Monday, 3 December 2012
Tax, Growth and confused Government
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.