Tuesday, 21 August 2007
Will taxes ever be cut in the UK?
As we edge close to the next recession (or Depression, depending on how much the financiers screw everything up), alarm bells are ringing in my head about the future that taxpayers face.
Public debt is at an admitted 36.4% of Government spending (let's not include all the PFI and State pensions we have not paid for, as Gordon wants us too).
The Public sector employs 5.8 million people, a near record, only beaten at the height of the last recession in 1992.
Our Chancellor thinks that money not in the government's hand is an utter waste.
Our Shadow Chancellor, George Osborne, thinks along these lines "I want to simplify taxation and move towards a lower, flatter tax system. In a mature economy like the UK, moving directly to a "pure" flat tax would not in practice be viable. That said, many of the features of flatter taxes, such as simplicity and stability, can and should be actively pursued." Not exactly shouting from the roof tops is it?
In a recession, a government following Broon and Badgerss beloved Keynesian economics, needs to spend its way out of trouble. Unfortunately, we don't have much wiggle room on the borrowing side, maybe 5% or 6%. That is only about £25-30 billion. Given government waste on expenditure too, that effect of that money will be considerably reduced.
So instead, tax rises might have to be considered to keep the Northern & Scottish Statist economies going. Yet we already employ 5.8 million public sector workers, all with fantastic pension (liabilities). So can we really increase this number and remain economically productive? It would seem unlikely. How many more Head's of Adult Services do we really need?
As for the Chancellor, not paying tax must be theft according to his new paradigmatic viewpoint. He won't stand in the way of his masters' redistributive wishes (i.e. from producers of cash to consumers of cash).
Finally, the Conservatives as quoted above, whilst making some noises about reform, really are not interested at all. They are far more concerned about getting the votes of public sector workers and the 7.95 million non-working people. This is politically a prudent strategy, as without the 14.85 million state and non-working people potentially voting for them they have very little chance of being elected.
For a taxpayer though it makes grim reading. I can't see any way in which taxes will come down in any meaningful way, despite their huge increases over the last few years.
Ouch, that hurts.
Posted by CityUnslicker