for the 50% tax rate it is at a much higher income level than now. £250,000?

But in any case the middle income earners are the ONLY ones in any numbers with any money.

Tax cuts are only realistic if we have some really quite significant reductions in govt expenditure.

DavidDP

Better to promise no tax cuts and then deliver one than to promise tax cuts and deliver none.

It seems fair enough given the focus on cutting benefits at the same time, and it does provide a measure of predictability.

Beer Moth

I had quite become used to the likelihood that I will have to pay more tax in the near future - dig our way out of the mire and all that.

This report has me confused now. How was it ever on anyone's agenda to cut taxes in our present state?

Liberty

Tarka the Rotter:

Agreed. But the EU is the stuff of wet dreams for politicians. They will never tell us the truth and hang on to the EU till their last breath. Think of the attractions: Power without responsibility. Decisions made behind closed doors or five star restaurants. No elections. Lots of money to spend on themselves and their friends and no-one knows about it. Never having to raise donations from people they hate. None of those tedious constituency meetings with people they hate. Never having to explain themselves to voters. Poncing around the world making big announcements, meeting their fellow big noises is swish hotels in gorgeous places. And when they get tired or bored sent on a gigantic pension to the House of Lords to while away their thirty or so twilight years, write their memoirs, and sound important. Lovely.

Tarka the Rotter

Ah Liberty, what truths are written in thy name...

Gawain

This is almost the final stray for me. Having had two weeks of Clegg proving what a lightweight poseur he is we now have a scottish politician stuffing the English middle classes. If there is no hope of taxes coming down then there is no hope for this government and especially the Liberal half of it ! I will now judge this government on the extent to which it reduces the cost burdens on the English middle class who are obviously expected to pick up the bills. A large reduction in the number of Scottish politicians at Westminster would be a very good starting point

TGF UKIP

Why would there be the slightest surprise at this given the onslaught of this bunch of egalitarian "progressives" against the middle classes.

When they believe that there are too many middle class kids going to university and intend to thwart the attempts of middle class parents to get the best education they can for their kids, why on earth wouldn't they soak the middle classes.

It almost makes me feel sorry for those poor misguided saps who were daft enough to vote for them in the misguided belief they were voting for anything resembling the Conservative Party.

oldtimer

So Mr Alexander is setting tax policy?

I am curious what he means when he refers to the overall level of taxation. Is this a monetary amount? Or does it refer to % of GDP? The report is not clear - at least not to me.

Others, using history as their guide, have demonstrated that the UK will tolerate c38% of GDP going on tax. Above that figure and the natives become restless. I am unable to find a quick ready reckoner of where we are at the moment and where we are going on this. Until this is clear it is difficult to pass a sensible comment.

His comment also allows wriggle room for changing where the burden of taxation will fall. Many people think that raising the threshold at which tax starts to be paid to £10k is a sensible reform and reasonable objective for the coalition. But the `soak the rich` mentality of the LibDems will prove to be counter productive if they succeed in imposing this on the Conservative members of the coalition. The `rich` will not stick around to be soaked. Many have already voted with feet, wallets and wheezes. More will do so the longer the 50% tax regime remains in place. The UK is in danger of being perceived as a dead end economy.

normanc

I take it then that the Conservative Party have officially abandoned the theory that tax cuts stimulate economic growth?

A pity, as we could be doing with a growing economy.

I was listening to Ronald Reagans inaugural address the other week on some radio programme and one of the things he said was that the tax burden of 37% GDP was killing the USA and that no country in history had sustained growth with such a high tax burden.

If only we could get government spending down to 37% GDP in UK! Appears 45%+ is the new norm.

Better get those printing presses warmed up Merv.

Not a misguided sap

@TGFUKIP

Dimoto

Perfect response to this drivel Normanc, so I'll just repeat your wise words :

I take it then that the Conservative Party have officially abandoned the theory that tax cuts stimulate economic growth?

A pity, as we could be doing with a growing economy.

I was listening to Ronald Reagans inaugural address the other week on some radio programme and one of the things he said was that the tax burden of 37% GDP was killing the USA and that no country in history had sustained growth with such a high tax burden.

If only we could get government spending down to 37% GDP in UK! Appears 45%+ is the new norm.

Better get those printing presses warmed up Merv.

Leon Vestey

The simple fact is that we are being taxed out of existence to support the insupportable.
I have the misfortune to live near a family of five in which no one has actually worked. Yet they have a better car than me; teh local council has just renovated their house; they do not pay council tax and have God knows what other perks. The male children are well-known to the police while the daughter is a welfare-breeder.
Non-workers are treated so well that they inspire envy while the workers are taxed beyond belief. The people who organize this system and supervise its running are literally paid up the wazoo!
How long can reality be mocked in this way?

Mike

I pay 51%+ of my income in tax and am effectively treated as some medieval villein paying the majority of my income it tithes under threat of violence and/or gaol if I refuse to pay.
@TGFUKIP I agree that we have elected Blair mk2, however who whould you have had me vote for. Labour? UKIP would have allowed Labour to get in in my seat.....