Too much Taxing makes a country poorer

Governments tax tobacco to stop people smoking. They tax alcohol to limit people drinking. They tax petrol and diesel because they want us to use less. They tax plastic waste to get rid of it. They tax flying to reduce it. You get the idea. Government knows better than people what is good for us and imposes taxes to restrict us. It imposes VAT on non food purchases, as it thinks we should make do with fewer purchases. This can lead on to an outright ban as it will soon impose on new petrol and diesel cars . It is government’s puritan tendency. Keir Starmer represents this tendency well, displaying his inner Malvolio all too often.

Government also loves taxing work, saving and investing. This government seems to see work as an unreasonable interruption to people’s lives as it looks at giving rights to people to four day weeks and more flexible and home  working. It may be readying a new tax attack on anyone who works long hours and earns more than the government thinks desirable. They will reinforce the bias in the tax system to penalising success and enterprise.

The bias against so called unearned income is particularly damaging. If you work hard and save some money from taxed income you will then face higher taxes on the income and gains that generates. This is not unearned income. This is twice earned income. You first had to earn the savings, then you have to work at choosing and managing  the savings.

Of course government needs to collect some tax and will rightly get more of that from better off people. All the time we opt for free at the point of use for health and education, and all the time we need to defend ourselves as we do there needs to be sensible taxes. The aim should be to keep the rates of tax down and the number of taxes under control, as that is the best way to grow the economy. It is important to stop undue spending growth on everything from falling productivity to bigger losses by services like trains and the Post Office where customers should pay.It’s not core public services or pensions we cannot afford. It’s Bank of  England losses, the world’s dearest new railway, the bungles of the public sector which lead to big compensation bills, the arrival of so many illegal migrants needing hotels  and the  £30 bn loss of productivity.

100 Comments

  1. Andrew Jones
    August 31, 2024

    Government taxes people because it wants revenue and it goes after the moneyspinners because that’s what yields the most. Government could not care less about our general health.

    Nothing could be more true about the current shower who plummet the credibility scale on a daily basis.

    1. Ian Wraggg
      August 31, 2024

      Taxation is legalised theft. It reduces creativity and encourages idleness. Stasistarmer and Thieves will make us all worse off
      I’m buying gold as a hedge

      1. Lifelogic
        August 31, 2024

        Well at least they cannot deflate it so easily. You should have bought it 25 years about when the idiotic Brown sold it for a song at about 1/10 of the current price. About 9.6% PA, compounded annually for 25 years. Doubless some of the cash put into his absurd Baby Bonds my daughter has only doubled over 18 years. So covers her birthday party just about.

        1. Lifelogic
          August 31, 2024

          The baby bonds were clearly a way to try to by vote which should have been illegal. They tax you say ÂŁ1000 waste loads of it then give a bit your children ÂŁ250 back as a duff investment scheme the child can only access at 18. Also selling the gold for 10% of its current value.

          Yet the dire Blair made the (History Graduate & Doctorate) Gordon Brown Chancellor and let min become PM, but then again Thatcher made the even more moronic John ERM Major and serial O levels failure Chancellor and then PM.

          The Sceptic podcast (latter part) details the lunacy of net zero and our energy policy and qualifications of energy ministers, the climate change committee senior staff and the energy department civil servants. None seem to have relevant degrees or experience. We are government by ignorant donkeys mainly with politics and law degrees or similar and state sector experience.

          But they would any competent “right thinking” physicist or energy engineer want to join such a team of deluded net zero loons.

        2. Lifelogic
          August 31, 2024

          But then why would any competent “right thinking” physicist or competent “energy engineer” want to join such a mad team led by deluded net zero loons with Politics degrees and religious nutters like Ed Miliband.

      2. Dave Andrews
        August 31, 2024

        They will be taxing that as well soon. VAT when you buy it, and CGT when you sell it.

      3. Hope
        August 31, 2024

        IW,
        Labour make me think of Lion King. Stasi as Scar and his cabinet of hyenas not happy until they scorched the earth and nothing left to pillage. This is England.

        Taxes! ÂŁ18 billion on illegal criminals from France and 1.6 million migrants on benefits!! Why are they not deported? Daily stabbing increased nothing done whatsoever, but hurry blogs lands you in jail, stranger assault of three women for not wearing face coverings gets community sentence and a fine!! Where is Cooper! Why is she not condemning this extreme misogyny? She has reintroduced non hate crime reporting! 900 Met officers looking on l8 r while people are stabbed and murder Ed on the streets. Two Tier policing and Two Tier Justice system.

        Meanwhile Rayner flying off for the night in Ibiza to party, how about the air miles they condemn everyone else for!

      4. Mike Wilson
        August 31, 2024

        I’m buying gold as a hedge

        And if you make a bit of money on it 
. your friendly government will be your partner in your success.

    2. Mickey Taking
      August 31, 2024

      Agreed, the taxes mentioned at the start are victims of a captured audience, with a self-righteous explanation of a very thin veneer. My only surprise all these years is that shoes don’t have a special ‘pavement maintenance tax’….

      1. Hope
        August 31, 2024

        Our taxes are helping drug offenders to continue to be drug offenders! Middle and high income earners easily afford drugs, the lower paid or unemployed commit crime like shop lifting, sex work etc. made easier by the Tory and Labour Uni Party.

        MPs view the drug world through rose tinted glasses as they did and do participate in drugs as some told us. However, they should be banned from office like doctors and nurses. Why? Because they are law makers and cannot have an objective view on an evil trade. Yet, they are content for our taxes to be wasted on people continuing to use drugs including prisons! There is so much money to be made Albanians have come here to make a living in the drug trade!

    3. Original Richard
      August 31, 2024

      AJ :

      No, the government doesn’t tax because it wants revenue. It can always print money for additional revenue when its wants, which it does of course.

      The purpose of high taxation is to remove spending power from the population as a method of control and to curb freedom. To justify high levels of taxation, spending must be high and to achieve this there must be developed high levels of wasteful spending. Net Zero is the perfect vehicle for such wasteful spending on renewables, grid expansions, hydrogen, CCUS, electrolysers etc. whilst at the same time sabotaging our energy security, economy and military capability.

      There is no CAGW caused by increasing CO2 either natural or anthropogenic because of a phenomenon known as IR saturation. There is already sufficient CO2 in the atmosphere to produce 99% of the amount of greenhouse gas warming possible. The IPCC Working Group 1 (“The Science”) states on P95 (footnote) that doubling CO2 (170 years at the current rate of increase) will produce a mere 1.2 degrees C of warming. The Royal Society agrees that IR saturation exists but doesn’t quantity the increase from a doubling of CO2. Happer & Wijngaarden’s calculations show it to be 0.7 degrees C.

  2. Lynn Atkinson
    August 31, 2024

    The younger generations have had any inclination to save snuffed out. So the taxing of savers an d the maintaining of dishonest money has worked a treat.
    All of my rental income is classified as ‘unearned’. If I look after my own investment properties, I have to do so unpaid. I can employ somebody to do what I do, and can pay them for their efforts. So the work is only not work when I do it and the income is only unearned when I earn it.
    What is Britain going to do when those of us who work twice for our money shuffle off and leave those who have no money, no savings, no assets and have no intention of working once for it are the majority?
    This is the lesson of the tax system: don’t save; don’t drive; don’t drink alcohol; don’t provide for yourself or your family; take drugs; steal £200 or less at a time; read up on ‘mental health problems’ so you can fein them until you develop them naturally from your life choices. Wow!

    1. agricola
      August 31, 2024

      Lynn, put in a very between the eyes way, but bang on the money. Well said.

      1. Hope
        August 31, 2024

        Tory Govt. Paid some people ÂŁ1600 per month not to work. The govt. piloted the scheme to see how not to stigmatise those who choose not to work! Fine, but not on my taxes! This should be a referendum issue.

        We had a news paper interviewing a group of men who got ÂŁ1300 per month plus housing and all bills paid on welfare who claimed they could not earn the same if they worked! A Tory govt!

    2. Everhopeful
      August 31, 2024

      Yes.
      Exactly!
      What you describe is no doubt the ultra dystopian future they have mapped out for mankind.
      There won’t be any need for taxation.
      The powers-that-be will have stripped everything bare.
      Like a plague of locust.
      But no matter
it’s what folk voted for
with the most terrible, blind tenacity.

    3. Berkshire Alan
      August 31, 2024

      +1

    4. Lifelogic
      August 31, 2024

      You say “All of my rental income is classified as ‘unearned’ “ Indeed and due to not being able to deduct you interest costs or inflation link you CGT you pay tax on money you have not even made. Often over 100% of profits!

    5. Sharon
      August 31, 2024

      Lynn

      Said as it is, sadly!

    6. Lifelogic
      August 31, 2024

      “Too much Taxing makes a country poorer” It sure does as they spend it so appallingly. It also kills the tax base for future years. Too much OTT regulation, bonkers OTT employment laws, market rigging in energy, transport, education, housing, universities… does the same too. So why have the Tories for 14 years and now Labour done so much of this and are set to continue.

  3. agricola
    August 31, 2024

    We have been here many times before, it has the familiarity of our favourite pub. People work to eat, some because they enjoy it, a relative minority because they wish to create a sense of independence in their lives while building a business enterprise that is of benefit to its emplyees and ultimately the UK. If the latter are overburdoned with unnecessary regulation, social engineering, and high taxes, the majority in the UK and the government are the losers. This entrepreneurial element in society just take their talents elsewhere, and those who might be attracted to0 tbe UK as a business base do not come.

    So as we and our host have said many many times before, we want and need, light touch regulation, no social engineering, and an attractive tax regime. All of which would add up to a happy population and a thriving country, which through increased business activity enjoyed the greater tax take, that in turn provided the infrastructure and social support for those who need it. It is win win. However the country is run by inferior business and life intellects who believe in take take before create create. So in the UK, for the foreseeable, it will not happen, we have lost our compass for growth.

  4. Lynn Atkinson
    August 31, 2024

    Our society is regressing, our ‘reality’ is manipulated with all the modern tricks of the trade. AI has yet to really get into gear but is fashioning a Potemkin reality to keep the crumbling real one from becoming undeniable.

    We are asked to depend on windmills for power, what happened to nuclear fusion? Where is Concord – gone and replaced by a contorted road network on which soon no safe vehicle (ice) will be allowed, a massively expensive and limited railway where the ‘drivers’ are in the top 1% of earners. Communications technology – the ever present mobile phones which have never matched the landline model for quality.

    Technological advancement has been exclusively in digital, to the great neglect of everything else. This ‘advance’ is used to manipulate reality. Don’t believe your eyes – believe what we say is truth and support with the computer models and pictures we generate and manipulate – the films we make to show you the future – of London underwater, of Ukraine winning the war and of Kamala Harris and Kaya Kallis as ‘world leaders’.

    Zuckerberg has acknowledged manipulating the truth on Covid and ‘the Hunter Biden Laptop’ scandal. There will be much else, and this is the net result of the ‘puritanical taxation’ and ‘psychological warfare’ waged on the people by their ‘elected’ leaders.

    1. Mitchel
      August 31, 2024

      The sort of techno-fascism that Blair has long wanted for the UK.

      1. Lynn Atkinson
        August 31, 2024

        +1 historians, if they survive, will place Blair at the very centre of the vortex – (revolutions so fast that we are all left spinning.)

    2. Hope
      August 31, 2024

      Lynne,
      Our forebears worked out 200 years ago water mills more reliable than wind! Better still they worked out coal was a reliable source of energy and still is, China, India, Germany and US has it. Labour and the unions should be ashamed of themselves for allowing manufacturing and jobs to go east. Some skilled jobs will not be replaced like ship building, glass, potteries. Food production needs cheap reliable energy. It also needs farm land to grow it!

      Tory Govt aided and abetted by Labour knew they were lying to the nation and scaring the public into compliance. Where is this information in the multi million pound tax funded inquiry? Does this behaviour constitute Cooper’s non hate crime ? Why not? Govt smeared eminent scientists who advocated Barrington Declaration, they ridiculed Trump for advocating proven drugs, but of course if there were existing drugs to combat covid emergency powers could not be given by Govt. So it (they) lied on a massive scale! This caused wide spread economic harm, so when can we expect prosecutions of MPs, Ministers and advisors?

      1. Lynn Atkinson
        August 31, 2024

        We need Johnson to explain why he banned Ivermectin, previously available for 40 years without mishap, BEFORE the ‘pandemic’ – to which it was the antidote.
        Looks like a premeditated action to me.

  5. lifelogic
    August 31, 2024

    Stasi Starmer seems to think governments knows best and does things (like run trains, healthcare, schools and utilities best and that all your money is really the governments. All the evidence of history and economics suggests the total reverse.

    Government cannot even regulate things like Water Companies sensibly let alone run them.

    Starmer even thinks smokers cost the taxpayer money when the reverse is the case. Basically they just want your money and any excuse like the net zero lie, the war on car users, landlords, non doms will do to justify these evil and hugely damaging thefts.

    1. hefner
      August 31, 2024

      In 2021 in the UK smoking costs to society were 17bn (ash.org.uk, 14/01/2022).

      1. hefner
        August 31, 2024

        In 2024, it is estimated that duties on tobacco will bring ÂŁ8.8 bn.

        1. Lifelogic
          August 31, 2024

          Also smokers, on average, die about five+ years younger which saves about £50k per smoker in pensions and more for the NHS and social services. What next, bans on cycling (circa 10 times more dangerous than driving), horse riding, skiing, boxing, rugby
 real freedom and choice please. If people prefer to smoke than to have an extra five years in say a debenture nursing home say Blackpool that is their choice.

          “Too much Taxing makes a country poorer” well too much government spending and wasting and regulating is the real problem. They will get the money one way or the other tax, motorist muggings, inflation and borrowing (deferred taxation). The reason is simple they spend mainly waste the money so much less efficiently than the people whom they have stolen it off do. Furthermore it cost money to collect and distribute, distorts productive economic activity, deters and even prevents productive economic activity.
          See Milton Furthermore four types of money. Government should only spend about 20% of GDP mainly on law and order and defence not nearly 50% as now. It would be about 20% of a GDP of about double though.

          See also the blunders of recent government and in history. Moronic wars, HS2, net harm lockdowns, loans for mainly worthless degrees, net harm Covid Vaccines, the ERM as a precursor to the EURO, the Millennium Dome, the dire death causing NHS


        2. Timaction
          August 31, 2024

          I’ve read other studies that costs from smokers are one fifth the revenue they generate. Plus they die younger so don’t need the health requirements of an aging population, not being around to enjoy them! Hey ho. Stasi just wants to control. There are no smoking risks when they smoke outside ffs!

        3. Hope
          August 31, 2024

          Hef,
          How is the ÂŁ17 billion cost actually worked out?

          I am always curious because illegal drugs is bound to be much worse yet there is never a comparative analysis. Politicians forced police to give up on drugs, the narrative of waging war on drugs a fallacy as we have seen with Albanian drug gangs coming here for county line type activity. The wider ramifications causing huge amounts of money in crime to pay for addictions like shop lifting, assaults, sex work; public service costs including social services, children services, NHS etc. Politicians simply not interested. They provide a narrative that is all.

          State of Oregon has changed back from legalising drugs to make it illegal again.

          Go to any pharmacy and watch criminals get their prescribed methadone at taxpayers expense each week.

      2. Sam
        August 31, 2024

        And when you look closer at their figures, over 11bn of that 18bn is their estimated cost of lost productivity.
        Pretty vague estimate of a future potential loss.
        Whereas the tax revenues are an actual amount of money.

  6. agricola
    August 31, 2024

    SJR, given we are where we are, even were government thinking to change overnight, we would still be burdoned with social engineering, excessive regulation and a tax book of 20,000 pages. You have been a player and spectator for much of your life. Now unburdoned by belonging to part of it, and having thoughts in conflict with most of it, consider setting out its necessary correction.

    Rewrite the tax book, by discarding all that is unwanted in the society you wish to create. I believe Singapore get by with a 500 page tax book , and a personal GDP rating that is better than the UK’s. Ask two like minded ex colleagues with experience in the negative effects of social engineering and over regulation to contribute their remedies. You then have Plan A which I suggest, short of starting your own political party, you attach to Reform. Said because they are the only game on the block likely to be anyway sympathetic. They have every chance of forming the next government, so help them where they might need it, and provide the ultimate service to UK Ltd., and all those sailing in her.

    1. Christine
      August 31, 2024

      I agree Sir John should follow his conscience and openly come out in support of Reform. He doesn’t owe the Tories anything the way they have treated him. More high-profile people backing Reform would increase their legitimacy and boost their standing in the polls. We will soon reach the point of no return with such a large increase in those dependent on the state. We are fast spiralling into becoming a third-world country.

      1. Timaction
        August 31, 2024

        Agreed and Sir John’s wealth of knowledge and experience would not only add value but credibility and know how to our fledgling right of centre Party.

      2. Lynn Atkinson
        August 31, 2024

        JR needs something better than Reform. We all do.

  7. agricola
    August 31, 2024

    Addendum.
    Singapore are 4th and the UK 21st in the World personal GDP league table.

  8. Donna
    August 31, 2024

    By their own admission, the UN wants living standards for “ordinary people” in the west to be reduced. They want to level down the west and redistribute global wealth.

    By their own admission the WEF wants British citizens to “own nothing.”

    Two-Tier Starmer is just delivering those objectives rather quicker than Sunak, which is presumably why he has been appointed PM.

    Globalist-socialists, like the UN/WEF and Starmer, believe that the only reason Communism/Socialism has never worked is because it hasn’t been implemented globally.

    1. Mickey Taking
      August 31, 2024

      It will never work when people refuse to comply to the miserable, boring, catholic lifestyle, where arts, entertainment in general are removed. In worst cases drugs and alcohol prevail, and black market criminal forces come to the fore. Dystopia will have truly arrived.

    2. Sharon
      August 31, 2024

      Donna

      There’s always a reason given for why communism doesn’t work – global is a new one.

      Unfortunately, this has all been imposed slowly, salami-sliced on us for decades… can it be reversed? How do we remove soooo… many quangos, NGO’s, global institutions, rich billionaires worldwide from influencing countries to such an extent?

    3. Lifelogic
      August 31, 2024

      A truly evil agenda from the Tories and now Stasi Starmer and Two Tier Keir.

  9. Everhopeful
    August 31, 2024

    Mostly governments dream up taxes in order to take our money.
    The money is needed for them to squander as they see fit.
    And then they come back for more


    1. Lifelogic
      August 31, 2024

      Misdirection of government expenditure, incompetence, vested interests, fraud and corruption. Voting gives almost zero control, The only way to control it is to make sure you pay the minimum taxes you can, go on benefits and barter, go black market, leave for lower tax areas, stop bothering to work – so this is what so many are doing. A doom loop for the economy!

      1. Everhopeful
        August 31, 2024

        +++
        And how many would want to start up a new business now?
        Good grief
what a thought.
        “Doom loop” sounds about right.

  10. Everhopeful
    August 31, 2024

    “Nothing is certain except death and taxes”
    And increasingly the former may be caused by the latter.

  11. Mark B
    August 31, 2024

    Good morning.

    Why do governments tax ? Well there are many reasons and our kind host touches upon one of them – Social Control. Hence why it is such a favoured measure of the Left.

    But the one of the other reasons is to ‘destroy the money’. You see, government via the BoE prints money. This money is loaned to itself in the form of so called borrowing which leads to another euphemism, and that is ‘investment’. This, ‘investment’, is really spending. So government creates more money (Quantitative Easing) so it can spend more.

    If I were to do something similar I would be arrested as this would be seen as theft. ie I am spending money on myself (or others) and making unsuspecting and unwilling persons pay for it.

    The things governments get away with.

  12. Bloke
    August 31, 2024

    Someone is sending emails, as if from an individual gmail account, showing a frail aged female pensioner alone suffering from cold with the message:
    ‘Labour has announced cuts to the Winter Fuel Payment, taking away up to ÂŁ300 per pensioner.
    Sign our petition to stop this:’
    At first glance it appeared a scam, asking for personal postcodes and agreement to allow more, but looks nearer to realistic on viewing again.
    It’s a fair request in the circumstances, but Conservative ineptitude and extreme waste resulted in Labour gaining office. Bleating about their own incompetence after the event is pathetic.

    1. hefner
      August 31, 2024

      There are plenty of such petitions, only a few are genuine. If you don’t know how to check whether the one you are about to sign is real or not, better abstain.
      The one by ageuk.org.uk is OK. It already has 471k+ signatures.

  13. Sakara Gold
    August 31, 2024

    Actually, what we need is less taxation and more exports. We have been expecting foreigners to finance our government profligacy for too long. Wasting ÂŁbillions on government incompetence, poor project management, the ÂŁbillions in civil service non-contributory index linked final salary pensions etc is no longer sustainable. To nobody’s surprise, the new government has banned the ÂŁ1500/day “consultants” responsible for the worst cock-ups

    Many await the October budget with trepidation, as Sir Kier Starmer and Rachel Reeves will find even more creative ways to extract tax. Most which will be spent on paying the ÂŁ150bn pa interest on the national debt

    1. Mickey Taking
      August 31, 2024

      and under LABOUR watch the National debt rise year on year.

    2. Donna
      August 31, 2024

      The biggest cock up, and the one they are making much much worse, is the Net Zero scam ….. all based on dodgy computer models, blatant lies and propaganda.

      1. Lifelogic
        August 31, 2024

        Indeed total insanity on so many levels a bit more CO2 is a good things not a bad and the policies they push make very little difference to CO2 levels anyway. EV cars actually increase CO2, as does burning wood at Drax.

    3. Lifelogic
      August 31, 2024

      You say “To nobody’s surprise, the new government has banned the £1500/day “consultants” responsible for the worst cock-ups”

      So many appalling errors by government but I assume you mean the state sector pension racket. Private sector pension (about 80% of them perhaps just 25% of the value of the state sector ones they these people are forces to pay for.

      The worse of these Net Zero, UK energy policy, net harm Covid Lockdowns, the pointless Blair, Brown and Cameron wars, the net harm Covid Vaccines, HS2, the worthless degree soft “loans”


    4. IanT
      August 31, 2024

      It comes as a pleasant suprise to find that I disagree with none of your comments today SG.

  14. David Andrews
    August 31, 2024

    The UK is on the road to becoming a failed state. As Macmillan warned many years ago, selling the family silver is not the solution. But that has been the route followed. Many businesses have only survived operating in the UK because they were bought by foreign companies. Apart from that taxation and regulation has killed industry after industry or driven the successful to more tax friendly shores. 100 years ago London hosted the largest stock exchange in the world measured by market capitalisation, now it is #11 in the world just above Saudi Arabia. It is revealing that investment managers look beyond the UK, not to the UK, when searching for growth companies with prospects. It is symptomatic of the decline that has occurred, now accelerated by the exodus of the very wealthy ahead of Reeve’s first budget. It will get worse as private finance for growing businesses becomes more and more scarce. It will require a radical change in the mindset of those in charge to reverse decline.

    1. IanT
      August 31, 2024

      Those currently in charge are incapable of any change in their mindset David – radical or otherwise. They are deeply committed to a particular ideology that will lead them down the same path their predecessors walked, to the same unhappy destination. All we poor plebians can do, is try not to be dragged over the cliff with them.

  15. Christine
    August 31, 2024

    Governments tax everything they possibly can, it’s nothing to do with protecting our welfare. You haven’t mentioned death taxes and by your logic, they would be taxing death to stop people from dying. They can’t get rid of the white British people fast enough and our grandchildren will find themselves a minority in this country during their lifetime. They will not be treated kindly as our politicians have instilled victimhood into the minds of all the new arrivals. Politicians should be ashamed of themselves.

    1. Timaction
      August 31, 2024

      Especially as the Tory’s had 14 years to get rid of Human Rights, left wing Supreme Courts, non Equality laws with every minority except English white men given “special” characteristic’s we can’t get. DEI/ESG b/s. Apparently over 1.6 million working age immigrants allowed here in the last 20 years are either on welfare benefits of one sort or another. With illegal cost ÂŁ16 billion a year. Just wonderful. Thankyou Tory’s/Labour!! How’s that mass migration going for the English people?

  16. Berkshire Alan
    August 31, 2024

    Yes, depressing John isn’t it, but were the so called Conservatives that much better.?

    How many taxes have actually been dropped over the last few decades, once taxed always taxed seems to be the motto, its just a question of how much !
    And Governments wonder why work ethic, and productivity are down.

    1. mickc
      August 31, 2024

      Berkshire Alan
      And that’s precisely the point. The Tories were just Blue Labour with added incompetence. Voters decided to get rid of them, not vote Labour in…that was just the side effect of getting rid of the disease.
      The side effect itself is going to be dreadful but no doubt Tugendhat will be Tory leader so just a continuation agai.

    2. Berkshire Alan
      August 31, 2024

      People tend to work for themselves and their families, not for the Government or for other people, those who care about other people or causes, usually give some of their time or money/support to voluntary organisations/charities in some way or another.

  17. Derek Henry
    August 31, 2024

    Morning John,

    Why the private sector, households and businesses, never get tax cuts we deserve.

    With the important part being the taxes don’t fund the government as we are fully sovereign and issue our own currency. Unlike Euro using countries that gave up their sovereignty and do have to find the Euro’s via taxes or borrowing.

    Continuous fiscal deficits and debt issuance:

    https://billmitchell.org/blog/?p=61971

    If you give somebody ÂŁ100, they spend it which is taxed at 20%, leaving the next person with ÂŁ80 as income. They then spend that ÂŁ80 which is taxed at 20%, leaving the next person with ÂŁ64 as income. And so on until the entire ÂŁ100 disappears and creates ÂŁ100 of extra tax. All without changing the tax rate one single percent

    The result is lots of extra sales and income for people down the spending chain they wouldn’t otherwise have received. It’s a straightforward geometric progression.

    There is no reason to raise taxes if there is significant unemployment. In fact if there is unemployment then by definition we are overtaxed for the size of government we have and we should be looking at cutting taxes, not raising them.

    The bigger the tax rate the quicker the money returns to source to be shredded. The lower the tax rate the slower the money returns to source to be shredded.

    All of this means the government deficit is nothing more than the savings desires of the private sector, households and businesses, domestic and foreign. Held as cash.

    Which means the national debt is nothing more than the savings desires of the private sector, households and businesses, domestic and foreign. Held as gilts edge savings certificates.

    The government deficits provide the funds that allow the private sector, households and businesses, domestic and foreign to buy the gilts. Our pensions, our saving portfolios or even if we buy them directly from NS&I.

    The fact that all government ‘s since Thatcher have linked taxes to spending and falsely claim that the taxes fund the spending. Instead of the truth that it is the other way around. The government provides the funds by running deficits that allows us to pay our taxes. Is why the private sector, households and businesses, never get tax cuts.

    This lie that the British are like Euro using countries who do have to find the funds via taxes and borrowing has to stop. We don’t we issue our own currency. A spending bill in parliament issues the funds.

    1. Berkshire Alan
      August 31, 2024

      Derek
      Your calculation on the 20% tax rate on every transaction until it has all gone in tax is why the government are now looking at other sources of income from additional taxes.
      They have spent all of the VAT many times over.
      They have spent all of the income tax many times over.
      Now they want an element of your savings, investments and overall wealth each year, so they can waste (redistribute) that as well.
      We have yet to hear about our new fate in the coming Budget once we die !
      Gives you a real incentive to work hard and try and better yourself and family doesn’t it. !
      And they want the ecomnomy and GPD to grow by working 4 days a week.!

    2. Martin in Bristol
      September 1, 2024

      DH
      Your example of tax using VAT is wrong.
      Only the end user pays 20% VAT.
      Usually the public who are not registered for VAT
      Everyone else in the supply chain (who normally are registered) adds up their inputs then takes that away from their outputs.
      Some even claim back VAT.
      Some pay a small amount of VAT.

  18. Ian B
    August 31, 2024

    Money circulating the economy in all its shades ’causes’ an economy, ’causes’ wealth, causes prosperity for all. Tax is not income it is the removal of the economy.

    1. Derek Henry
      August 31, 2024

      Exactly Ian !

      Once collected as tax it is shredded. All income tax collected ends up in the UK Consolidated fund, from which it is destroyed. The UK Consolidated fund starts with a zero balance the next day.

      Yet, the tax payer money myth will not die.

      The EU uber alles brigade act as if we use the Euro. The propaganda is relentless.

      Once the majority of the public realise then admit by studying the actual government accounts. That tax payer money funds the government is a myth. Then we will get our tax cuts.

      Which may or may not add to the deficit. It depends if the private sector, households and businesses spend the extra income from the tax cuts or save the extra income from the tax cuts.

  19. glen cullen
    August 31, 2024

    408 illegal economic /criminals arrived in the UK yesterday from the safe country of France 
How can nobody see them leaving France

    1. Berkshire Alan
      August 31, 2024

      Glen
      The French see them, and wave them goodbye.
      We see them, and offer them a water taxi for free to help them get here safely. etc etc.

      1. Timaction
        August 31, 2024

        Not we. The Uni Party. I would take them straight back and tell the Border farce accordingly and the French to control THEIR borders. Stop taxing me and mine to pay for this outrage.

  20. DOM
    August 31, 2024

    John’s articles fail to get at the heart of what has happened since 1997 and what is now happening right in front of our very eyes. It’s almost as if he is aware of the ideological modus operandi but cannot bring himself to analyse it and then expose it choosing to focus on surface issues.

    I’ll make it easy for John. Maoists and Marxists are in control, they’re gonna smash the nation and realign it. The Tory response? More vacuous bullshit about getting the party back on track rather than a declaration of war against Marxist scum. Quite simple, the Tory party doesn’t want the war. Well, they’ll have no choice because the war will be rammed down our throats as they promised they would in 1997.

    the rubbing of our noses in it was a declaration of political and cultural violence by Labour and the Tories endorsed it all, exposed our nation to harm and all to protect their filthy party and their careers

    The recent riots are a portent to come. The riots revealed so much about what Britain has been turned into and exposed the mindset of those in charge.

    John can groan about high taxes and public sector productivity but these have become meaningless issues in the greater scheme of things ie the future direction of a nation. Britain in 2060 will see massive emigration

    Reply Please find a site you are in sympathy with. Vitriol about governing parties changes nothing.

    1. A-tracy
      August 31, 2024

      Dom, who’s going to buy the properties to allow people to move. There are big predictions of another housing crash in 2026 which might allow first time buyers to get on the first rung but will leave an awful mess, maybe families having to return to multi generational living again as care homes get more and more like prisons where you can’t even get a warm cup of tea or make a decision for yourself as we saw in covid when people were stopped from leaving.

    2. Berkshire Alan
      August 31, 2024

      Reply – Rely
      Posting probably born out of shear frustration with all past Governments John.
      Our Country has changed for the worst (in my opinion), and out of all proportion, recognition, and tradition especially over the past 30 years, where our work ethic, culture, traditions, and yes old fashioned values, have simply been trashed, not just by immigration, but by WOKE policies, and Government stupidity.

  21. William Long
    August 31, 2024

    What you say is, as usual, correct, and should be the view of any thinking person. The problem we have had for a long time now, in fact ever since Nigel Lawson went haywire about EMU, is that once politicians come within the sway of Whitehall Treasury officials, they lose any claim to independence and common sense. George Osborne was a prime example of this. While in opposition he had some good things to say about flat rate income tax, and ending Inheritance tax, but as soon as he achieved office, that all went by the board and he became just another clone of Gordon Brown. And that has been the case with all the Chancellors since 2010.
    The worrying thing is that none of the candidates for the Conservative leadership have shown any real sign of understanding why it is so important that they not only agree with, but are capable of articulating the sort of views you support. They just bang on about Unity (by which they mean ‘compromise’), and immigration, or reorganising the party membership. But I suppose that is not really surprising seeing as they were mostly happy to serve in a cabinet lead by Sunak and Hunt, both of them supporters of Tax and Spend. I suppose we will have to wait for a new face until after labour have won the next elaction.

  22. glen cullen
    August 31, 2024

    We could be rich like the USA
    Trump ‘’If you don’t have fracking shale-gas, you don’t have a commonwealth’’

  23. David Cooper
    August 31, 2024

    In acting as described, socialists do not want to improve lives, they want to control lives. They behave like the Animal Farm pigs.
    At the end of the animated film version of Orwell’s book, the lower animals did not merely look from pig to man, and man to pig. They rose up. The alternative in the developed Western democracy that is the UK, if there is no scope for any kind of peaceful uprising, is to bow down under 5 years’ worth of globalist and quasi-Marxist socialism. Is this our fate?

    1. A-tracy
      August 31, 2024

      Perhaps we are going to have to return to church so that we have community leaders to speak for us!!!

      We’d have to get rid of the current church leaders first to get the more militant version we’d need, the fighters, lawyery type who know a good line in how to get benefits and free legal aid.

  24. Sharon
    August 31, 2024

    This current government is an authoritarian, socialist party. Unfortunately, people being allowed to work hard and be successful is not part of their psyche- success is punished!

    The biggest (mammoth) amounts of money being wasted is on net zero and immigration costs.

    At this rate, we’ll be mimicking Venezuela!

  25. Michael Saxton
    August 31, 2024

    This Country is ‘drowning’ in regulation and taxation. We are no longer a free people. Control everywhere abounds and regrettably most parliamentarians irrespective of political persuasion revel in all this as indeed do the Civil Service. With ‘open’ borders and illegal immigration costing millions, with money wasted on foreign ‘aid’, with millions going to help fund futile wars in Ukraine and Gaza and billions being wasted on Miliband’s ‘Net Zero’ vanity project, it unsurprising people here are worried and frustrated. Starmer will rue the day he and Reeves impose further draconian taxes on working people.

  26. Roy Grainger
    August 31, 2024

    In principle I don’t mind paying more tax but not if the money is going to be used to pay train drivers £80,000 a year while new hospital building is cancelled.

    The Sunak/Starmer war on smoking is pure virtue signalling and it will not work. Marijuana smoking was banned in 1928 and that hasn’t worked yet.

    1. A-tracy
      August 31, 2024

      I wonder how long it takes to train a train driver for that 35 hour working week?
      The government last year determined that a junior doctor straight after 5 years intensive study at university, taking on their student loan if they were English (not Scottish) were worth just under £30,000 per year, responsible for many lives often in A&E yet its felt a train driver who working on a semi-automatic system is worth more than double? Does anyone ask why? When we compare with what foreign train drivers get we are told they earn double here? Why? When accidents happen we’re often told its driver error taking a corner too fast, lack of momentary concentration, more and more mechanical safety braking and operation is being introduced. Why wasn’t the Elizabeth line driverless when it could have been? Most of us would prefer those workers to be redeployed into customer services onboard help, making sure people haven’t fallen between the gaps and assisting people on and off trains in wheelchairs.

  27. Bryan Harris
    August 31, 2024

    Governments tax tobacco to stop people smoking.

    If only the government was so concerned about our health!
    HMG taxes those things that will bring in the most income – easy targets. They don’t care how we die.

    Our government has forgotten how to balance the budget, and besides they are so used to throwing money at a problem, perceived or otherwise – the taxpayer is the much coveted golden egg laying bird.

    Instead of the stick and carrot approach Wilson used to talk about, today we only get the stick. We have been made to get used to being punished for HMG incompetence.

    With a very large government workforce to keep happy with over the top wage increases there is no way Starmer will consider reducing taxes, not even when the middle classes have been devastated and pensioners all but wiped out.

  28. Bert+Young
    August 31, 2024

    The points Sir John makes are absolutely true ; but who are in a position to heed his views are likely to listen ?. I despair of the present situation ; if I was able to simply pack up and go I would .

  29. Paul Freedman
    August 31, 2024

    So well put. Specific taxes are used to deter certain consumption and they prove the what happens to overall consumption in a high tax economy.
    It is ironic that a Labour government which claims it wants to enhance economic growth is doing the very thing which will restrict it – raising taxes in its next budget. It should be doing the very opposite which is tax cuts (funded by public sector efficiency gains) if it wants to enhance economic growth.
    The Thatcher and Major administrations showed the way and left a sparkling economy in 1997 (after inheriting a basket-case of one in 1979). Those administrations made us all proud to be Conservatives too.
    The only way to experience such glory days again is to re-adopt those intellectual, fair and reasonable approaches.

    1. Lynn Atkinson
      August 31, 2024

      MAJOR! Until Blair he created the worst years of my life. He was apolitical disaster and they is why he lost so comprehensively.
      If you Conservatives had kicked up then, we might have got another ‘Thatcher’ and never looked back.
      Sadly you were ‘proud of Major’ đŸ€ź apparently!

  30. RichardP
    August 31, 2024

    Every increase in tax boosts the Black Market, especially with alcohol and tobacco. High taxes and increased restrictions cause more criminality. Where there is a demand there will be a supply.
    It’s almost as though the government are in league with the criminals, who’d have thought!

    1. Lynn Atkinson
      August 31, 2024

      Welcome to Italy!

  31. Peter Gardner
    August 31, 2024

    I remember my early days in Australia as a consultant working on a government advisory contract. One of the key questions was why need the government get involved, the default being the government not involved? Another priniciple was that the user should pay for public services – not necessarily all of the cost but enough to ensure the service is appreciated and valued. This approach keeps the state small and gives people and businesses more freedom to act in their best interests. It is still true today that the state takes a much smaller share of GDP in Australia than it does in UK. Tax revenue is 29.5% of GDP vs UK’s 35.3%, Aus GDP/capita is much higher, US$70k vs 50k, debt is 58% of GDP vs UK’s 102%, and so it goes on.
    I wonder if either the Tories or Labour ever consider international benchmarking beyond the confines of the EU or the USA, the former being far short of any kind of benchmark and the other too far out of reach? There is not much sign of it, not economically, not in terms of pandemic response nor in any other area. Of course, Sir John frequently references the US Fed Reserve and the ECB in respect of the BoE but this seems to be exceptional.

  32. DOM
    August 31, 2024

    Now that our kind host is happily retired from public duty does he and his party have anything to say about the two-tier policing and judicial system that now filters its actions and decisions through race, identity and religion?

    It is beyond concerning that Tory MPs and ex-Tory MPs remain deliberately mute while the fundamental democratic and governance foundations are slowly hacked apart and discarded.

    The Tory party surely realises that when Labour leave office they will leave behind a client state so entrenched and so powerful that a democratically elected government will be nothing more than a puppet government carrying out the orders and demands of a Marxist client state?

    Labour will make changes so revolutionary to make them irreversible. Tory silence on the dismantling of our nation’s democratic structures is why I for one loathe them.

    Reply Why do you come on this site when you do not understand its nature? If you want to debate the past failings of the Conservatives do so on a Conservative Party site.

  33. Keith from Leeds
    August 31, 2024

    Spot on, Sir John, but why did the Conservative Government not listen to you? If they had, we might not be in the mess we are now and will be in for the next five years.
    As for the ÂŁ22 billion black hole, which is complete nonsense, I would have more respect if Starmer/Reeves had said they were auditing every ÂŁ of previous government spending to reduce waste. That way, they might actually have money for their pet projects and still be able to reduce taxes. The government budget for 24/25 tax year is around 1.1 billion. Anybody with some intelligence and determination could find at least ÂŁ100 million is savings.
    But the Con/Labour Uniparty only know how to spend, not save. Good point about taxing savings being double taxation, it applies to IHT as well. This is a greedy Labour government again!

  34. Mike Wilson
    August 31, 2024

    It strikes me that once a society organises itself such that ‘the state’ collects taxes to provide services for the common good – you stand at the top of a slippery slope. Growth in the public sector and ever increasing rewards for public sector workers is inevitable. Give the state the power to make laws, and a police force and prisons to enforce them, and the state will inevitably grow fat.
    In my lifetime the state has taken more and more and given less. The park keepers and groundsmen are gone. The bins collected once a fortnight instead of weekly. Dentistry gone. NHS unavailable. Our army, navy and Air Force a fraction of what they once were A police force that ignores shoplifting and burglary. The list goes on and on. They take more and give less.
    Sooner or later the state will devour the rest of us. The question is – what can ever be done to prevent this?

    1. Mike Wilson
      August 31, 2024

      I read in the paper today, in an article about Labour wanting to impose policies that will make us healthier, that Starmer said:

      I want to reduce the burden on the NHS, desperately needed 
 and obviously I want to reduce the demand on the taxpayer

      That added comment – ‘reducing demand on the taxpayer’ – is utter nonsense. The demand on the taxpayer only goes one way – UP – regardless of demand.

      1. Mickey Taking
        August 31, 2024

        The only way to reduce demand on NHS is to publicly limit certain ailments to get any attention.
        You know, no midwifery, no joint replacements, no transplants, no urine or blood testing.
        A faster route to Third World medicare that we are currently heading for.

  35. agricola
    August 31, 2024

    We need an open discussion nationwide as to the extent we want or need government in our lives.
    The more government we have the greater the tax burdon on the individual and the less the enterprise in the country. Consequence the lower the GDP per capita. Singapore’s highest tax rate is 24% and they are at fourth in the World GDP per capita rate. UK tax rate in arround double that of Singapore and we enjoy 21st place in World GDP per capita placing.
    Singapore has its geographical position and native wit, but little in the way of natural assets. The UK has gas , coal, and oil. It has an abundance of native wit, but the drag of a sea anchor loosely described as government. I would add, a government that does not work for the benefit of the population in any shape or form.
    Solution, we must decide how much government we discard to halve the current tax take. We must deregulate, because a legislature run by lawyers for the benefit of lawyers is a resounding failure. Additionally we must slay the satan of woke, ruthlessly. Government must fall from the backs of the people, ideally before the people unseat it.

  36. A-tracy
    August 31, 2024

    It’s as simple as this John, if we all had access to public sector pensions guaranteed benefit for a personal contribution ranging from 6% to 10% (police I believe to get it after 30 years). We wouldn’t have to save as much in different plans from ISAs to savings plans, to pension companies or BTLs.

    We could sit in judgement condemning people especially the self-employed who looked at low return none guaranteed private pensions that Labour last robbed and decide to go for buy-to-let investments instead. As the left wing unionised sector does, “unearned income bad, you bad people’. Our taxpayer underwritten guaranteed final salary pensions with the ÂŁ2m pots to you’d need in the public sector to pay out ÂŁ15k per annum are good and not the same thing at all – look over there at those bad capitalists that invest in stocks! Money for nothing.

    Now there is talk of the tax free pension draw down allowance being reduced, means testing pensions to punish all those that were told pension investments was a responsible and socially good thing to do, doing without today to keep yourself in the future, now you’re bad and they want to take the state pension of you! Fools mwhaa haha what can they do about it, the plebs getting above their station in life. You might not pay tax on the money going into a private pension but you do pay NI, and there is talk they want to put NI on pensions. People need to wake up. We need to insist on them putting public sector pensions into the same workplace pension investment vehicles the rest of us are in from the point in time they start dipping into our old age protections.

    Then god forbid you don’t spend it all, thats the ultimate sin in Labour speak, you had more than you needed, so we will take it and redistribute it to those who couldn’t be arsed to work or save or arrived here with nothing. Inheritance tax apparently also on the list, they don’t want you to gift or help your own family. What we do with our post-taxed income is our affair!

    I love watching hypocritical socialists accepting £170k worth of gifts tax free because of their job (who else gets away with that?) protected unique pensions. Jumping queues in the NHS for treatment. Jetting around the World to have fun whilst telling us we shouldn’t take our once a year (if we’re lucky) annual break by plane. House flipping. Renting houses between each other to max out expenses. Getting our kids set up with government sector contracts worth billions. Acting as slum landlords.

    John, you did right to get out, how frustrating would it be to be in that house of hypocrisy doom and gloom.

    1. Berkshire Alan
      August 31, 2024

      A Tracy
      I think you are as frustrated as DOM and many of us out here, at how out of touch Government has been for decades, with them preaching one thing whilst doing another, that hinders the very thing they say they want to promote.
      Their thinking process, and their laws with unintended consequences (which many others can see as clear as daylight) beggars belief.
      Importing Oil and Gas from abroad at greater cost, and increased pollution on delivery, whilst leaving ours in the ground, which loses tax revenue, all in the name of Net Zero is just but one of the latest.

      1. A-tracy
        August 31, 2024

        I’m frustrating and sick of hearing excuses Alan. When Sunak was concentrating on petty changes I knew he was just treading water for a transfer of power. I just feel that we are being played. It’s the socialists turn to take our money and give little in return.

        My parents are now worried about their fuel bills, their council tax band being moved up a letter to grab an extra ÂŁ500 pa of them and of getting sick with the state of our health services.

  37. john waugh
    August 31, 2024

    on the This is MONEY app –
    Top US investor slams Britain for lack of tech champions
    Fund manager Cathie Wood who runs fund firm Ark Investment Management says-
    “your educational system is exemplary and yet I think what happens is that your capital markets are not deep enough-or incentivised enough .
    In the US , we are big advocates of tax incentives for innovation – encouraging founders to take risks .”
    she told BBC`s Today programme .

  38. Bert+Young
    September 1, 2024

    The Labour Government must crash ; all of its tax implications against the capable and risk takers will certainly reduce and damage the economy . It’s true that the Sunak/Hunt period ruined the Conservative period but a new combined resistance to put Labour down is bound to happen ; bring it on !.

  39. Linda Brown
    September 2, 2024

    As I have said before, VAT is an EU tax and should have gone when we left (did we?) the EU. If not got rid of, should have been reduced drastically. But, of course, it won’t as good money earner for non productive people who are in charge of our finances. Have you thought about it, they are benefit claimers as they are non productive when they keep taking our hard earned cash away from us twice over with capital gains tax etc.

    They increased fag taxes but people still buy them and now we have vaping which is just as dangerous. People will always look for something to stick in their mouths, if not sweets then what about dummies. At least they are harmless to the body. Where does it all end? We keep going round in a never ending circle of new ways of taxing us out of our hard earned dosh.

  40. APL
    September 2, 2024

    Rachael Reeves ( our new Chancellorette ) tells us the Tories left us with a ÂŁ20 billion ‘black hole’ in the public finances. That may or may not be true. But, …

    It transpires the British government has agreed to paythe Bank of England ÂŁ16bn per year for the next nine years to cover the Banks losses, a result of quantitive easing ( during the COVID fiascio ) – ÂŁ150bn total by 2033.

    OK. But why is the Bank of England which is an arm of the British government indemnified by the British tax payer from the bovine stupidity of the British Political class ?

    Anyway, today we learn that 1.5 million ‘asylum seekers’ are not employed and thus costing the Welfare budget ÂŁ8bn per year.

    By my reckoning, those two sums amount to ÂŁ24bn per year. Have I just solved the British governments budget deficit ? We’ve actually got a ÂŁ4bn budget surplus.

    Perhaps I should be the bleedin’ Chancerllorette ?

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