Everyone seems very bored with the coalition, but if you look at the pre-Budget discussions, might it not be working quite well? It is surely a good thing that most senior Liberals now admit that the 50 per cent top rate of income tax is not necessarily a great idea, and that most senior Conservatives now begin to recognise that the vast amount of wealth tied up in property should not be able to avoid tax as much as it does. The Lib Dems have to confront the reality that high taxes encourage avoidance, drive away talent and, eventually, reduce revenue. The Tories have to focus on the fact that income taxes are shockingly high for the poor and that houses and land are not made to work for their owners’ living as they should. These dawning perceptions could be the basis of a constructive dialogue. Traditionally, the Budget has been treated as a box of tricks which no one but the magician (the Chancellor of the Exchequer) may inspect. Governments, therefore, have been like companies run by their finance directors: they have failed to work out what they really want to do. Slowly, the structure of the coalition is changing this for the better.
But there may well be a base reason for the way the ‘mansion tax’ is shooting into prominence. The only place in the country where the tax would really threaten a lot of people is London. There are two months to go before the mayoral election. If George Osborne announces a mansion tax in his Budget, we shall know for certain that he and David Cameron do not want Boris Johnson re-elected.
Meanwhile, the government wants to impose a new and oppressive tax on the poor — a minimum price for alcohol.