Lawson: don't do it George

salieri

NICIT. What a wonderful name for a global taxation policy. At least in those days the Treasury had a sense of humour.

David Martin

"He could encourage support for a low tax economy by illustrating how the state can seriously damage your wealth, therefore increasing the chances of an outright Conservative victory at the next election."

The Tories are not likely to prosper from embracing such neo-liberal anti-statism. Most electors want to see public spending at a level that will ensure effective policing, well-equipped armed forces, ready access to medical treatment, good quality education, publicly supported libraries and arts centres, etc., etc.

Some contributors to, and readers of, The Spectator, might consider such electors misguided. Yet, although they won't be marching through London today, I'm sure that the majority of voters are unattracted by individualist philosophies.

The failure to make some institutions of the state operate efficiently will in any case mean that Osborne is unlikely to risk letting the ramshackle HM Revenue & Customs administer a merger of income tax and NI payments. Were he to take the risk, the consequences of that alone would ensure a Conservative defeat at the next general election!

ROJ

Ooh, it's really difficult and it will cause lots of problems, so what's the point of doing it? Because it makes sense, and the present system does not. Of course, in such a highly taxed nation, it would be absurd to increase taxes on pensions and investment income. So that would stay the same, while rationalising the tax on earned income. That would bring into sharp focus the need to bring the two tax rates into line - by bringing down the tax rate on earned income. That should surely be the long term goal of the whole exercise.

Cynic

Yes, salieri, NICIT was appropriate, but a contributor came up with a better acronym to describe lumping it all together - National Insurance Together With Income Tax; NITWIT.

Charles

salieri,

He also came up with GERBILs (gilt-edged re-basing index linked stock) and NIGELs (non-index linked gilt-edged loan stock)

Publius

@David Martin

You forgot outreach workers, Council snoops and assorted busybodies, bloated salaries and pensions for absurd Council "Chief Executives", Labour's expensive surveillance state, our payments towards the corrupt EU, NHS "racism awareness" courses, expenditure on Black History Month, LGBT History Month, Disabled History Month, pointless recycling and associated subsidies for "green" fads that turn out not to be green at all, the proliferation of pointless EU-generated and UK-gold-plated rules and legislation and the costs of subsequent enforcement, intrusive Census bullies, cost of prosecutions by the Thought Police, and all the other paraphenalia that prevent decent people from getting on with their lives without constant aggressive ignorant cattle-prodding from the state.

Fex Urbis

A-? Talk about grade inflation. It was a marginal pass and the fact that the odious Balls managed to trash it without too much bother shows that Osbourne has found himself in a position way beyond his pay grade.

The fact that he thinks wasting vast amount of time and money in unifying tax and NI is worthwhile in the current desperate climate just demonstrate how clueless he is; it's an old tactic looking like you're working hard whilst achieving nothing, we've all done it at sometime in our lives, the big difference is none of us was running the country.

oldtimer

A- is too generous an assessment. B would be more appropriate.

It was billed as a "budget for growth" and to demonstrate that "Britain was open for business". Yet he saddles the economy with a carbon tax based on dubious reasoning about global warming, introduces arbitrary taxes on businesses large and small without notice and presides over an economy with inflation at over double his target rate of 2% and likely to stay that way for a couple of years at least. There are selective tax breaks eg for companies with overseas earnings but, apart from tempting a few to return to London, these will do nothing for unemployment in the Midlands or the North. A few successful entrepreneurs will do well out of ultra low CGT rates but the wider investing public still faces an unindexed 28% rate, which is extortionate and hostile to long term investing. This looks like a variation of the policy to back winners on the cheap. Governments and Chancellors are notoriously unsuccessful when they try to do this.

In these circumstances it is not obvious why overseas businesses should be attracted to invest on any large scale in the UK, unless there are assets going on the cheap.

Dimoto

David Martin:

"Most electors want to see public spending at a level that will ensure effective policing, well-equipped armed forces, ready access to medical treatment, good quality education, publicly supported libraries and arts centres, etc., etc".

Have you been asleep for the past 13 years ?
That theory has been tested to destruction.
Pouring money into "public services" has been a massive failure and waste of money.

The downside of the coalition policy of taking the low-paid out of the tax net (which nobody can really argue with), is that increasing numbers are delinked from the concept of tax, accountability and responsible use of funds.

Gerald

"Most electors want to see public spending at a level that will ensure effective policing, well-equipped armed forces, ready access to medical treatment, good quality education, publicly supported libraries and arts centres, etc., etc".

Obviously true. However, there remains a hard-core right-wing rump who believe that the private sector should provide all, or rather, in practice, "nothing" to a large minority, who should be left to rot. They will never win the argument, but they make themselves heard with great regularity. One day they may die out, as did the dinosaurs!

Andy Leeds

I see the risks, but NI is a tax - plain and simple. If you combine Income Tax and NI people will realise what the true rate of taxation is. What we need is radical reform, not only of public expenditure, but also the revenue raising side. The Tax base is very narrow in reality. We need simple taxes and at low rates. Bring on a Flat Tax !

Fergus Pickering

Andy Leeds, you ignore what Lord Lawson is saying. He says don't do things that are sure to make you unpopular unless they are REALLY necessary. He says this reform is not necessary enough. As for a flat tax, are you mad? Do you want to spend years in opposition. How are you going to sell to the mass of people the idea that Fred Goodwin and Prince Charles pay the same rate of tax as they (WE, come to that) do? You may be right in some economists' ivory tower, but being right is nowhere near enough. Unless you getn rid of general elections and democratic voting. Are you up for that? Governemt of the rich. for the rich and by the rich. Naw! I don't think as a slogan it has legs.

Simon Stephenson.

David Martin : 3.34pm and Gerald : 9.31pm

"Most electors want to see public spending at a level that will ensure effective policing, well-equipped armed forces, ready access to medical treatment, good quality education, publicly supported libraries and arts centres, etc., etc".

You forgot to add the proviso:-

as long as the quality of these services is high and precise, the cost of provision reasonable, and the amount expropriated from them by way of taxation not so high that it seriously curtails them providing for their families in the way that they choose.

You see, most people are not dyed-in-the-wool socialists. They respect the view that there are some services for which it makes good sense to have public provision, but they see these services very much as the exception rather than the rule. Most people are content with a welfare system provided as a safety-net for those who, for one reason or another, are unable fully to care for themselves - but they are horrified by the thought that capable, ambitious people should be so heavily taxed as to be denied the possibility of self-determination, and forced to accept State handouts, and live according to State instructions and routines, as a natural, normal way of life.

Unlike these dyed-in-the-wool socialists, most people need the delights, the thrills, of the ups and downs that are part and parcel of building an autonomous life. They need to have their own successes, and this means that they also need to be allowed to have their own failures. Having nanny at your shoulder with the power of veto over everything you decide to do just doesn't cut it at all, and those possessed of the spontaneous creative talents by which societies progress might as well have been drowned at birth.

Robert Eve

What on earth is the problem with winners and losers?