Monday 3 December 2012

Tax, Growth and confused Government

I don't really understand what is going on in the Government at the moment. For a bunch of people who aspire to be Alistair Campbell like they are doing a pretty bad job.

Let's take their latest efforts on tax. Bounced by the Select Committee into reacting to the news that big companies use legal loopholes to avoid tax, the Chancellor now rushing around declaring HMRC are to have more money and Companies WILL PAY MORE. In the Telegraph today they are discussing looking at the spending habits of peoples' wives to see if there is undeclared money being spent by the self-employed. This latter point, how Orwellian is this - your other half's spending being monitored before any sort of accusation or claim is made against you.

It all sounds good to the floating Lib Dems (how many of these are left I wonder?), but makes for no impact in real terms. How does going crazy about the tax take fuel the needed growth agenda? If it does at all, it is negatively. If you want to start up a social media company, why start in the UK when you can go to the Silicon Valley and avoid all this?

And yet the true Conservative answer would be much clearer and have a better long-term benefit. The tax code is now 11,000 pages plus thanks to years of efforts on behalf of Gordon Brown. Halving this over a 3 year period would reduce the opportunities for companies and their advisers to optimise their tax payments. Similarly for individuals, harmonising and simplifying taxes so that the self-employed did not enjoy such a massive benefit over the PAYE employees could form part of this.

So instead of shouty, populist nonsense, we could have a sensible reform proposal which also highlighted the blame for this mess that lay at Labour's door.


Demetrius said...

If you try to be too clever then you finish up both looking and feeling stupid, as Grannie used to say.

Barnacle Bill said...

Yet do we hear any laying of the blame at nuLabor's door?
It's almost as if the nuLabor years of mismanagement never existed.
Yet when is Cast Iron or Boy George going to tener cojones on this?

Anonymous said...

Honestly, I never thought that I would see a Tory Government so utterly bereft of vision.

What we've got now is a leadership that has sacrificed integrity and vision for populism.

Fuck me do they suck and suck hard...

They should be using the issue of differential tax treatments around Europe driving corporate structures as prima facie evidence to lower rates, not fucking raise them.. Jesus does the laffer curve have to come up every week in a different form without someone making the case that raising rates more often than not reduces income...

Not to mention the fact that government will never have enough money as there will always be more votes to try and buy with it...

I utterly despair as the next election will see Labour review this period of coalition and (accurately) review it as an utter utter failure, and then say right wing ideology is to blame and let's have some left wingery instead...

One quick sell out to the EU and we are well and truly fucked then...

Electro-Kevin said...

On economic growth. Would reducing the tax code not have the same effect as a tax increase ?

That said I am dismayed at the effects of this. Starbucks is probably the easiest from me to explain:

- choosing migrant workers over our own.

- not contributing tax to fund our displaced workers or the extra services required for our swelling population.

- crowding out indiginous coffee houses, the proprietors of which want to pay their share of tax to the Treasury but are put out of business for this very reason.

On what level does Starbucks work for the UK ?

Is high street coffee really that important to our economy that we are prepared to pay over and over for it ?

I'm sure that brighter contributors to this site could apply the same to Google and Amazon.

(My blog got quoted in an article in The Daily Mail today: The Reverand Wears Prada.)

Electro-Kevin said...


for (not from)

Too much Americano today. I was random drug screened and needed to provide a large sample.

Electro-Kevin said...

The Vicar Wears Prada

Anonymous said...

I do not think it's worth you getting your knickers in a twist, they have been known to turn 180 degrees, time will tell.

Anonymous said...

If the tax man had any sense they'd connect up the DVLA computers. Nowt says tax evasion (or professional criminal) like a top-range 4x4 combined with a low or zero official income.

(Yes, I know there's inheritance, gifts etc. HMRC will have to draw the big picture.)


Graeme said...

@anonymous - the Conservative Party seems to have reverted to the state it was in between 1945 and 1978. It lost the post-war election and the
centralisers got into power and started rationing things that had not been rationed during the war. when the Conservatives got back into power they cautiously denationalised a few things but, for example, did not stop bread rationing until, I believe, 1957. Cameron and Osborne are like MacMillan and co...they do not have the balls to tear up the abusive legislation of the last 15 years.

Graeme said...

- choosing migrant workers over our own. answer is the nationality profile of the Starbucks worker different from Pret a manger, Eat, Costa, Foyles, Waterstones, Pizza Hut, Travelodge, the National Theatre etc?

- not contributing tax to fund our displaced workers or the extra services required for our swelling population. answer they pay a lot of GVAT and national insurance and business rates.

- crowding out indiginous coffee houses, the proprietors of which want to pay their share of tax to the Treasury but are put out of business for this very reason. answer for each Starbucks, do you not find a Costa outfit within 50 feet, and usually a Caffe Nero outfit as well? How many such stores are being crowded out?

On what level does Starbucks work for the UK ? answer it seems to fit the UK just fine

Budgie said...

I feared that Cameron, and the Cameronesque Tories, would not be up to the job. Right from the start they should have lopped off whole departments because the alternative, trying to find economies, is very difficult to do, and fought all the way by the internal management.

What could they do? Close DfID, sell off the BBC, chop 95% of Quangos, roll NICs into IT, cut taxes, get rid of the CAGW fueled nonsense like windmills and "carbon" taxes, leave the EU, etc. Instead what do they do? - sell off all the Harriers to the USMC (so the planes can't be that useless) for a paltry £112m.

Bellend said...

EK, how can coffee shops be "indigenous" when coffee is an imported product? And why should firms hire people who aren't the best fit for the role, just because they were born here and think they're entitled to a job they can't compete for?

You're talking like a socialist, and a mong, which is the same thing.

CityUnslicker said...

I think it was Graeme, Bellend.

I would also vouch that without starbucks there would be non costa or nero's - who was it that started this coffee craze thingy?