Taxing the rich

I will let you into a well kept secret. Each time Conservatives have cut the top rates of Income Tax or taxes on wealth the rich have paid more tax.

When Margaret Thatcher and Nigel Lawson in budgets cut the top rate of Income Tax from 83% to 40% there were howls of protest from Labour about a loss of revenue and the moral outrage. Instead the better off paid more tax in cash terms. They paid more tax in real terms after allowing for inflation. They paid a bigger percentage of total Income Tax.

How? More rich people came here or stayed here. More kept Income and wealth here to tax. More worked harder to earn more, and more took risks with their money to set up businesses and create more jobs which in turn produced bigger dividends. It was a win win for all.

The same thing happened when George Osborne cut the top rate of tax from 50% to 45%. Lib Dems in the Coalition blocked more tax raising rate cuts. With labour they want taxes to penalise success and deter risk taking.

Corbyn’s UK were he to become PM would be a hostile place for business builders, risk takers and hard workers with good earnings. Jealousy is not a good emotion at the best of times. It is a dreadful basis for an economic policy. We need to get tax rates down.Not only will more people be more successful but there will also be more tax revenue for schools and hospitals. Labour’s launch was unusual with its lists of people and roles they want to bash.

This entry was posted in Uncategorized. Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

169 Comments

  1. Sir Jow Soap
    Posted November 3, 2019 at 5:33 am | Permalink

    BXP and your party are at one on all of this. You won’t lose or gain any votes because you have a different tax policy.

    The Brexit thing is where you have work to do.

    • Peter
      Posted November 3, 2019 at 12:29 pm | Permalink

      They do not want you to look too closely at ‘the Brexit thing’.

      Boris has an ‘oven ready’ version waiting to go in the microwave.

      Unfortunately Nigel will be asking lots of questions about the ingredients and health implications in the coming weeks.

      Other issues will be a useful diversion.

      Our prospective Conservative had to be asked about Brexit. She thought she could get away with ‘clean air, better transport, thriving High Streets, cutting crime’.

      She has now admitted on her website, in small print, that she will be supporting the Boris Deal. She wants it out of the way so she can go back to talking about health, education and crime. In other words don’t look too closely at the details ‘it’s a good deal’.

    • Richard
      Posted November 3, 2019 at 6:35 pm | Permalink

      A bit unfair on Sir John, who has consistently said we should simply table an FTA and propose an Article 24 GATT standstill – and just leave with the 50 ‘no deal’ mini deals on offer. http://johnredwoodsdiary.com/2019/09/27/undermining-the-uks-bargaining-position/#comment-1059058

      JR’s article is a nice simple explanation of the fundamental flaw in Lib/Lab higher tax proposals:- “that the UK may now be on the wrong side of the aggregate Laffer curve.” http://johnredwoodsdiary.com/2018/08/09/tax-rises-do-economic-and-political-damage/#comment-953485

  2. Lifelogic
    Posted November 3, 2019 at 6:00 am | Permalink

    Exactly and the other way to get them to pay more into the system is to encourage more people to make private provision for their own healthcare, schooling, universities, pensions, old age care ….. this by giving suitable tax breaks or education vouchers to encourage more people or their companies to do so.

    • Hope
      Posted November 3, 2019 at 10:29 am | Permalink

      Public services will never catch up with mass immigration. Migrant Watch has already given a projection of birth rates as a consequence based on existing numbers. UN migration pact now comes into play. Mayhab signed this as one of her left wing uncosted acts and contrary to three election promises.

      Johnson announces benefits rises today from his left wing spending spree! What a draw, that will help. I am waiting for the demntia tax to be sneaked back in.

      • Cheshire Girl
        Posted November 3, 2019 at 4:42 pm | Permalink

        No wonder half the world wants to get here. The news has quickly spread about our generous benefits system. It is well known, that if you can get to the UK, you can get onto the benefits without having paid a penny in.

        This latest news will just encourage more, but the Politicians don’t mind, as long as they can waffle on about us being the most tolerant, outward looking, and diverse country in Europe, (or is it the World. )

      • Lifelogic
        Posted November 3, 2019 at 6:49 pm | Permalink

        Indeed endless high & complex taxes, expensive energy, incompetent and second rate public services, daft regulations and restrictions, idiotic & restrictive employment laws and then ministers complain about poor productivity!

        Just look in the mirror for the cause of this all those Hammond types.

  3. Stephen Redfern
    Posted November 3, 2019 at 6:26 am | Permalink

    I me a young neighbor for the first time recently. She is French, from a highly taxed country, and she said that she found the taxes working in the UK are very high when the NI, pension and her husband’s student loan were included. Add in Vat, duty, fuel tax, and the stamp duty when they bought their ridiculously expensive flat and most of what they earn goes to the state, to pay for waste such as high public pensions and planters stuck in roads.

    • Lifelogic
      Posted November 3, 2019 at 8:58 am | Permalink

      Indeed. Tax borrow and piss down the drain is all we got from Cameron, Osborne, May and Hammond still at least three of them have now gone.

      • APL
        Posted November 3, 2019 at 8:15 pm | Permalink

        “still at least three of them have now gone.”

        But they’ve left their debts behind.

    • roger
      Posted November 3, 2019 at 2:56 pm | Permalink

      Not all planters are paid for and maintained by the State.
      Here in our hamlet in tax absorbent Scotland, the State has more important ne’erdowells and prodigious numbers of registered disabled to support, rather than the environment, and it falls to my wife at the east end and another lady at the west end to fund and maintain the display under the village names.
      The task is rendered less onerous by the adjacent large and relatively deep potholes, which for most of the year provide a welcome source of water that may be baled out and over the thirsty plants.
      Of the aphorism that necessity is the mother of invention their is no doubt, as we in Scotland are compelled to prove on a regular basis.

      • roger
        Posted November 3, 2019 at 2:58 pm | Permalink

        there not their. Grrrrr!

      • steve
        Posted November 3, 2019 at 8:22 pm | Permalink

        Roger

        “Of the aphorism that necessity is the mother of invention their is no doubt, as we in Scotland are compelled to prove on a regular basis.”

        ……keep those skills, you’re going to need them because things will get a whole lot worse before they get better.

        Shamefully too many people down here got suckered into wasteful consumerism, and don’t know one end of a spanner from the other.

        I’m lucky to be of the generation that had no choice but to innovate, mend, and make do. Moreover we don’t spend beyond our means.

        Accordingly I share your sentiment.

    • margaret howard
      Posted November 3, 2019 at 6:16 pm | Permalink

      Stephen Redfern

      ” she said that she found the taxes working in the UK are very high when the NI, pension and her husband’s student loan were included”

      Her husband’s student loan? How many people are affected by that?

      • Edward2
        Posted November 3, 2019 at 10:29 pm | Permalink

        Why are you puzzled Margaret?
        People study in their 20s 30s 40s and even older.
        Student loan repayments impact lots of different people’s budgets.
        And their ability to get loans for homes.

      • Stephen Refern
        Posted November 4, 2019 at 12:35 am | Permalink

        Most successful students taking useful degrees. I see Mr Farage has included 0% interest on loans because government can borrow at 1% and 6% is unfair. Also, getting rid of the House of Lords. I will vote for these measures.

      • a-tracy
        Posted November 4, 2019 at 2:20 pm | Permalink

        “Currently more than £16 billion is loaned to around one million students in England each year. The value of outstanding loans at the end of March 2019 reached £121 billion.” Research briefings parliament UK

  4. Lifelogic
    Posted November 3, 2019 at 6:27 am | Permalink

    Now that we are into a pre-election period the Tories true to form have started their “we are tax cutting Conservatives” mode for just the six weeks one assumes. Even Gove, who inflicted the appalling Theresa May onto the nation and even wanted to put VAT on schools fees. This alone a tax increase of circa £24k PA for some families plus economic and educational vandalism too.

    But Hammond and Osborne have over the last 8 years given us the highest taxes for 40+ years, abolished child benefits and personal allowances for many, robbed pension pots, landlords (and this tenants) and home movers, ratted on their £1m IHT tax promise and even planned a further IHT tax in probate fees. Why on earth would anyone trust this party to cut taxes? They need to stop endlessly pissing money down the drain first to be able to cut taxes.

    There is endless fat to be cut everywhere you look in the state sector (the state sector is 150% better remunerated than the private sector and produces very little of real value). Start with HS2, all the bonkers green crap subsidies, the government propaganda budgets, all the damaging red tape, the over complex taxation (the duplication on income tax and NI for example), the total misdirection of police forces, the criminal judice systems, the litigation culture, the dire NHS monopoly, the many worthless degrees costing 50k + ….

    If they want to be taken remotely seriously they need to make very specific promises and keep them for a change. When exactly will we get the £1 m each IHT promises, what proportion of GDP will the Boris government spend (largely waste) what proportion of GDP will be raised in taxes? GDP will after all become far, far higher if they cut taxes, cut tax complexity, cut the endless government waste, cut red tape and go for cheap and reliable energy.

    • acorn
      Posted November 3, 2019 at 5:52 pm | Permalink

      LL, your regular daily repetive rant, came up with a mod’ today, “(the duplication on income tax and NI for example)”.

      Combining income tax and national insurance into a single “payroll tax”, would be a major, relatively simple tax modification. It would reduce SME payroll costs and increase employees understanding of their paychecks.

      National Insurance hasn’t covered social costs for several decades. All taxation goes into the “Consolidated Fund”, (one of the four primary Treasury accounts) where it is disconnected from any particular spending channel.

      • NickC
        Posted November 4, 2019 at 1:02 pm | Permalink

        Acorn, It’s no more repetitive than Remains sneering at the electorate for voting Leave, and then sneering at the 2016 Referendum, yet demanding another referendum with an electorate just as thick as you pretend the 2016 electorate was.

      • a-tracy
        Posted November 4, 2019 at 2:46 pm | Permalink

        acorn: “Combining income tax and national insurance into a single “payroll tax”, would be a major, relatively simple tax modification. It would reduce SME payroll costs and increase employees understanding of their paychecks.”

        NO IT WOULDN’T – the software already exists for separate tax and NI, it would reduce no SME payroll costs at all.

        I should know I have processed payroll costs for over thirty years and had to pay for every software change!

        I also think employees are more than capable of understanding the two taxes, they just don’t appreciate the payment of employer’s NI and the employers contribution to their NEST at 15.8% nearly 16% of pay over the lower earnings level.

        “National Insurance hasn’t covered social costs for several decades.” It doesn’t cover all social costs but the politicians have told us it does. Remember Brown’s ‘NHS lifeline’ in 2002 specifically an extra 1% employee and 1% employer National Insurance increase “£40bn of extra funding into the health infrastructure over the next five years.
        It will be paid for by increased national insurance contributions from both companies and employees” Guardian

        I personally find it disgusting that governments, of all hues, have tried to disconnect national insurance from the purpose it was set up for.

    • hefner
      Posted November 3, 2019 at 6:19 pm | Permalink

      So from your £24k figure I have to understand that you pay £120k in school fees. Lucky you. How many, even on this blog, are paying a similar amount? You also pay, as a non-Dom, the fixed amount, which I understand from HMRC website to be a way for you not to have to declare your true income to HMRC. Again how many people on this blog are in the same situation. Very good for you to get by with this type of money.
      I would just expect a bit less of your fluff day in day out. Particularly your difficulties at getting more cheap loans from the banks. After all I really have difficulties not to burst laughing when you write of your BTL activities almost as “a public service”.

      • Edward2
        Posted November 3, 2019 at 10:33 pm | Permalink

        How do you get to that figure of £120k in school fees Hefner?
        I’ve read and reread Lifelogics post and cannot understand your logic.

        • hefner
          Posted November 4, 2019 at 8:47 am | Permalink

          Michael Gove was proposing a 20% VAT on private school fees.

          • Edward2
            Posted November 4, 2019 at 4:54 pm | Permalink

            How is that relevant?

          • hefner
            Posted November 5, 2019 at 1:53 pm | Permalink

            OK, I’ll spell it for you: LL wrote « Theresa May wanted to put VAT on school fees » then « This alone a tax of circa £24k PA for some families ». LL in some previous comments told us he has three children, so VAT on school fees (a la Michael Gove) would increase the total of school fees by £24k per year (PA, per annum). Given that Gove proposed a 20% VAT it means that his VAT-free school fees per year are £120k. Which is quite possible for three children in top-notch private schools.
            Basic arithmetic, I would think.
            Funny that you cannot understand my logic but never question LL’s.

      • Narrow Shoulders
        Posted November 4, 2019 at 7:51 am | Permalink

        7 years, £17K per year doesn’t seem too much of a stretch @hef.

        And that is £35K saved for the hard pressed taxpayer in that period too.

        • hefner
          Posted November 4, 2019 at 2:09 pm | Permalink

          Sorry, I cannot make sense of your comment: what are your 7 years all about? the length of primary, secondary education? LL was quoting £24k per annum.

        • a-tracy
          Posted November 4, 2019 at 2:50 pm | Permalink

          This represents £4,700 per pupil at primary school and £6,200 per pupil at secondary school. 2018

          So over 7 years (3 years primary/4 years secondary) it saves the State approx (2019 approx) £40,000 – (7 years 11 -18 secondary) £45,000

    • Hope
      Posted November 3, 2019 at 6:31 pm | Permalink

      Child benefit still claimed by EU citizens for children who have never set foot her. Cameron was,going to stop that. He lied to say he reformed the EU but forgot that point! It still carries on under the “fantastic” “oven ready”Johnson servitude plan which can be ready in twenty minutes!, is that correct JR?

      • Narrow Shoulders
        Posted November 4, 2019 at 7:53 am | Permalink

        Child benefit should be for all (in this country only) or for none. Scrap the £50K cap. In London that is not a lot of money.

        • Fred H
          Posted November 4, 2019 at 2:57 pm | Permalink

          working and living in the London area, £50k income is just about managing. Those with a mortgage will not be managing.

        • dixie
          Posted November 5, 2019 at 6:36 am | Permalink

          We moved out of London in the 80’s specifically to be able afford a house and children. Cost of living has always been high in London and is no different now though the multiplier may be higher.

          If you want children or property then move to somewhere you can afford, life is a set of choices and people shouldn’t expect others to pay for theirs.

  5. Posted November 3, 2019 at 6:44 am | Permalink

    I do hope that the betting is wrong and that the Conservatives are elected.

    • Dame Rita Webb QC
      Posted November 3, 2019 at 9:53 am | Permalink

      Why it will just be a continuation of the road to nowhere that we have been on since 2010. There is nothing radical about Boris and it’s reflected in his sell out deal

  6. oldtimer
    Posted November 3, 2019 at 6:50 am | Permalink

    This topic was not at the forefront of the minds of two canvassers for Mr Dominic Grieve who knocked on my door on Saturday seeking my vote on his behalf. They left disappointed and in no doubt about my views on him and his behaviour.

    • Peter Wood
      Posted November 3, 2019 at 9:08 am | Permalink

      Well done OT; Grieve was mine too.

      The question arising though is: is BJ just as bad as T. May? How he can call her WA a ‘turd’, then simply remove a couple of onerous clauses, that the EU didn’t much care about anyway, and then call it a ‘fantastic NEW deal’ is, beyond my patience. This is indicative of the character of the arrogant, self-entitled PCP member that we want gone.

      BJ better change his stance on his newly polished ‘turd’, or he’s going to lose my vote.

    • steve
      Posted November 3, 2019 at 4:22 pm | Permalink

      oldtimer

      I reword my original reply, which was deleted.

      Should Mr Grieve have visited here, knocking on my door would not be in his interest, and for me Christmas would have come early. I”d certainly have a few strong words for him.

      Then again we don’t have door to door political party canvassers in this area, they judge the activity to be a risky business. It never occurs to them they might be getting something wrong and why we loathe them so much.

      • Mark B
        Posted November 4, 2019 at 6:56 am | Permalink

        Steve

        One solution is to move from Representative Democracy too Direct Democracy. We the people make the bid decisions and they are freed from the responsibility.

  7. Shirley
    Posted November 3, 2019 at 6:54 am | Permalink

    It matters not one iota what policies you promote if party manifestos cannot be trusted and promises not upheld. LibLabCon parties and most of their representatives lied to the electorate in order to get elected. Some may fall for the lies (again) but many won’t.

    How are you going to fund the big spend if we are still paying the EU for the privilege of being one of their best customers and still restricted by their rules? What will change? Anything?

  8. agricola
    Posted November 3, 2019 at 7:01 am | Permalink

    The top 1% of earners pay around 27% of all income tax paid I believe. They are also likeley to pay much more in stamp duty (SD) as the value of the properties they buy are likely to greater than average. SD is a form of double taxation. Tax on income that has already been taxed. Anyone with assets of I believe around £375,000 on death pays I think 40% in death duty. This can be dodged but I see it as a criminal tax on those in mourning, utterly despicable. While this is a reallity for the frugal, everyone else is hit with the tax on nett income called VAT, yet another form of double taxation.

    I recognise that some taxation is necessary, for defence, law and order, the NHS, I question much of what government feels it has the right to spend in our name,much of which is total waste. Government fails miserably to look after those in real need, veterans who have fallen through the net, the mentally ill, and the elderly in need of end of life care. Government relies upon the charitable donations of individuals who recognise the failure of government and donate. Air ambulances and lifeboats should be a national service paid wholly by government and not subject to the begging bowl.

    Meanwhile government sees fit to splash money on virtue seeking projects like HS2 and it’s siblings, chinese overpriced atomic energy, and overseas aid at the level it is.

    Government fawns and bows at the feet of climate extinction, so normal life is blocked while this mob indulge themselves. HMRC should be investigating the participants and all those noisy flag wavers outside Parliament. I am sure they have not sacrificed their break on the Costas just to be there. Likewise the anti fracking nimbys who government have just surrendered to. I lived in that part of the UK in the 50/60’s and experienced some detectable earth tremors before fracking was invented.
    Has dumbo government ever differentiated natural earth tremors from fracked ones, I doubt it. As with CO2 they prefer the panic reaction, while starving our industry and population of cheap energy. That is what you get from virtue seeking professional politicians.

    The size and insanity of our tax system comes from too much government. There is no differentiation between essential government services and virtue seeking projects. One thing you can however be sure of is that anything government does will exceed it’s budget mostly because government cannot either calculate a budget or manage it, which all accounts for our excessive taxation. It is there to cover incompetent over runs.

    • agricola
      Posted November 3, 2019 at 3:59 pm | Permalink

      I think you have had this more than long enough to get it moderated.

  9. Mark B
    Posted November 3, 2019 at 7:06 am | Permalink

    Good morning.

    I will let you into a well kept secret. Each time Conservatives have cut the top rates of Income Tax or taxes on wealth the rich have paid more tax.

    And each time they have raised other little hidden taxes and cut various benefits. A tax on buying a home. A tax on renting. A tax on insurance. A tax on energy, and so on. We are paying more taxes than before. We are also borrowing still despite, more people in the UK and despite the rich paying more.

    Labour’s strategy is twofold. First, it seeks power through the politics of envy. Secondly, its tax aims are designed not to punish the rich and successful but, to drive them out. This is because when you drive out the competition all you have is the State. And what they State giveth, the State can taketh away !

    Corporates love Socialism. They especially love Socialism under the EU / EEA and the Four Freedoms. The freedom to move money and capital to more favourable EEA tax regimes is known, as is the freedom of labour which dives down wages. Corporates also love big State projects. Projects that help their profits and share price.

    So when you take into account some of the above you have to ask yourself; “If I want to vote for a low spend, low tax government, who do I vote for since there is no Conservative Party that I recognise standing ?”

    • Hope
      Posted November 3, 2019 at 6:35 pm | Permalink

      ‘Obligation to the environment’ hidden everyone’s energy bill. Wait until zero carbon kicks in! Sugar tax, plastic bag tax etc etc.

    • a-tracy
      Posted November 4, 2019 at 5:11 pm | Permalink

      You missed Hammonds 2016 tax grab on Dividends. The Tories allowed themselves to be painted by Labour as the tax choice of business owners but Hammond did a sneaky Corporation Tax reduction grab back.

  10. Cheshire Girl
    Posted November 3, 2019 at 7:12 am | Permalink

    I worry that it wont just be the ‘rich’ who are bashed, but the middle classes, or those who have come into money through a family bereavement. I am paying a lot of tax under the Conservatives, and there is no lawful way to avoid it.

    The thought of Labour getting in, with its greedy eyes on my money, earned and saved by a lifetime of hard work ( started work at 15) appalls me. I think there will be a wholesale exodus from the UK, for those who can afford to go.

    • steve
      Posted November 3, 2019 at 10:04 am | Permalink

      Cheshire girl

      “I worry that it wont just be the ‘rich’ who are bashed, but the middle classes, or those who have come into money through a family bereavement”

      Indeed so. They’ll go after anyone who owns anything. They can’t stand the fact that you might own a car, have savings, and the biggest hate of theirs that you might own a house.

    • a-tracy
      Posted November 3, 2019 at 10:29 am | Permalink

      I agree CG. The rich won’t be here to bash, it will be those earning from £30-60,000 as usual. But remember it was the Conservative chancellors that put up dividend taxes 2016 7.5% and 32.5% upper rate, 6%+ taxes on student loans 2012, VAT from 15-17.5% in 1991 and 17.5% to 20% 2011, insurance premium tax 1993 Ken Clarke. Labour are just more open about wanting to tax you till your pips squeak. They also have to gift their Union paymasters, Pilgrims, people in the clique.

      It’s ironic that the punishing pension conditions installed by Labour but not removed by the Tories for Private pension holders only are affecting high up Consultants with private pension pots who I read in the Mirror are now downing tools when their pots are maxed out and this is affecting breast cancer screening. The only reason the Union puppet Labour Party did this is that the majority of their public payroll supporters are still on defined benefit State pensions without pots.

    • margaret howard
      Posted November 3, 2019 at 6:12 pm | Permalink

      Cheshire Girl

      “with its greedy eyes on my money, earned and saved by a lifetime of hard work ( started work at 15) appalls me”

      But you say that your extra money came through ‘family bereavement’ – in other words ‘unearned income’.

      Many of us would wish to give some of this unearned money to help the less fortunate among us rather than foreign holidays or big car/houses. Society has become far too greedy.

      • Edward2
        Posted November 3, 2019 at 9:38 pm | Permalink

        Depends whether you think all the money a citizen has accumulated should be sequestrated by the State.
        At what point should the individual be able to keep something for himself or herself and pass it onto their family and friends?
        Bear in mind all the accumulated wealth is already tax paid.

      • Cheshire Girl
        Posted November 3, 2019 at 10:22 pm | Permalink

        ‘unearned income ‘by me perhaps, but not from my hard working Husband, who died last year. Also the taxman doesn’t differentiate between what my Husband had, and what money I earned. They tax the lot!

        I also donate to charities, and don’t take foreign holidays. It is not for any Government to tell me I don’t deserve this money. They take it and pour it down the drain on their vanity projects.

        • margaret howard
          Posted November 5, 2019 at 10:50 pm | Permalink

          Cheshire Girl

          Sorry about your loss. I didn’t mean that any money left by a deceased spouse should be taxed as ‘unearned income’. It is most unfair.

    • Addanc
      Posted November 3, 2019 at 8:30 pm | Permalink

      Don’t forget that the Conservatives are also responsible for undermining the flexible work market with their moronic IR35 changes. Pro-business? I don’t think so.

      • Mark B
        Posted November 4, 2019 at 6:52 am | Permalink

        IR35 Is used to stifle SME’s. SME’s benefit most from a flexible labour force as they can bring in labour as their workflows fluctuate more wildly and they cannot so easily carry dead wood.

  11. Sea Warrior
    Posted November 3, 2019 at 7:20 am | Permalink

    The ‘well kept secret’ has been too well kept, isn’t it? Not everyone spends a couple of hours each day watching BBC Parliament. It’s been a failure of Conservative campaigning that too little Labour lunacy has been comprehensively attacked. This is something that needs doing as a matter of urgency now – and then continued after the election.

    • Posted November 3, 2019 at 9:08 am | Permalink

      I should have thought the one way to ‘wake up’ staunch and otherwise immovable Labour voters would be to make sure they understand that THEIR hard-earned money and savings are at risk from a Labour government at this time, and not just that of the ”rich”. Money talks, there’s no doubt about that, more loudly than political persuasion, I’d have thought. Perhaps even the deafest Labour supporters might listen if they can be persuaded that the risks to them PERSONALLY are real, even if they’re not ”rich”.
      The BXP might do this successfully.

  12. Lifelogic
    Posted November 3, 2019 at 7:32 am | Permalink

    Conversely – should the dire Corbyn/McDonnall/SNP get elected and “ask the rich to pay a little more in tax” (as they dishonestly tend to put it) they will find they will raise far less. The rich will leave, work less hard, employ fewer people, cut investment, find other ways round the taxes, invest it elsewhere, send their children to state schools or schools over sea …. so all their dishonest magic money tree promises and confiscatory (theft of others assets) policies will fail as we head for a bankrupt Venezuelan style economy.

    Others will doubtless just work on the, cash in hand, black market.

    • Turboterrier
      Posted November 3, 2019 at 5:56 pm | Permalink

      LL

      The rich will leave. Too true just like the night of the Scottish Independence vote . Billions flowed out of the country that night on the push of a button. I had six client’s that had already purchased properties south of the border. Funny thing is they still own them. I wonder why. Scottish income tax I ask myself?

      • hefner
        Posted November 6, 2019 at 1:24 pm | Permalink

        No, capital might go elsewhere but the « rich » despite their threats tend to stay put.
        Before Mitterand came to power in 1981 France, a huge exodus of industrialists and other CEOs had been announced in papers like Le Figaro and Les Echos. When some journalists of Le Figaro investigated the situation a few years later (1985, I believe but was not able to find a reference) three such people out of the dozens who had threatened to leave had actually left, all the others had stayed put, they had certainly moved their money abroad but kept their abode(s) in France.

        In a not so dissimilar type of story, about 30% of properties in Nechin-Estaimpuis (Belgium), 10km from Roubaix (France), belong to French people as taxes in Belgium are lower than in France. Among the ghost-owners of these properties are etc ed.

    • acorn
      Posted November 3, 2019 at 6:21 pm | Permalink

      LL The rich will do no such thing. Where are they going to go and how many armed guards will they need when they get there? The rich don’t spend anywhere near their income or wealth. There is no such thing as “trickle-down” from the rich, supply-side economics.

      To quote Neera Tanden at Democracy: “Supply-side economics assumes that lower tax rates boost economic growth by giving people incentives to work, save, and invest more. A critical tenet of this theory is that giving tax cuts to high-income people produces greater economic benefits than giving tax cuts to lower-income folks. Essentially, the more money the rich are able to keep, the more the whole economy will grow.

      But the evidence reveals two fundamental problems with this story. First, its primary prediction is wrong—giving tax cuts to the rich does not increase economic output or create new jobs. Instead, tax cuts for middle- and low-income taxpayers are much more effective at boosting macroeconomic activity.

      Second, supply-side theory misunderstands the actual mechanism by which tax rates influence macroeconomic activity. While supply-siders maintain that lower rates at the top incentivize people to earn more money, the evidence shows that tax cuts boost output mostly by putting money in people’s pockets and thereby stimulating demand.”

      • Edward2
        Posted November 4, 2019 at 8:07 am | Permalink

        The point about lower rates of tax is that there have been rises in revenues received by the government as a result.
        Perhaps some studying of behavioural economics would benefit you acorn.
        PS
        There are many nice countries to go and live in if Marxist Labour go back to envy and spite taxation levels..
        None need armed guards as you so ridiculously claim.

        • hefner
          Posted November 4, 2019 at 3:10 pm | Permalink

          1/ Everyone benefits if the top gets richer.
          2/ Global market forces and technological changes will inevitably cause growth of inequalities.
          3/ Reducing inequality is bad for economic growth and efficiency of capitalism.
          4/ Deserving top: they made it on their own through hard work.
          5/ Unequal outcomes but equal opportunities.
          That’s more or less what we have been told (or what you are saying). So …..

          a certain level of inequality in a country is generally accepted as a way to promote aspirations and incentivise effort and productive work. Also differences in wealth accumulation between younger and older age groups can be justified as long as younger groups have opportunities for some financial security and that a system (whatever it is) is put in place to guarantee such security.

          There was an ICM poll in 2013 of 2000 (properly sampled) people to address what an ideal or perceived distribution of wealth is. The UK population was divided in five 20% quintiles from the poorest 20% to the richest 20%. Here are the results:
          Distribution. Ideal. Perceived. Actual.
          0-20%. 15. 9. 0.6
          20-40. 18. 14. 5.4
          40-60. 19. 16. 11.
          60-80. 21. 19. 21.
          80-100. 27. 42. 62.

          The ideal distribution already accepted a larger wealth for the top 20%, and the polled people also knew that there was no way that the ideal distribution would be fulfilled and more or less accepted another distribution (the perceived one).
          The actual distribution shows 62% of the country wealth going to the top 20% (I will not quote the wealth of the 1%, if interested people can do their own research) and only 0.6% (1/100th) to the bottom 20%.

          I do not think it is necessary to be a Marxist to find these figures appalling. So what about going into more depth in your study of Behavioural Economics, eh?

          Essentially the same results can be found in
          inequalitybriefing.org/brief/wealth-video

          Enjoy.

      • libertarian
        Posted November 4, 2019 at 1:52 pm | Permalink

        acorn

        “trickle down”was invented by Marxists, no one promotes trickle down

        There are literally 100’s of other places they could go , just like they did the last time ultra socialists tried to tax everyone to death

        As you’ve never run a business I will treat the rest of your post as the total drivel it is.

        If you ever met any real people you would have a better understanding of how actual, real live people behave.

        Just so you know, if my taxes were lowered I would definitely invest in starting and growing more businesses . Right now because of the high rate of taxation, Ive paid myself less, have taken no dividends , pay less income tax and make smaller profits

        If your lot ever got in, I would be looking at returning to live an work in USA. Alternatively Switzerland, Bermuda.

        • hefner
          Posted November 6, 2019 at 7:59 am | Permalink

          Libby, Maybe have moved your profits to appear as capital gains so as to be taxed as a lower rate?

          Bermuda? why not Maldives, five new airports.

  13. Dame Rita Webb QC
    Posted November 3, 2019 at 7:34 am | Permalink

    If you want a fairer society and want to cut tax why are you not focussing on regressive indirect taxes, which were usually instituted by the Conservatives to begin with. Like the insurance premium tax, airport departure tax etc. The less advantaged in society could also do without taxes in all but name, like the TV licence, and a large chunk of their fuel bills being used to subsidise windmills, usually on the land of the very wealthy. While is not British business not being held back by having one of the highest petrol/diesel costs in Europe? Conservative governments like to say they cut taxes but they usually take the money back in another form and provide services that are just as crappy as you would find under a Labour administration

    Re[ply I am urging them to remove VAT on fuel

    • Fedupsoutherner
      Posted November 3, 2019 at 8:37 am | Permalink

      Too right Dame Rita. We watched as our farmer neighbours raked in obscene amounts of money to have wind turbines on their land while we watched our bills going up and up. Same with solar panels and the subsidies they used to attract. Who pays for this? Not the government but us through our bills. The rich gaining at the poorer people’s expense. Anyone buying a car over £60k has to pay an extortionate amount of road tax for the first 3 years despite the fact that the emissions are low. This is purely an envy tax. If people want to spend their hard earned money on a nice car instead of taking expensive holidays etc why shouldn’t they? It is not up to other people to dictate what we should and shouldn’t spend our money on. This government has too much interference in ordinary lives.

      • Turboterrier
        Posted November 3, 2019 at 5:43 pm | Permalink

        F U S

        Very well put and oh so very true. Will they ever learn? NO NO NO

      • margaret howard
        Posted November 3, 2019 at 5:51 pm | Permalink

        Fedup

        Well people who can buy £60.000 + cars could easily have afforded to install solar panels on their properties and benefit from the subsidies they gave.

        To classify them as ‘poorer people’ is simply absurd.

      • Lifelogic
        Posted November 3, 2019 at 6:56 pm | Permalink

        I never understand why people pay £60K+ for cars. My family currently have three perfectly good and flexible old ones worth perhaps £10K at most (for the three of them combined). Cheap to run, little depreciation, can be refilled with fuel in minutes, range circa 500 miles, cheap to maintain and insure too.

        A golf convertible, an Audi convertibles and an old Volvo V70 with seven seats.

        • a-tracy
          Posted November 4, 2019 at 5:26 pm | Permalink

          It’s a good thing that people (not me I hasten to add) do like to buy new posh cars or the German’s would be in a right state and Tesla wouldn’t exist. I don’t begrudge people who like to splash out they keep lots of people in work.

    • Lifelogic
      Posted November 3, 2019 at 9:06 am | Permalink

      We should kill VAT completely it is a daft, absurdly complex EU tax.

      • margaret howard
        Posted November 3, 2019 at 5:41 pm | Permalink

        Lifelogic

        “We should kill VAT completely it is a daft, absurdly complex EU tax.”

        Back to the (pre EU) good old days?

        “Between October 1940 and March 1973 the UK had a consumption tax called Purchase Tax, which was levied at different rates depending on goods’ luxuriousness.

        Purchase Tax was applied to the wholesale price, introduced during World War II, initially at a rate of 33​1⁄3%. This was doubled in April 1942 to 66​2⁄3%, and further increased in April 1943 to a rate of 100%, before reverting in April 1946 to 33​1⁄3% again.

        Unlike VAT, Purchase Tax was applied at the point of manufacture and distribution, not at the point of sale. The rates of Purchase Tax at the start of 1973, when it gave way to VAT, were 13, 22, 36 and 55%.”

        • libertarian
          Posted November 4, 2019 at 1:55 pm | Permalink

          I actually agree with Maggs

          I think VAT is reasonable as a tax collection method

          It needs to be removed from some items, simplified ( ie shouldn’t be levied on food whether hot or cold). Reverse VAT is a crock , and the rate should be lowered. Of course the UK government would keep all the revenue raised

    • Caterpillar
      Posted November 3, 2019 at 9:38 am | Permalink

      DRW QC,

      Consumption taxes can be designed to be progressive e.g. (i) actually look at what is being spent from bank accounts and tax based on that expenditure but with thresholds as for income tax (ii) higher rates of VAT / sales tax with redistribution can be made functionally equivalent but look politically different.

      Progressive consumption taxes alongside wealth taxes are a superior way to mange the economy than current tax structure. (Unfortunately in the UK those who have unearned wealth – due for example to uneven asset inflation over the country – adding to the problems of social inequality even think they should keep it after they die convincing themselves that they earned it.)

      • Dame Rita Webb QC
        Posted November 3, 2019 at 7:12 pm | Permalink

        I will take your word for it. However stuff is starting to pop up in the MSM about fuel poverty, so it will not be too long before we start to hear again of 70s style stories of pensioners freezing to death because they cannot afford to put the gas fire on.

        • Fred H
          Posted November 4, 2019 at 8:52 am | Permalink

          ‘Nothing like a dame’ – -I trust you are not being dismissive about a real social problem faced by hundreds of thousands of the elderly and low income areas of society? People really do make decisions about paying rent, buying food, clothes versus spending on heating. It is real not some ‘bleeding heart’ plea!

    • margaret
      Posted November 3, 2019 at 12:39 pm | Permalink

      reply to reply: you will find more general favour with the removal of VAT rather than the well healed who appreciate tax cuts in the higher brackets.
      It is simply not about enabling the better off to flourish in the misguided hope that greed won’t be the primary impulse, but rather about keeping favour with all.

  14. mark leigh
    Posted November 3, 2019 at 7:37 am | Permalink

    Totally agree. We need the campaign to lead on the benefits of a proper conservative fiscal policy.

    Make the pie bigger, and reduce the size of the slices we are asked to pay in tax.

    Trying to “out-pledge” the other tax and spend parties is also a mistake IMHO.

  15. GilesB
    Posted November 3, 2019 at 7:40 am | Permalink

    If people have the opportunity, incentive and resources to meet the needs of themselves and their families, more of them will do so, the state will need to provide less and less tax-payer funds will be required.

    The Conservatives need to paint a picture of a future Britain where individuals have not only more opportunities and more control over resources, but also more responsibility for the future impact of their decisions.

    In particular it would be helpful to set out paths to home ownership and to explain the very significant impact of spending three or four years away from home acquiring a degree that is never used, instead of working in an apprenticeship and saving for a house deposit. The calculations are not complicated but ignoring or indeed actively denying the consequences is raising false expectations and destroying the future for many young people

  16. Javelin
    Posted November 3, 2019 at 7:55 am | Permalink

    When the most privileged climate protestor on the planet can’t even live the life she preaches you know every word that comes from her mouth is complete farce.

    From the Guardian …

    “Teenage Swedish activist Greta Thunberg, who was speaking in California during a stop on her low-emissions journey from Sweden to Chile, tweeted that she was now in need of a ride (by boat) to Spain. … Thunberg, who refuses to fly because of the carbon emissions involved, had been travelling by boat, train and electric car.”

    • Fred H
      Posted November 3, 2019 at 4:33 pm | Permalink

      all manufactured and run totally emissions free presumably?

  17. Andy Cheshire
    Posted November 3, 2019 at 8:00 am | Permalink

    Sir John, what do the Conservative’s plan to do about freeing up money in a similar manner for those hit by the unjust targetting of their personal allowance, when earning above £100,000? This was a measure brought in by Brown. The Conservative governments since have done nothing about it. I can understand that the Social Democrat Hammond might do nothing about it, but what is the Conservatives policy going forward?

    Reply Lets see the Manifesto when it comes. I have put forward a way of removing 60% tax around £100,000

    • Lifelogic
      Posted November 3, 2019 at 11:00 am | Permalink

      Then there was the 20% increase in IPT tax to 12% it used to be nothing not that long ago, the pension pot tax rules that deters surgeons and other from operating, the absurd tax on interest for landlords that taxes them even when they are making a loss, the loss of child benefit and personal allowances for many! Government still ratting on the £1m IHT promise ……Tax absurdities everywhere you care to look after tax to death Hammond and Osborne with the highest taxes for 40 years and still borrowing hand of fist to piss yet more money down the drain on lunacies.

      • Lifelogic
        Posted November 3, 2019 at 11:02 am | Permalink

        sorry “hand over fist”

  18. Martin in Cardiff
    Posted November 3, 2019 at 8:00 am | Permalink

    No one is proposing such a high rate of tax under any circumstances.

    The Laffer curve has been discredited as not applicable in the way often claimed.

    • eeyore
      Posted November 3, 2019 at 8:31 am | Permalink

      Labour are proposing actual expropriation of certain shareholdings. As “compensation”, investors will be offered a forced loan to government at a valuation and return of government’s choosing.

      Insofar as the Laffer curve expresses mere common sense, it has not been discredited.

    • Edward2
      Posted November 3, 2019 at 8:37 am | Permalink

      Labour are proposing higher taxes on the “better off” eg income, capital gains and inheritances.
      For a Labour supporter you are not very well informed Martin.
      PS
      Sir John never mentioned the Laffer theory.

      • bill brown
        Posted November 4, 2019 at 11:35 am | Permalink

        Edward 2

        I would agree on that conclusion, but it is a bit like your knowledge of Europe and European countries

        • Edward2
          Posted November 4, 2019 at 4:56 pm | Permalink

          I dont think it is anything like your comparison.
          But you are a self proclaimed expert on Europe bill so we cannot possibly be as clever as you tell us you are.

          • bill brown
            Posted November 5, 2019 at 9:03 am | Permalink

            Edward2

            you are far too modest

    • Posted November 3, 2019 at 8:59 am | Permalink

      Effective tax rates of 67% or more and not supporting your Laffer curve assertion with fact. So fake news.

      Your failure to challenge the central tenet of our hosts blog that your higher rates of tax would lead to actually less collected, gives your game away.

    • libertarian
      Posted November 3, 2019 at 9:37 am | Permalink

      Marty

      The Labour front bench do not have a clue how taxes work, who pays them and on what basis . They just pump out soundbites that the gullible and naive then propagate

      In EVERY place that taxes have been cut, government tax revenues have gone up

      We currently pay 47% of all that we earn in tax , higher rate tax payers 62%

      Corporation tax is paid on profits. Most multinationals use the EU single market rules to transfer price their profits thereby paying lower corporation tax in Dublin or Luxembourg

      Income tax is paid on anything you earn via work or on income via interest or savings

      Billionaires do NOT earn a billion pounds per year they have a billion pounds worth of assets

      If you took ALL the money that the 150 UK billionaires have and distributed it to the UK population each person would get £2287 ONCE . You would then lose ALL the tax revenue in future from those billionaires and all the jobs they produce because in order to take their money from them they would need to liquidate their assets

      Labour are buffoons

      The UK tax code is currently just under 10 million words long , The Hong Kong tax code is just 300 pages. Hong Kong is a very successful country

    • steve
      Posted November 3, 2019 at 9:42 am | Permalink

      MiC

      Did you not see your beloved leader’s manifesto speech ?

    • Lifelogic
      Posted November 3, 2019 at 11:09 am | Permalink

      Rubbish tax income at 0% you clearly raise no tax, tax at 100% you raise no tax as no one can afford to work or even afford to get to work.

      In the middle you get something and at the Laffer Max point you the maximum tax (from that particular tax). You do though also raise rather less from other taxes such are IHT, VAT ….(as the earner clearly has less to spend after this tax).

      Taxes should never be anywhere nearly as high as the Laffer maximum point.

    • NickC
      Posted November 3, 2019 at 3:01 pm | Permalink

      Martin, Of course no one “proposes” such a high rate of tax. But we’d still get it under (Corbyn ed). And you have been discredited, but you still post the same old tosh. Found out yet what actually prevents the UK from being independent of the EU like New Zealand? Let us know when you have.

    • Roy Grainger
      Posted November 3, 2019 at 3:44 pm | Permalink

      The Laffer Curve hasn’t been discredited – John has just given you some facts which validate it. Of course if you are not interested in evidence-based policy making ….

      • acorn
        Posted November 3, 2019 at 4:13 pm | Permalink

        There are no facts that validate the Laffer curve. It appears to work due to “forstalling”. This takes advantage of reduced rates by shifting taxable events into the future reduced tax period.

        Aggregated over three tax years, a reduced tax rate reduces the amount of tax collected. See US Congressional Budget Office data.

        • Edward2
          Posted November 3, 2019 at 9:42 pm | Permalink

          So you really think that there is no optimum tax rate ?
          Try 100% and see what revenues you get.
          The State uses high tax rates on tobacco to reduce consumption and it works.
          There is a sweet spot for tax rates.
          Assuming you want to maximise revenues rather than virtue signal.

          • acorn
            Posted November 4, 2019 at 10:46 am | Permalink

            “The State uses high tax rates on tobacco to reduce consumption and it works.”

            Exactly Edward. The government uses taxes in two principal ways. (1) to stop something happening in the private sector which it has a policy objection to (ie tobacco use). (2) to operate a policy that diverts output from the private sector into the government sector, for the common good of the citizens.

            No fiat currency issuing economy uses taxation in a form to maximise revenue; it uses it to drive the economy. Can I suggest you Google the following text for an explanation. DO WE NEED TAXES? THE MMT PERSPECTIVE Posted on May 13, 2014 by L. Randall Wray

          • NickC
            Posted November 4, 2019 at 1:10 pm | Permalink

            Acorn, Only those who have not learned from Weimar Germany, Zimbabwe, and Venuzuela, are fooled into supporting the MMT.

          • libertarian
            Posted November 4, 2019 at 2:02 pm | Permalink

            acorn

            What total and utter cobblers.

            Your claim that taxes are levied to punish, therefore means that you want no businesses , no one working for salary, no one buying insurance or living in a house

            Oh they are diverting output into the government sector for the common good. ha ha ha ha …. keep drinking the Kool Aid . Marxists, dont you just love their little cotton socks

          • Edward2
            Posted November 4, 2019 at 4:58 pm | Permalink

            He is in an economic school of one.
            I’m not taken by his views.

  19. Posted November 3, 2019 at 8:02 am | Permalink

    You are caught in a trap. Informed people understand the Laffer curve, the ability of the wealthy to offshore and protect their money legitimately plus the ability of capital to move without exchange controls.

    So you should be able to plaster the fact that more tax is taken when rates are low nevertheless once you do that the uninformed, Labour left etc will say you are the party of the rich.

    Hence the trap.

  20. Anonymous
    Posted November 3, 2019 at 8:11 am | Permalink

    I would never vote for Corbyn.

    I have voted Tory most of my life but voted UKIP once, Brexit Party once and am about to do it again. I am working class.

    Corbyn may well get in by default on December 12th as Nigel squeals about the Boris blonde wig deal but I cannot bear to vote Tory again.

    Andy’s kids may end up getting turfed out of private school, all because he and his like kept insulting us.

    Shame.

    • Richard1
      Posted November 3, 2019 at 8:37 pm | Permalink

      Think rationally. It does of course depend where you live. If in a Labour constituency where Brexit is the challenger then fair enough. But if your vote allows in one of the Marxists is that really a good idea?

      • Narrow Shoulders
        Posted November 4, 2019 at 8:20 am | Permalink

        By voting conservative the voter is validating their behaviour, the current withdrawal agreement and future benefit increases while the middle stagnates.

        #noneoftheabove

  21. Kevin
    Posted November 3, 2019 at 8:19 am | Permalink

    This analysis is predicated on believing the polls that we face the same
    old Scylla and Charybdis of Tories vs. Labour. E.g., you wrote before about “a
    major inflation in the prices of assets”. If we only have a two-party system, what
    means do people have to make any change other than to vote Labour? Like
    you, of course, I don’t think they should. Luckily, this is not a two-horse race.

  22. Lifelogic
    Posted November 3, 2019 at 8:21 am | Permalink

    Given the reports from Lord Berkeley I think we can safely assume the Boris administration will continue pissing money down the drain on the HS2 project should they win. Are they just innumerate idiots or is it corruption or powerful vested interests at work. Not many other explanations.

    But then given the lack of a sensible mutually beneficial accommodation with The Brexit Party will they win?

    “Tory majority in doubt as Telegraph poll shows lead of just eight points” – reported in the Telegraph today! That over the most appalling & dire opposition in living memory, worse even than the Foot or Kinnock ones.

    • Posted November 3, 2019 at 8:30 am | Permalink

      Maybe you could add the political dimension to your posts and find something else to do as there seems to be lots of them. Empty vessels and all that.

      Some of what you say I agree with but you would never be elected on your policies so time to ditch the ‘Thatcherite red braces’ and move into the 21st century.

      • Lifelogic
        Posted November 3, 2019 at 9:02 am | Permalink

        I am not trying to get elected just trying to point out out reality.

      • Lifelogic
        Posted November 3, 2019 at 9:15 am | Permalink

        Were I trying to be elected I would have to trim the truth somewhat and become more of a rather bent second hand car dealer type like Cameron. He even claimed he was a ‘ low tax at heart Conservative and Eurosceptic’ to get into office. Also that ‘a treaty was no longer a treaty once ratified’ B/S – to rat on his cast iron promise and give us the dire Clegg coalition.

        No thanks very much.

    • Posted November 3, 2019 at 8:33 am | Permalink

      You; could not make it up, could you? In danger of being beaten by Corbyn because they cannot wean themselves from the poisonous EU.
      As we will be ruled by the EU, it does not matter if Corbyn rides in the Zills!

    • NickC
      Posted November 3, 2019 at 3:11 pm | Permalink

      Lifelogic, Well, when the Tories copy Labour (and LibDems and Greens) why bother voting for the imitation? The Tory party still hasn’t got it. The Boris WA is not Brexit; and Boris is not Greta. So either the Tories go for the 17.4m Leave voters, or they will lose. So far they are losing. Just like May.

      • Lifelogic
        Posted November 3, 2019 at 7:35 pm | Permalink

        I tend to agree.

    • Mark B
      Posted November 4, 2019 at 5:43 am | Permalink

      HS2 and the like are a neat trick for governments to fund / subsidise large corporates.

  23. Posted November 3, 2019 at 8:30 am | Permalink

    The UK government does not need the £’s of the rich to be able to spend £’s.

    a) Where did the rich get their £’s from in the first place ? ( it is written on every bank note)

    b) Where did the rich get their £’s from so they can buy gilts ? ( it is written on every bank note),

    The ‘tax the rich’ call bestows unwarranted importance on them.

    1. Currency-issuing governments are not like households, who are financially constrained and have to ‘fund’ their spending via income, borrowing, prior savings or asset sales.

    2. The progressive reaction to the release of the Paradise Papers told us that most progressives still do not understand Point 1. They think the government needs to raise taxes to reduce its reliance on debt while providing public services via expenditure.

    3. “A consequence of the fiat system is that governments that issue their own currencies no longer have to ‘fund’ their spending.”

    4. “currency-issuing governments such as those of Australia, Britain, Japan and the US can never ‘run out of money’ or become insolvent.”

    5. “Do we need the rich’s money?” No.

    6. “So should we close down tax havens? Yes!”

    Why? The reasons “largely have to do with social justice, inequality and the distribution of political power”.

    I would get rid of the council tax and business rates on small to medium size companies and cut taxes on the middle and working class.

    Increase government spending with one goal increase productivity.

    • libertarian
      Posted November 3, 2019 at 7:34 pm | Permalink

      Derek H

      Youve been told so many times. You really need to understand what ‘money” is, the printed notes and coins are purely tokens of exchange , anything can and just about everything has been used in lieu of “money” over the last 20,000 years

    • Lifelogic
      Posted November 3, 2019 at 7:37 pm | Permalink

      Perhaps they can indeed never run out of money but it can become valueless.

      • Posted November 4, 2019 at 12:31 am | Permalink

        Which is why you make sure there are enough skills and real resources to absorb the tax cuts and increased government spending.

        = No inflation.

        The private sector and public sector have to be given the time to adjust.

        Even the Romans knew before anybody could use the coins to pay their taxes they had to get hold of the coins first. They had to get the coins from the government.

        When the Euro was launched the ECB never said right everybody give us your Euro’s so we can spend. Nobody had any.

        If Scotland became independent they will not say okay everybody give us the new currency so we can spend. Nobody has any.

        It is just logical common sense governments spend first then collect taxes and sell gilts once people have the £’s to pay their taxes and buy gilts.

        It is called the deficit because the deficit has to meet the saving desires of both households and business.

        Accounting fact no ideology or politics involved whatsoever.

        • Edward2
          Posted November 4, 2019 at 7:59 am | Permalink

          You forget that when the Euro became a currency those nations transferred their existing currency into Euros.
          Ditto if Scotland decided to use Euros.
          It is no different to someone changing pounds into dollars to go on holiday.

          PS There is already inflation even at this relatively low level of magic money creation.

        • Mitchel
          Posted November 4, 2019 at 10:55 am | Permalink

          You forget to mention re the Romans that the coins produced (in the Western Empire) became increasingly debased and increasingly were not accepted for trade with the east.

          It wasn’t the number or availability of coins,it was what they were made of.

      • Mark B
        Posted November 4, 2019 at 5:41 am | Permalink

        Exactly. Money is a commodity just like anything else and has value based on desirability.

  24. Posted November 3, 2019 at 8:31 am | Permalink

    ‘Liberal’ Boris has a list too, just does not publish it. Small businesses under the recent Tory Governments suffer outrageous tax burdens – our High Streets are empty because of it. Ask the hardly-taxed-Corporations to vote for the EU-dependant Tories. I’m selling up and moving all the wealth I have elsewhere. I have no option – because you, Sir John, are the answer – not Nigel Farage.
    GATT 24 now or else the Tories will be out of power for another quarter century as they were after the treachery of Maastricht.

    • Smiler
      Posted November 3, 2019 at 9:46 am | Permalink

      You’re not keeping your money in the Co-op bank then?

  25. Everhopeful
    Posted November 3, 2019 at 8:38 am | Permalink

    Didn’t students help with the pre-Revolution Russian harvest to ramp up the peasants’ grievances?
    That ended well didn’t it?
    French Rev. the same. Politics of envy as a way of gaining power.
    Ghastly radicalism from way back…Luther? Henry8? Cromwell? Risen again now.
    All taxation is theft and all taxes are used to bribe, fight wars and create client states.
    One thing the rich have managed to do through taxation is to hand back the responsibility for their workers to the population at large.

  26. Everhopeful
    Posted November 3, 2019 at 8:42 am | Permalink

    “ Brexit by Christmas” sounds a bit like “ Over by Christmas” to me!

  27. Richard1
    Posted November 3, 2019 at 8:46 am | Permalink

    Anyone considering voting Lib Dem should watch the extract from Andrew Neil’s interview with jo swinson in which ms swinson is asked to explain her claim made in a speech in parliament that the treasury says Brexit will result in a collapse in gdp greater the financial crisis. Andrew Neil points out (which other bbc interviewer would have done so other than maybe john Humphreys?) that the report does not say that or anything like that.

    I think The most likely explanation is ms swinson is simply completely economically clueless. Of course if she had made a right wing point should now be accused of being a ‘liar’.

    • Fred H
      Posted November 3, 2019 at 4:29 pm | Permalink

      The most likely explanation is ms swinson is simply completely clueless.

  28. Fred H
    Posted November 3, 2019 at 9:12 am | Permalink

    Total tax take from the successful, high earners is all very well – but you make no mention of the lower end and middle ground in their millions. Remember May’s ‘just about managing’? When are the admirable socialist views on raising standards of living for the poorer millions going to feature? Taxation in its many forms at the lower end of society and indeed the essential workers condemns millions to an almost no hope view of the UK which claims to be so caring, just and equalitarian.

  29. steve
    Posted November 3, 2019 at 9:35 am | Permalink

    JR

    Fully agree with what you say.

    ‘Labour-ism’ nowadays really is driven by jealousy. Going after the rich doesn’t wash with me.

    Having heard Corbyn’s manifesto launch I for one firmly believe the mindset of the left is to wreck, grab and smash.

    As one might have guessed, however, Corbyn omitted to say how the country would function once all the wealth was taken from the bosses, factory owners etc and ‘redistributed’.

    The man can take his little red flag and shove it where the sun doesn’t shine.

  30. Just so
    Posted November 3, 2019 at 9:35 am | Permalink

    Labour’s Manifesto was made by a Committee.

  31. The Objector
    Posted November 3, 2019 at 9:52 am | Permalink

    The Rich. It is a Labour Party socialist fixation. They deny their individuality. They are Scottish lawyers and Judges. They know how to hide infamy with euphemism and tarnished legalese gone dark bias

  32. Arnie from Newington
    Posted November 3, 2019 at 9:54 am | Permalink

    I am not happy about section 24 tax. This is a tax introduced by the Tories that ignores the principle that you pay tax on profits and artificially inflates my income so that I now pay higher rate tax on my modest income.

  33. Sue W
    Posted November 3, 2019 at 9:56 am | Permalink

    Irrespective of which party is elected, with one notable exception, we are doomed. Either by Boris’s “worse than staying in” treaty or by the politics of envy or lunacy of the other two main contenders. Fannying around with tax policies is a complete waste of time when we are facing the potential imminent end of a once great and proud nation. And yes, it is that bad.

    • Turboterrier
      Posted November 3, 2019 at 5:27 pm | Permalink

      Sue W

      Totally correct

    • Ahhhh!
      Posted November 3, 2019 at 7:40 pm | Permalink

      Intelligent people if it were just intelligence would not do to Parliament what they have done and continue to do. A number of them have loads of money, privately, so there must be something else.
      If I had money my main political drive would be how best to drink another beer.So something’s up.
      A three year long strike by Parliament itself. Unofficial too. A wild cat strike. Sounds like a missile hit The House. Perhaps something like that did.

  34. BJC
    Posted November 3, 2019 at 10:05 am | Permalink

    Labour’s policies come as no surprise as they have the same socialist philosophy as those nestling comfortably in the EU’s ivory towers, i.e. the more you have the more we’ll grab for redistribution to “level the playing field”. Just look how well that one’s working out on the continent.

    If we accept the preposterous Corbyn/McDonnell suggestion that behaviour wouldn’t change with higher taxation, I suppose we then have to wonder how their Marxist nirvana would be funded once the “rich” had been taxed into the level playing field of poverty. I presume their definition of “rich” would need to evolve to encompass ever-lower income/asset levels. As you rightly say, Sir John, jealousy is a dreadful basis for an economic policy.

    • HQ
      Posted November 3, 2019 at 7:43 pm | Permalink

      Corbyn and McDonnell are trying to knock out our Economy’s Command and Control Centres.
      The workers? Not even part of their plan except as unwitting pawns.
      One needs to read all about Socialism. Even live it, better.

  35. alastair harris
    Posted November 3, 2019 at 10:25 am | Permalink

    Socialists never understand that tax isn’t a zero sum game. To be fair they don’t understand much of anything!

  36. formula57
    Posted November 3, 2019 at 10:34 am | Permalink

    From the Comments here yesterday and thus far today I would expect there to be some concern in Conservative Party circles that may not be prompted by reading the opinion polls.

    • steve
      Posted November 3, 2019 at 5:29 pm | Permalink

      formula57

      Yes you’d think so wouldn’t you ? Which is partly the reason why I’m convinced we’re about to be stitched up, i.e they actually believe we’ll let them get away with it.

  37. Ian Wragg
    Posted November 3, 2019 at 10:43 am | Permalink

    The MSM theme seems to be vote BP get Corbyn. The public won’t fall for that as they see the WA is a sellout.
    Why should we believe any of the manifesto commitments when you have so spectacularly failed over the past 10 years.
    Immigration and taxes at record levels, negative interest rates and soaring house prices. Epidemic of knife crime and not a policeman to be seen unless of course if we upset one of the many protected species.
    All waffle.

  38. David
    Posted November 3, 2019 at 12:07 pm | Permalink

    Surely the reason for having a referendum was that both main parties were divided. People could not reliably vote to leave by selecting either, rightly decisions were based on the importat questions of tax and spend. Its a travesty that Brexit is now a top consideration in a General Election.

  39. Dave Andrews
    Posted November 3, 2019 at 1:00 pm | Permalink

    High income tax rates are a good way to claw back public sector pay costs. What is needed is a mechanism for companies to pay bonuses to employees out of profits more along dividend lines when it comes to taxation. The public sector doesn’t make a profit.

  40. ian
    Posted November 3, 2019 at 1:52 pm | Permalink

    I would prefer the country to move back to the tax system the UK had before world war two where there was no income tax or IN, it’s politics of division and hates on both sides at a time when both sides say they want the people and the country to come together and to work together, I cannot see that is possible with this personal tax system which is used by all parties to win election, I am fed up with attack on the rich and attack on the poor by people themselves on other people because of this tax policy, it just makes people unhappy on both sides of the divided, politicians could of not thought up a more destructive system if they had tried, and because this diabolical act the people and the country will be divided forevermore, it the most despicable policy parliament has ever invented against people.

    If there is not the intelligence in-country to put one thing right then the country and people doomed forever.

    I will never vote while the diabolical and despicable tax system is being used, my forefather would never forgive me.

  41. Narrow Shoulders
    Posted November 3, 2019 at 2:22 pm | Permalink

    Cutting the rates of tax, where transparent and bringing in additional monies, is very difficult to argue against except for the Left’s cry of “they have more than us let us take it off them”.

    I do not like a tax code that allows taxpayers to choose how much tax they pay. A straight percentage of income with tangible deductions for expenses and investing which result in the aforementioned income would be welcome.

    Where schemes such as the UK film scheme can be used to offset tax there is inequity with PAYE serfs. Those completing tax returns should not get any additional taxation benefit that is not available to us serfs.

    Labour’s tax mantra to the masses of “taxes must rise but not yours” will again prove compelling for the electorate.

  42. ian
    Posted November 3, 2019 at 2:35 pm | Permalink

    Now the politicians have come up with Brexit which will also divide the people of this country forevermore and will be at forefront of every election going into the future where it will be at the top of the list in any election instead of income tax and NI, you do not need a clause like article 50 to break a treaty you can break a treaty at anytime you want. It only takes the political will of the people to vote for a party that will do it.

    • steve
      Posted November 3, 2019 at 5:23 pm | Permalink

      Ian

      “Now the politicians have come up with Brexit which will also divide the people of this country forevermore”

      Or at least until ‘remain – ism’ becomes as antisocial as smoking.

      With their attacks on democracy and British identity, and coup in our country, I suspect they’ll have made a target of themselves. There is trouble ahead that’s for sure.

      But, as far as I’m concerned ye reap what ye sow. They should have kept their mouths shut when they lost the referendum.

  43. Steve P
    Posted November 3, 2019 at 3:21 pm | Permalink

    When tax was 83% the rich found ingenious methods to not declare income. When the tax rate went down to 40% they began to declare this hidden income and pay taxes again. There comes a point when a system becomes so unfair that people make a stand and in doing so pay nothing – as it is difficult to pay what is seen as a fair amount without declaring it all and getting caught to pay the full amount. Yes tax rates came down but more people paid them

  44. Roy Grainger
    Posted November 3, 2019 at 3:48 pm | Permalink

    Any estimate of how much it’s going to cost us in the long run to pay for the Conservative’s exciting new Labour policy to ban fracking ? How many green-campaigners and warmists will switch to voting Conservative as a result ? None ? On the other hand how many Conservatives will switch to voting TBP ?

  45. BillM
    Posted November 3, 2019 at 4:07 pm | Permalink

    Taxing less yields more revenue for the HMRC that is clear.
    However, given the alarming drop in Conservative support, according to the latest DT Poll. It is clear that public sentiment for Boris and his dubious policies is waning.
    This is pre-election May ‘deja vu’ all over again.
    I trust his pet genius, Cummins, will change course to correct? Or is Cummins conducting another operation similar to the May SPADs disastrous manifesto?
    And We all know how well that went – for Labour.
    Like it or not the Conservatives cannot win a majority on their own. So, as with the opposing conglomerate of remainers they MUST join forces with fellow Leavers to secure victory for OUR democracy.
    Nothing is more important than our absolute freedom from the EU.

  46. Gareth Warren
    Posted November 3, 2019 at 4:09 pm | Permalink

    I do like this lower tax policy with an appreciation that services are there when needed, the benefits prosperity generated by lower taxes brings are today completely missing from the political debate.

    But the bad side of this is I feel an increasing amount of taxes are wasted on administration and bureaucracy.

    The most well paid employee in the NHS does not do any difficult surgery but sits behind a desk, I hear too of absurd spending such as £9 a ream of paper. Part of my vote to leave the EU was to reduce a layer of this bureaucracy, I would like to see efforts to get more value from taxes after we leave the EU.

  47. steve
    Posted November 3, 2019 at 5:05 pm | Permalink

    Nigel Farage has just announced he is not going to stand as a parliamentary candidate in this election.

    Assume his party win, could he still be Prime Minister ?

    I’ll still be voting BXP because stopping Boris’s sell out deal and Corbyn’s anarchy are vital.

    • Fred H
      Posted November 4, 2019 at 8:44 am | Permalink

      Nigel is an MEP, can strut his stuff in the EU, and organise his prospective MPs with personal support – why not?

  48. steve
    Posted November 3, 2019 at 5:09 pm | Permalink

    Roy Grainger

    “Any estimate of how much it’s going to cost us in the long run to pay for the Conservative’s exciting new Labour policy to ban fracking ?”

    Don’t know but then stopping us from being self sufficient in energy is to the EU’s advantage.

  49. Ian@Barkham
    Posted November 3, 2019 at 5:14 pm | Permalink

    Hello Sir John

    Of course tax intake rises when there is equality in contribution. We all want to contribute and support society on a level footing

    However, there is then the Political imperative. Tax is just another weapon deployed by the left, of course it means that the hard working, the productive and the entrepreneurs will up sticks and move – that’s the point.

    The left actually wants these people to leave, as these are the people that would never support the lefts cause.

    This method of rule and control is straight out of the playbook attributed to an earlier Mayor of Boston(US). High taxes, high crime, lawlessness causes non-supports to leave, therefore consolidating the power base. Cynical – yes, but it works. Just look at some of the deterioration in some of the major Cities in the UK, then notice the more and more decline in the wellbeing of their citizen has led to the rise in support of the left.

  50. margaret howard
    Posted November 3, 2019 at 5:34 pm | Permalink

    JR

    “They paid more tax in real terms after allowing for inflation.”

    So did everybody else. Or are you saying inflation only affects the rich? Another of your many spurious claims.

    • Edward2
      Posted November 3, 2019 at 10:40 pm | Permalink

      Progressive tax rates means the better off pay much more taxes than the less well off.
      And that is correct and accepted.
      It isn’t a spurious claim.

      • acorn
        Posted November 4, 2019 at 6:00 pm | Permalink

        Define “progressive”. Taxes on wealth have plateaued since the advent of Thatcherism, while GDP has increased by a factor of 2.5. Is that what you call progressive Edward2?

        A three-bedroom flat for sale at £2.1 million in South London faces a council tax bill of £700 per year. Another three-bedroom flat for sale just one mile away at less than one-fifth of the price (£400,000) faces a council tax bill of £1,160 per year, 66 per cent higher. Is that what you call progressive Edward2? (HT Resolution Foundation)

        As I am currently number crunching on Business Rates, do you think that domestic dwellings paying 0.5% per year of market value in Council Tax; compares well with Business rates at 3.5 – 4% of market value? How progressive do you think that is Edwaed2?

        Exactly whose side are you batting for Edward2? You don’t strike me as being in the top 5% of the UK income distribution. Surprise me!

  51. Richard Evans
    Posted November 3, 2019 at 6:24 pm | Permalink

    Until we leave the evil, corrupt and globalist EU in TOTAL with No deal and No sneaky tentacles there is absolutely no point in discussing anything regarding the future as we shall have no say in the matter.

    Nigel Farage and UKIP forced the referendum because the Conservatives were concerned about oblivion their party. They thought they would never lose. (heard that somewhere else). The “tories” and the Establishment had no intention of leaving the EU and still do not. That is why they took over a year to declare article 50 and a further two years of total obfuscation.
    I said from the time MAY was elected PM, the establishment will NOT allow a “Brexiteer” PM in office. Boris is a “Remainer” first and foremost, looking after the Conservative party. The people are irrelevant, prove it otherwise.

    The “tories” will not deliver a clean and total exit from the EU.

    We have to vote BREXIT Party to save our country.

  52. Ian Pennell
    Posted November 3, 2019 at 7:42 pm | Permalink

    Dear Sir John Redwood

    It is indeed correct that the top rate of Income Tax could be cut without reducing total Tax Revenues in the medium term: The Laffer Curve demonstrates that there is an optimum Tax Rate above which total revenues fall because there is less incentive for folk to work hard and earn more money; indeed the wealthy find loopholes (i.e. by spending money on shiny new equipment for their businesses to reduce reported profits) if rates are too high.

    There is also plenty of evidence that this optimum marginal Income Tax Rate for maximum revenues is much less than 50% as might be assumed from the Laffer Curve (possibly nearer 30%), because lower marginal rates attract investment from around the World (which can be transferred to Britain at the click of a mouse). Lowering income and business taxes as a policy is not only pro- growth but it is also deflationary. Thus printing money to pay for such tax cuts (provided this new money is used to buy up gold- backed securities to back up the new currency) – using the boost to Treasury revenues to fund tax cuts initially – will boost growth without causing Inflation. Higher revenues can then be used to fund improvements to Public Services, build many more homes and upgrade road, rail and internet infrastructure.

    Unfortunately, cutting marginal tax rates is not popular: The above Money- Printing Tax-Cutting Program would need to be done in conjunction with borrowing a bit more and using the proceeds from no more EU contributions to boost Public Services, investing in housing and infrastructure in a big way from the outset. And on that Boris Johnson is on the right track – but there needs to bigger bolder eye-catching policies that are very popular and which will boost the economy (whilst out-foxing Jeremy Corbyn): How about borrowing £35 billion just this year to give every man women and child in Britain a cheque for £500 just two weeks before Christmas? That would lead to a big boost to Christmas Sales, much more VAT receipts and duty receipts, lead to some real-terms growth and make a big Conservative Majority after 12th December much more likely?

    All the best for the Conservative Election campaign.

    Ian Pennell

  53. Rule Britannia
    Posted November 3, 2019 at 8:52 pm | Permalink

    Please can we not talk about “the rich” when this seems to be conflating people EARNING above average incomes and those with excess assets and cash over their needs.

    Someone with £1bn in the bank is not the same as someone going out to work for their crust.

    And yes, I have been disincentivised by the tax system since 2001 when Labour introduced stupid taxes on self-employed so I agree wholeheartedly with the premise of the article.

  54. Steve Pitts
    Posted November 3, 2019 at 9:18 pm | Permalink

    Voting Brexit party will not get them elected in most areas. Where I live voting Brexit Party could lead to a Lib Dem or Labour win. Vote Conservative in most cases unless you are ok with stopping Brexit or a new referendum. I would take the Corbyn threat more seriously as stopping him is far more important than the type of Brexit we get believe me.

    • Fred H
      Posted November 4, 2019 at 8:41 am | Permalink

      SP – -it is precisely this sort of weak attitude that has characterised the Conservative Party for years. The electorate should vote for what they believe in – not some half-arsed tactical voting whose outcome is not certain. If people want to Leave then vote Brexit Party, if they have been convinced by Boris that Son-of WA is leaving as was the decision from the Ref, then vote Conservative. Those that are blind to the results of a Corbyn government will vote that way anyway.

      • Shirley
        Posted November 4, 2019 at 2:58 pm | Permalink

        Agreed. UKIP did not win any seats, but the large number of votes they obtained was influential.

    • a-tracy
      Posted November 4, 2019 at 12:43 pm | Permalink

      I’m not doing this blind this time Steve, I want to know who our Conservative prospective candidate is first and I want to know all about them, we’ve already had a LibDem in blue clothing. Our local association need to get cracking and start to inform us about who is standing because as we learnt at our cost in 2017 we’re not voting for Boris we’re voting for a local candidate who can swap and change parties and beliefs at a whim.

  55. Lindsay McDougall
    Posted November 3, 2019 at 9:59 pm | Permalink

    One of the reasons that the Labour Party gained some respect for fiscal responsibility in the 2017 election is that John McDonnell produced a pamphlet entitled FUNDING BRITAIN’S FUTURE, which contained allegedly costed proposals and a list of proposed taxes and yields. The Conservative Party, both collectively and individually were too lazy to shoot down his analysis, which was riddled with holes. McDonnell got away with murder and gained at the polls because of this lack of challenge.

    It might try people’s patience to list all of the taxes and yields but here are 4 of the main ones:
    – Corporation tax (yield £19.4 billion)
    – Income tax increases for top 5 per cent (yield £6.4 billion)
    – Extension of stamp duty reserve tax to derivatives and removal of exemption (yield £5.6 billion)
    – Reversing tax giveaways on CGT, inheritance tax, bank levy and scrapping the married persons’ tax allowance (yield £3.7 billion)

    McDonnell’s estimate of total yield from these 4 measures was £35.1 billion. His document contains an allowance made for additional change and uncertainty of £3.9 billion across all of his proposed tax changes. In reality, the shortfall on these four items alone would be well in excess of £3.9 billion. It’s quite possible that most of the total yield on these four items would evaporate due to various manifestations of the Laffer curve effect. Rich people have the wit to vote with their feet.

    I trust that if McDonnell produces a similar pamphlet for the 2019 election, Conservative politicians will not be so lazy and will shoot it down in flames.

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*
*

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

    Promoted by David Edmonds on behalf of John Redwood both of 30 Rose Street Wokingham RG40 1XU

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page