Fiscal crises are actually a good time to take a strategic look at the tax system. While the books are being balanced, and some taxes increased to help do so, it makes sense to step back and think about where we want the burdens in the system to fall most heavily.
So this week’s budget was the coalition’s chance for boldness. Some think it does look set to be a radical budget, relatively speaking. But I can’t help thinking that – if the leaks provide an accurate picture – George Osborne might be ducking out and playing it safe.
Just think what this budget could have done. The Liberal Democrats were pushing for the immediate raising of the income tax personal allowance to £10,000. A few Tories agreed, but more wanted the 50p rate scrapped.
If Osborne had been being radical, he could have done both of these things immediately, paid for by taxes on expensive properties, further increases in taxes on capital gains and measures to crack down on the well-known specific instances of tax avoidance.
If he had done so, this week’s budget would have been a multi-billion pound shift in the tax system, both from taxing income to taxing wealth and, overall, shifting the burden further onto the wealthiest and off the poorest.
From media reports, it seems clear that the impediment to such boldness was actually the prime minister himself, who doesn’t like the idea of wealth taxes like a mansion tax, which actually George Osborne is quite open to.
So don’t let it be said that it’s the Liberal Democrats in the coalition who are impeding radicalism.
This budget does look set to do some fairly big things. But on taxation in particular, it looks like the coalition is failing to turn the fiscal crisis into an opportunity.
It seems like a caricature, but the Tories are living up to their image as giving tax cuts to the rich and helping big business.
The Lib Dem approach is totally different – seeking to redistribute to the less well off, being pragmatic about how best to create wealth, and being opposed to protecting the interests of the already rich.
I’m reasonably content that in this coalition the Lib Dems have set out what they believe. I have some confidence that the public will understand which budget policies come from which coalition party.
“The Lib Dem approach is totally different – seeking to redistribute to the less well off,.. … and being opposed to protecting the interests of the already rich.
”
Utter rubbish. The Labour Party was formed because the Liberals said they would look after the poor, but when in power they pandered to the rich and powerful. The Old Labour movement was the only one that stood up to big business and redistributed the wealth, despite claims it would destroy businesses and entrepreneurism.
And why weren’t these holy cows of the right decimated, as industry and jobs were in the 1980’s and on; because despite higher taxes for the rich, despite higher costs to businesses, the extra money that went into the pockets of the working class was spent, not hoarded thus offsetting the costs to business in increased sales and profits.
“I’m reasonably content that in this coalition the Lib Dems have set out what they believe.”
Do you mean the things such as ‘no’ to increasing University fees?
Let’s face it, the working and not-so-working class has no effective opposition, no party that will stand up for them against the rich and powerful and New Labour is by turns as right wing as the Tories and as wishy-washy as the Lib Dems. But looking at what is happening in the country and reading folks opinions on various forums and comments online, I have seen a definite change in focus, from agreeing that the only way to solve this country’s issues is by control of the money supply to a belief in people before profits. This thinking is not restricted to die-hard socialists such as myself; read:
http://www.businessinsider.com/rich-people-do-not-create-jobs-2011-12#comments
file:///D:/Users/Paul/Documents/capitalists%20against%20capitalism.htm
http://www.telegraph.co.uk/news/politics/8655106/Im-starting-to-think-that-the-Left-might-actually-be-right.html
The winds of change are blowing that may well leave all three major parties out in the cold.
Sorry- second link should have been-
http://www.guardian.co.uk/commentisfree/2011/aug/21/ed-miliband-capitalism-rightwing-critics