Top rate to 50, land value tax (*.*), inheritance tax reformulated on property but with a threshold reduced to 50k for other assets, basic rate back to 22 (10p restored for the gap between the current personal allowance and the annual minimum wage if and when that's affordable), mansion tax, fuel tax applied to flying, carbon tax on businesses with revenues over a million.

 

That isn't to say I don't believe in any cuts at all, I just think it's deeply unfair to finance a deficit entirely from the hardest hit. The irony being that I legitimately believe we should all be in it together, but that that approach shouldn't be five men on a ladder out of the sea and 'all in it together' being the man at the top saying everyone should take a step down.

Ah, a land value tax. The dream of Liberals for as long as I can remember.

How many of those Liberals are still in the party?

How many of those Liberals are still in the party?

Who knows? :(

Top rate to 50, land value tax (*.*), inheritance tax reformulated on property but with a threshold reduced to 50k for other assets, basic rate back to 22 (10p restored for the gap between the current personal allowance and the annual minimum wage if and when that's affordable), mansion tax, fuel tax applied to flying, carbon tax on businesses with revenues over a million.

I agree with most of these, but imo there's a cat's chance in hell of most of these things happening while Ed Balls is in position. Just look at his reaction to Harriet Harman daring to suggest people on middle incomes should pay more taxes.

Edited July 17, 201411 yr by Danny

A. She didn't. B. He would never show his hand beforehand if he were going to do that.

Of course, most of the deficit would be eradicated if rich people just paid the taxes they owe even with tax rates as they already are. But they're only going to be shamed into paying their fair share once public anger is whipped up against them, and (although I'm sure you'll disagree), Labour are completely failing in their responsibility to stand up and point the finger of blame at them and instead are allowing the void to be filled by right-wingers' arguments that the problems have all been caused by benefit-claimants, immigrants, public-sector workers, etc.

A. She didn't. B. He would never show his hand beforehand if he were going to do that.

 

What's "beforehand"? Before the election?

 

This is what I don't understand about the people who keep parrotting how Labour needs to be "credible". They genuinely seem to be arguing that Labour should slash the deficit, yet that public services will not decline and taxes will not go up. On what planet is that credible and realistic?

Of course, most of the deficit would be eradicated if rich people just paid the taxes they owe even with tax rates as they already are. But they're only going to be shamed into paying their fair share once public anger is whipped up against them, and (although I'm sure you'll disagree), Labour are completely failing in their responsibility to stand up and point the finger of blame at them and instead are allowing the void to be filled by right-wingers' arguments that the problems have all been caused by benefit-claimants, immigrants, public-sector workers, etc.

It's only really possible to fulfil that kind of responsibility once in power, otherwise those with the funds will do everything in their power to ensure you don't get there to begin with.

Of course, most of the deficit would be eradicated if rich people just paid the taxes they owe even with tax rates as they already are. But they're only going to be shamed into paying their fair share once public anger is whipped up against them, and (although I'm sure you'll disagree), Labour are completely failing in their responsibility to stand up and point the finger of blame at them and instead are allowing the void to be filled by right-wingers' arguments that the problems have all been caused by benefit-claimants, immigrants, public-sector workers, etc.

I think opinion is moving in the right direction. For a long time the general attitude towards people who used various dodgy schemes to reduce their tax bill was "good on you". Now more people realise that the tax has to be paid by somebody and that the inevitable consequence of the wealthiest avoiding tax is that the rest of us pay more.

It's only really possible to fulfil that kind of responsibility once in power, otherwise those with the funds will do everything in their power to ensure you don't get there to begin with.

 

No, you can't do anything about it in power. I'm not talking about some legislation, because it's impossible to legalise away tax avoidance in this world of tax havens. I'm talking about piling social pressure on them and getting normal people to feel outraged about it to try and force these people to pay up. If anything it's more possible to do that when you're not in power, in the way UKIP have done so effectively in whipping up public outrage at immigrants and the Daily Mail and co have done for benefit-claimants.

It's only really possible to fulfil that kind of responsibility once in power, otherwise those with the funds will do everything in their power to ensure you don't get there to begin with.

But Labour were in power for 13 years. They didn't do anything like enough to make sure that the wealthiest paid their way. They were too timid to shift the burden of taxation towards the people who could pay it without noticing the difference because they were too frightened of the opposition from the Daily Mail.

What's "beforehand"? Before the election?

Possibly - the public doesn't tend to like it when they have to pay for anything, be it increased spending or a deficit (the increase in NHS spending in 2002 was remarkable for that very reason as the only instance of a popular tax increase).

 

But even if Ed does decide he wants tax increases and does decide he wants to announce them before the election, he isn't going to want it trailed for eight months beforehand to give the Tories a chance to unrelentingly hammer Labour on 'tax bombshells' and give those with the cash enough time to funnel huge amounts of funds to them. Particularly because after eight months of hammering on 'tax bombshells!' in all likelihood everyone but hardcore Labour voters will decide they'd much rather have welfare slashed even more instead.

 

(On the topic, yes, tax avoidance is something that needs cracking down on, but it's a bit of a panacaea. It's only about £28bn that the HMRC estimates in total - a very big amount, but nowhere near the £190bn the likes of Tax Research UK scream their heads off about on the basis of very dodgy estimations of what passes for avoidance, double counting and outright miscounting.)

 

This is what I don't understand about the people who keep parrotting how Labour needs to be "credible". They genuinely seem to be arguing that Labour should slash the deficit, yet that public services will not decline and taxes will not go up. On what planet is that credible and realistic?

Well we've seen before that it is possible for reform to deliver better results than before (take the academies programme for one, where over three quarters of schools failing under local authority control now perform better as academies). Obviously I think it should go hand in hand with some tax increases, but public provision isn't as simple a formula as 'performance = money'.

But Labour were in power for 13 years. They didn't do anything like enough to make sure that the wealthiest paid their way.

It didn't help that for ten years of those thirteen New Labour thought it had cracked the code of eternal wealth, growth and prosperity. The pressure wasn't there to do so.

I think opinion is moving in the right direction. For a long time the general attitude towards people who used various dodgy schemes to reduce their tax bill was "good on you". Now more people realise that the tax has to be paid by somebody and that the inevitable consequence of the wealthiest avoiding tax is that the rest of us pay more.

 

I do agree it's moving in the right direction (even in Daily Mail comments sections, amidst the sea of anti-EU/immigrant/BBC bile, you often get people complaining about rich people and how they feel they're "above" paying taxes), but it's still not at the forefront of people's minds, imo because the average person rarely hears the argument being made by people in the public eye.

Aside: I've done a quick search and so far as I can tell Ed Balls hasn't actually said anything about the Harriet Harman thing?

No, you can't do anything about it in power. I'm not talking about some legislation, because it's impossible to legalise away tax avoidance in this world of tax havens. I'm talking about piling social pressure on them and getting normal people to feel outraged about it to try and force these people to pay up. If anything it's more possible to do that when you're not in power, in the way UKIP have done so effectively in whipping up public outrage at immigrants and the Daily Mail and co have done for benefit-claimants.

Public outrage doesn't really do much for a lot of these people - did you see bankers suddenly bathing in shame? The likes of Goodwin had to be forced to hand back bonuses or stripped of knighthoods. They don't respond to outrage with humility, they respond to outrage by writing a cheque for the Tories. The only way you can do anything about it is from power - it needs international co-ordination to close off these loopholes and havens.

But even if Ed does decide he wants tax increases and does decide he wants to announce them before the election, he isn't going to want it trailed for eight months beforehand to give the Tories a chance to unrelentingly hammer Labour on 'tax bombshells' and give those with the cash enough time to funnel huge amounts of funds to them. Particularly because after eight months of hammering on 'tax bombshells!' in all likelihood everyone but hardcore Labour voters will decide they'd much rather have welfare slashed even more instead.

 

That would be a disastrous approach imo - springing it on people at the last minute before people can digest the details would just make people lean more towards thinking it was a bad idea. And if they didn't explain tax rises at all, again I have to come back to how would it be credible for Labour to argue that the deficit would be eradicated, but taxes and public services would stay the same? In that scenario, the Tories' scare stories about how horrific it would be under Labour would have more credibility, simply because it would be obvious that Labour weren't being truthful about SOMETHING because what they were promising just wouldn't add up.

 

 

Public outrage doesn't really do much for a lot of these people - did you see bankers suddenly bathing in shame? The likes of Goodwin had to be forced to hand back bonuses or stripped of knighthoods. They don't respond to outrage with humility, they respond to outrage by writing a cheque for the Tories. The only way you can do anything about it is from power - it needs international co-ordination to close off these loopholes and havens.

 

Actually, yes - the year after public disgust at bankers' bonuses peaked in 2012 after the RBS boss or someone awarded themselves a huge fat bonus, bonuses the following year were actually significantly lower. Similarly, look at all the celebrities who have been shamed into paying up after their tax-avoidance schemes being exposed.

 

A lot of these people who we're talking about love their social statuses, and being treated as pariahs by their friends and neighbours WOULD knock some sense into a lot of them. The power of the "lynch mob" is much greater in the long run than any government legislation.

Edited July 17, 201411 yr by Danny

Did disgust at bonuses peak in 2012? I'm sure a lot of that went down near the beginning of 2011.

 

Out of interest (I'm sure Suedey would know this), are bonuses treated any differently to standard income under tax? If so, the lowering of the top rate to 45p for 2012 could possibly account for some of that as money which was paid in bonuses to escape 50p then goes back to standard salary.

Bonuses are taxed as income so yes, some people will have had their bonus deferred for a year to reduces the amount of tax due. Similarly, some people were able to bring their income forward so that it was paid before the rate went up from 40% to 50%. That is why it is not possible to claim (as Osborne inevitably does) that the 50% rate did not raise a significant amount.