Tax saturation


                   Over the last few weeks there has been a new intensity to demand more and higher taxes. There has been a crescendo in the voices of media commentators, various MPs, and  the left of centre political parties. All they want is tax. Tax is all they want.

                    I have got tired of having to answer endless media queries about my views on a Mansion Tax, a Wealth Tax, an expensive houses tax, another bankers’ bonus tax, a land value tax, a pension savings tax and the rest. Let me anwer just one more time.

                   The UK is not undertaxed.  If you could  tax a country to prosperity our prosperity would be soaring after all the extra taxes and tax rate rises of recent years. You cannot tax a country to prosperity.

                   We are not short of new taxes. In recent years we have had the Carbon Tax, the bankers bonus tax, the Bank balance sheet tax, the landfill tax,  higher Capital Gains Tax,  higher Income Tax rates , Congestion charges, additional oil and gas taxes, higher fuel duty, higher VAT, the aviation  levy, higher car park tariffs from public sector car parks, and a host of others.

                      My view is simple. The UK is now overtaxed. Taxation is now above the optimum level that will contribute to faster growth and rising prosperity in the future. We are overtaxing now in ways which will limit tax capacity in the future, because the economy will be smaller as a result of the current tax levels.

                   I suspect we are also at or above the level of sustainable tax. There are limits to how much you can get out in tax in any given democracy. There is a danger now, as some have written on this blog, that current tax rates are seen as too high by those who have to pay the taxes, and some of them will find legitimate and some illegal means of  not paying all these taxes.

                            My remedy is to set tax rates that maximise the revenue from that particular tax, where the tax needs to be levied. I also think we should return to Mr ( as he then was) Lawson’s admirable approach of regularly abolishing smaller taxes that are expensive to collect but irritating to pay. It would help to improve the mood and raise spirits, if people thought there will be an end to this ever increasing demand for our money, instead of every year making it worse. We will need to get more out of people in the future to pay for the state. It will be easier to do that if we set tax rates now, and a smaller range of taxes now, that speed growth and make collection easier.

                           Sometimes less is more. Grow the cake faster, and then the public sector slice can be larger whilst everyone else is still better off.   The government’s own forecast shows total income tax falling in 2011-12 compared to 2010-11, thanks to the large fall in top earnings and the top tax take. It then shows income tax rising to be just 1% higher in cash terms in 2012-13 than in 2010-11. The government needs to ask itself why Income Tax is in such a poor way with these higher rates.

                           The UK is saturated by tax demands. Some are leaving the country altogether, some are moving savings and assets abroad, some are working less, some are deferring income, some are finding ways round the tax system within the UK.

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  1. Mike Stallard
    Posted March 25, 2012 at 6:41 am | Permalink

    Rather than have a grumble about the inevitable, I want to float a really stupid and utterly impossible idea.

    At the moment, politicians are re-elected through being popular. This means they actually buy their positions with our money. Our (excellent) local MP thinks it is wonderful when he goes to beg for even more money for our failing Comprehensive. An excellent and forward looking local Councillor is chuffed to bits when the Council decides to build an unnecessary new Council Offices in Wisbech. You get the idea.

    How different is was (and could be) if only people who actually paid a reasonable amount of direct taxes got the vote! All the others (and that means me too) who do not really pay much direct tax but are on the receiving end do not get the vote. Only people who pay can decide who shall govern the country.

    I realise that this goes against the weltanschauung (???) and that the past two hundred years of history have been going in the other direction. I realise that the ghastly EU is totally against this sort of thing because it is not Socialist. I also realise that it is never going to happen.

    But that doesn’t make it a good idea. No taxation without contribution.

    • uanime5
      Posted March 25, 2012 at 3:55 pm | Permalink

      Restricting voting only to the wealthy is an affront to democracy. Even those who earn very little and pay very little in taxes have a right to choose their MP.

      • lifelogic
        Posted March 25, 2012 at 6:45 pm | Permalink

        “Even those who earn very little and pay very little in taxes have a right to choose their MP” I agre but not to be bought by politicians using others money.

      • Disaffected
        Posted March 25, 2012 at 7:22 pm | Permalink

        Unions of course have always been fair in the way it votes, elects and takes contributions. Some people still do not realise that there is a little box to tick if they do not want to contribute to the Labour party but want to be part of a union.

        I suppose it is in the interests of welfare lifers to vote to keep the tap on.

      • lola
        Posted March 25, 2012 at 9:00 pm | Permalink

        Tricky isn’t it? ‘Looters’ and ‘moochers’ are the real beneficiaries of a democratic system that supports universal benefits and people who pay no direct taxes because they are below the official income tax threshold. No-one values something that is, or appears to be, free. So why should those with no stake be given the same privilidge to those who do? Doesn’t it just encourage ‘looting’?

    • Vacant Possession
      Posted March 25, 2012 at 8:43 pm | Permalink

      I realise that the ghastly EU is totally against this sort of thing because it is not Socialist.
      It’s not a democracy either. It smells far more like socialism or totalitarian socialist federation to me.
      It’s about denying the rights of the people and controlling them. I am expecting the ministry of love in Brussels to appear RSN and no, I don’t mean the largest concentration of brothels in Europe and you-know-why. Some animals are more equal than other, Van Rompuy (sorry, Naploeon).

      Everyone should have the right to vote and your comment smells like a loonie left stooge honey pot sting for anyone stupid enough to support your postulation.

    • wab
      Posted March 26, 2012 at 12:11 am | Permalink

      Of course it depends what you mean by “a reasonable amount”. Even people who pay no income tax pay VAT, council tax, fuel duty, etc.

      And the idea that people should be able to vote independently of their financial circumstance has nothing to do with the EU. Indeed, Britain has had this system in place since before the war, i.e. since before the EU existed.

    • therealguyfaux
      Posted March 26, 2012 at 2:08 am | Permalink

      Back in 1776 the Yanks rebelled; “taxation without representation=tyranny” was their battle cry. It was not so much that the taxes were onerous (they were NOT, in fact) as that the Americans had no way to vote in someone who could lower them or vote out someone who raised them. What you propose is a complete 180 to that idea– representation without taxation is also tyranny. I must admit, there is a plausibility to that argument; the redistributionist society, allowing the net producers and net consumers alike to vote, works against the interest of the producers once a tipping point is reached. It is Shaw’s saying about how Governments who rob Peter to pay Paul can always count on Paul’s vote. It is my contention that a Government which robs Peter will eventually rob Paul too, in the sense that things can only worsen for everyone, thus defeating the whole purpose. But in the meantime, Paul will keep voting for the thief– and will probably continue so to do. There are two ways this can be addressed: (1) We go back to the 1700’s and have a more restricted franchise, or (2) We somehow create a system that produces a surplus of producers over consumers, which cuts the number of voters who are Pauls. Does anyone have the stomach for (1)? I think most of us would opt for (2). Otherwise, we will either have to go back to (1) eventually, or we will end up in what effectively will become an American analogue, in which people will see that they cannot vote out those who keep raising taxes, and will rebel. Concord Bridge? Bunker Hill? Hardly; but some Gandhi-type figure may have to emerge and create such civil disobedience around the issue that it will just be easier to lower the taxes– unless our politicians want to play Mad Hanoverian. And to tell you the truth, I’m not so sure they wouldn’t.

    • lojolondon
      Posted March 26, 2012 at 8:26 am | Permalink

      In the US, almost no politician would ever get his seat without promising cuts. Unfortunately in the UK, with our Labour party intentionally putting people out of work and then supporting them as a strategy, we have a whole generation who will vote for people who promise them freebies. As you can imagine, the lame and lazy are a group of voters who really do get out and vote every time they are asked, it is their ‘work’ – where they ensure their income for the next 4 years.
      It is a socialist state of mind, and it is supported at every turn by the Biased Broadcasting Corporation.

    • alan jutson
      Posted March 26, 2012 at 9:50 am | Permalink


      I floated a very similar idea a few months ago, yes I got castigated, as I am sure you will, but this thinking is due to absolute frustration with the present system, when the people who consistantly do nothing but take, can out vote those who actually pay.

      If we allow the present system to continue for much longer, it will no doubt fail, as those who can look after themselves eventually will find a way.
      This has been touched on by a number of people even by JR, people will eventually find away around our punitive tax system to suit themselves (by legal means or not), then we will have real problems, because the economy then becomes unmanageable.

      A popular slogan has been, no taxation without representation.

      Perhaps it could equally be, no benefits without contribution.

    • Thon Brocket
      Posted March 26, 2012 at 2:41 pm | Permalink

      Nah, never happen. Restricting votes is non-starter. But, hey, I’m an engineer. I can fix it. It’s a structural problem, a design flaw.

      See, you elect a bunch of legislators, and give ‘em the right to legislate AND tax. Greatest moneymaking scheme ever invented, and you wind up where we are now.

      Fix it this way. Two separately elected legislatures. One to legislate, but can’t tax. Another -separately elected, remember – taxes, but can’t legislate.

      That’s a fundamental re-alignment of politicians’ motives. Nobody gets to climb up on the stump and yell “Elect me and I’ll tax the other guy to featherbed you”. Doesn’t work that way anymore. It’s “Elect me, and I’ll make sure those legislators only get responsible legislation funded” and “Elect me, but I can only legislate as irresponsibly as the Taxers will allow me to.”

      Think about it.

  2. JP Floru
    Posted March 25, 2012 at 6:47 am | Permalink

    The apparent inability of a large number of people in the media and in politics to understand the Laffer curve is bizarre and doesn’t present us with a very flattering image of their intelligence.

    • Mike Stallard
      Posted March 25, 2012 at 11:41 am | Permalink

      What is the Laffer Curve?
      Is it something to do with cricket?

      Reply: If only – it’s the graph of tax revenue collected for a given tax against the rate of the tax. Most agree at 0% and at a 100% rate collection is zero – the interesting bit is what happens in the middle.

      • uanime5
        Posted March 25, 2012 at 3:58 pm | Permalink

        Unfortunately no one knows what the optimum tax rate is and there’s no way to calculate it. Proponent of the Laffer Curve are usually wealthy and use it to justify paying tax cuts for themselves in order to maximise tax revenues.

        The Laffer Curve only works as long as it’s possible to avoid or evade paying taxes, if both are impossible then 100% taxation will result in 100% tax revenues.

        • Gerard Fox
          Posted March 25, 2012 at 5:28 pm | Permalink

          Its intuitively obvious that the higher a tax is the less likely it is to be successful in generating rising revenue. We can agree that if the rate were 100% & there was no scope for avoidance then there would no incentive to earn in the first place, people wouldnt work, negligible income would be earned or tax revenue raised. Equally, if the rate were 0% a lot of income might be earned but clearly no tax revenue raised. So the intuition behind the Laffer curve is sound. Its just a question of establishing what the optimum tax rate is. That may not be a constant over time but an efficient tax rate will exist for the UK economy. Its probably not as high as 52%. Framing the debate in terms of fair tax rates may make you feel better but it doesnt help fund Government services or promote national wealth effectively. And thats doing the people of this country a great disservice.

        • TheProle
          Posted March 26, 2012 at 7:47 am | Permalink

          “The Laffer Curve only works as long as it’s possible to avoid or evade paying taxes, if both are impossible then 100% taxation will result in 100% tax revenues.”

          100% taxation with no avoidance or evasion will give 100% tax revenues, but of a GDP of zero, i.e. zero is actually collected. This is because at 100% rate of tax, no-one will bother to do any work because the receive no benefit from the work.

          The Laffer curve is as much about the tax rates that cause workers to go “can’t be bothered” and stop or reduce working (therefore reducing the tax take) is it is about increasing tax rates increasing tax avoidance and evasion.

          Tax avoidance(legal) and evasion(illegal) is real, and will never be completely abolished no matter how hard politicians try – and as taxes increase, evasion rates certainly increase dramatically. I’ve noticed significant increase in tradesmen offering the “loose” the vat if I pay cash since vat rose to 20%, and I doubt it’s purely coincidental…

        • Thon Brocket
          Posted March 26, 2012 at 2:48 pm | Permalink

          then 100% taxation will result in 100% tax revenues.”

          Kinda missing the point, aren’t you? If I’m going to be taxed at 100%, I’m not going to bother getting out of bed to earn it. 100% of f***-all = f***-all. Revenue at 100% taxation is still zero, efficiencies of collection be damned. THAT’s the Laffer curve, and it’s real. All we’re discussing is its exact shape and where we are on it.

      • lola
        Posted March 25, 2012 at 9:02 pm | Permalink

        The Laffer curve is double edged. Whilst it illustrates that there is a maximum level above which tax revenues decline it is also gives governments the excuse to maximise tax. Why? How about trying to minimise tax?

  3. Christian Wright
    Posted March 25, 2012 at 7:19 am | Permalink

    The Laffer Curve has been clear debunked as junk science. Only the rabid right still pay it any heed. Mainstream right of center pols and political theorists dropped it years ago. Seems John Redwood didn’t get the message.

    John has effectively marginalized himself to the extent that his sphere of influence now encompasses naught but the angry wing of the Nasty Party. This was not inevitable, but rather the consequence of poor choices damaging his credibility.

    There will be not second act for him. It’s over, John.

    Reply: If that is true why do you read my blog and bother to reply?

    • lifelogic
      Posted March 25, 2012 at 8:07 am | Permalink

      Do you really think people will continue to work when taxed at 100%?
      Do you really think that governments spend/invest better than do wealth successful individuals in general? Have you been watching them?

    • Jim
      Posted March 25, 2012 at 8:08 am | Permalink

      Tell you what Christian, we’ll tax you at 60 or 70% and you will have no problem getting up everyday for the rest of your life to go and work for someone else (effectively working as a slave) because there is no Laffer curve. That OK with you?

      Or is your demand for higher taxes purely on someone else, not yourself?

      • uanime5
        Posted March 25, 2012 at 3:59 pm | Permalink

        Better yet why not just tax anyone who earns over £150,000 at 60-70%. After 15 years it will be clear whether there is a Laffer Curve or not.

        • oldtimer
          Posted March 25, 2012 at 5:29 pm | Permalink

          That experiment was tried in the post war years. It is the reason why the UK does not have the benefits of the Mittelstand businesses that contribute so much to the prosperity of Germany. In the UK they went out of business; many packed their bags and went overseas.

        • Captn P
          Posted March 25, 2012 at 6:38 pm | Permalink

          Better for who? In 15 years with 5% inflation even you might be paying it. I suppose you are heavily invested in Euro’s as well? We all know how wrong right wingers were about that.

          Its clear already that high earners have a choice and they have decided not to pay it.

          Why not just pretend the tax is 99% and enjoy yourself?

        • Disaffected
          Posted March 25, 2012 at 7:24 pm | Permalink

          No one should be taxed so they get the smaller proportion of their wage no matter how much they earn. This is just socialist envy and greed. Why should welfare lifers be paid anything? If they choose not to work that is up to them, don’t go scrounging. It is not, and should not, be their right to have welfare. A temporary measure to give a hand up not hand out.

    • alan jutson
      Posted March 25, 2012 at 8:11 am | Permalink


      Simple question, are you in debt because you consistantly spend more than you earn ?.

      If not, I would suggest you practise simple and logical accounting, and your spending is controlled to your income.

      If you are, then you are following, willingly or otherwise, a programme similar to successive governments policies of spend now, no matter what you can afford, and worry later.
      Continue with this policy for a good length of time, and most people would eventually end up bankrupt.

    • John
      Posted March 25, 2012 at 8:49 am | Permalink

      The Laffer curve is irrelevant. We shouldn’t be setting tax rates to get the maximum possible money into the treasury; we should be setting them to have the maximum benefit to the economy.

      • lifelogic
        Posted March 25, 2012 at 1:50 pm | Permalink

        It is true that “We shouldn’t be setting tax rates to get the maximum possible money into the treasury; we should be setting them to have the maximum benefit to the economy.” this is at a lower level than the maximum tax take.
        I think in the UK top rates above 35%-40% actually decrease tax revenues. But the economy runs best for most people, with no more say 20% of GDP being spent by the state

        But the Laffer curve is clearly relevant – if we could, at least, get down to 35% (including NI employee and employer) rates first it would be a start.

        • uanime5
          Posted March 25, 2012 at 4:02 pm | Permalink

          The economy will not work unless there is infrastructure such as schools, hospitals, roads, police, fire fighters, courts, and social workers. A successful economy is incompatible with a low tax economy.

          Your figure 0f a tax rate of 35% of GDP is an arbitrary number with no evidence to show that it will result in a better economy.

          • JimF
            Posted March 25, 2012 at 7:21 pm | Permalink

            This is total rubbish.
            You’d say Singapore is unsuccessful? Or Switzerland? Or USA in the second half of the twentieth century?
            Successful economies wean their population off welfare and into work, or never let them get on it in the first place, and set their tax rates in line with that.

          • lifelogic
            Posted March 25, 2012 at 7:59 pm | Permalink

            It is an arbitrary number but 35% or less is about right for revenue maximisation. Plenty of places run very efficiently at 20% of gdp state expenditure or below you just need fewer people doing nothing useful on the dole or working for the state or working to get round the the state’s silly rules.

          • Alex
            Posted March 25, 2012 at 10:08 pm | Permalink

            “The economy will not work unless there is infrastructure such as schools, hospitals, roads, police, fire fighters, courts, and social workers.”

            very true and you could have all that for much less than the money this and previous UK governments spend. The welfare bill (which you did not include) costs £170 billion a year.

            On the other hand we spend about £10 billion a year on roads, another £10 billion on policing, alittle bit less than that on the courts. the infrastructure and services we need cost far less tha the government actually spends.

          • Richard
            Posted March 25, 2012 at 11:51 pm | Permalink

            uanime5 said “The economy will not work unless there is infrastructure such as … social workers”

            Sorry, I’m laughing too much to post a proper reply.

            Was that really meant to be serious?

          • Bazman
            Posted March 26, 2012 at 6:55 pm | Permalink

            A complex country need infrastructure and a welfare system as uanime5 says. Where such tax measures put in place as many of the fantasists say the infrastructure would crumble and million would be out of work resulting in decline and the companies leaving as Britain would be a bas place top do business. ASI keep pointing out their can be no such thing as a British peasant living of the land and we are certainly not going to take advice from people who’s wealth shields them from everyday problems such as work, housing paying bill etc and taking advice from the likes of lifelogic who’s arguments turn to dust on anything about social justice and claims to live i Monaco. More likely on inheritance in London. The predictable answer is some do not work and live of the state. Have you seen how they live? Starving them will not work. They like most of us are victims of circumstances and upbringing. You cannot just put middle class ideals on them and besides we want your money not to be middle class.

    • Richard1
      Posted March 25, 2012 at 9:29 am | Permalink

      The Laffer Curve has to do with economics not science. Among the many intellectual errors of the left is psuedo-scientific argumentation. The Laffer Curve has not been debunked – there is clear evidence in this and in other countries over many years of the inverse correlation between tax rates and tax receipts. A current example in the UK – pointed out clearly on this site – is Capital Gains Tax. Its been raised from 18% to 28%, and though stock markets and property prices, at least in the South East, have risen sharply, CGT receipts have fallen.

      You should check your facts before making contributions to this site.

      • uanime5
        Posted March 25, 2012 at 4:05 pm | Permalink

        Given that most people can’t afford to purchase a house, due to rising house prices, this may explain why fewer people are buying houses and CGT receipts have fallen.

        What you have demonstrated is a common failing of the right; solely attributing one factor to a problem that has many factors.

        Also which countries have proved the Laffer Curve correct? Outside of the USA and the UK it’s almost unheard of.

        • oldtimer
          Posted March 25, 2012 at 5:33 pm | Permalink

          Your house (if you are fortunate enough to own one and is your place of residence) is not an asset subject to CGT! Do check the tax rules.

          • Gerard Fox
            Posted March 25, 2012 at 6:55 pm | Permalink

            But second house sales by investors would be liable to CGT.

        • Alex
          Posted March 25, 2012 at 10:10 pm | Permalink

          “Given that most people can’t afford to purchase a house, due to rising house prices, this may explain why fewer people are buying houses and CGT receipts have fallen.”

          Don’t know where to begin with this nonsense. There are as many people able to buy a house as there are people selling, give or take a bit. It is called a free market.

          there is no CGT arising on the disposal of a primary residence, s what is your argument???

        • Richard1
          Posted March 26, 2012 at 7:22 am | Permalink

          There are numerous examples. Many Eastern European countries now have a flat tax. When Russia cut the rate from 30% to 13% recepits rose 3x. The Laffer Curve is uncomfortable for the Left but is certainly valid.

          • Bazman
            Posted March 26, 2012 at 7:01 pm | Permalink

            Russian tax system and Russian life? What would you know about life in Russia Richard1? Nothing I suspect. If you did you would not compare a country like Britain to it or use Russian as an example for anything other than how not to run a country.
            The wild west is not to far from the truth and a soft lad like yourself would be eaten alive and thats by the woman!

      • stred
        Posted March 26, 2012 at 9:36 am | Permalink

        And inflation indexation has been taken away too, more than doubling the tax on assets held for over 20 years. People with retirement nest eggs have been putting of selling in the hope that this unfair removal will be changed back to N.Lawson’s system, which took devaluation into account and was simple to calculate. At present, they can also avoid paying CG tax by not selling and leaving it to the family. However, we were warned by a tax accountant that it may be possible to be caught twice by CG and inheritance tax unless the transfer is handled carefully.

        Perhaps if some small investors could get together and cough up £150k they could explain this to Mr Cameron at one of his privately cooked dinners at no 10.

        • stred
          Posted March 26, 2012 at 9:37 am | Permalink

          Sorry. off not of

    • libertarian
      Posted March 25, 2012 at 11:26 am | Permalink

      Dear Christian

      You are obviously very young and not around during the 1970’s when the top rate of tax hit 98% and the UK crashed, whole industries like car makers, shipbuilders, steel and coal were decimated. It took an incoming government in 79 to reduce taxation and put in place the ability to grow the economy . Manufacturing only recovered then due to a lower tax regime.

      By the way John never mentioned the laffer curve, he doesn’t need to. We don’t need theories, the practise of every day reality is quite proof enough. The huge range of taxes and duties ( especially on fuel) is why there are 2.7 million unemployed and stagnant markets.

      Only fascist control freak socialists are happy to carry on stealing the hard earned wages of the workers

      • uanime5
        Posted March 25, 2012 at 4:07 pm | Permalink

        Tax revenues increased because growth and salaries increased due to a large amount of easy credit. This lasted until the bubble burst causing a recession, high unemployment, and a loss of tax revenues.

        • lola
          Posted March 25, 2012 at 9:08 pm | Permalink

          True, the massive unwarranted expansion of money and credit from 1997 to 2008, plus the proto nationalisation of the banking system by oppressive mis-regulation, precipitated the banking crisis.

    • Bob
      Posted March 25, 2012 at 11:29 am | Permalink

      @Christian Wright
      You cannot debunk the Laffer Curve.
      History provides plenty of evidence to support it, and common sense tells you that people who are capable of generating wealth are hardly likely to voluntarily hand over more than half of it to support wasteful spending by a bloated public sector.

      “We hold these truths to be self-evident…”

      • uanime5
        Posted March 25, 2012 at 4:08 pm | Permalink

        I noticed that you couldn’t provide any evidence from history to support the Laffer Curve. I take it that’s because you couldn’t find any.

        reply: The 1980s cuts from 83p to 60p to 40p each produced a surge of extra revenue and a rising proportion of total icnome tax paid by the top earners. What more do you want?

        • lifelogic
          Posted March 25, 2012 at 8:02 pm | Permalink

          The evidence to support the Laffer Curve is, like the evidence to support evolution, overwhelming.

        • Bazman
          Posted March 26, 2012 at 7:02 pm | Permalink

          They also cost a lot of money too John, so that only halve the truth.

    • Adam5x5
      Posted March 25, 2012 at 12:14 pm | Permalink

      Could you provide a link to a peer reviewed paper that proves the laffer curve o is junk?

      • uanime5
        Posted March 25, 2012 at 7:21 pm | Permalink

        Economics isn’t usually peer reviewed, which is why it’s so full of nonsense. As such there aren’t any peer reviewed studies showing the Laffer Curve works.

        Regarding academic papers showing the fallacy of the Laffer Curve I’d recommend “Some analytics of the laffer curve” by Malcomson, published in the Journal of Public Economics (1986) 29 (3) on page 263.

        • Bob
          Posted March 25, 2012 at 9:01 pm | Permalink

          If you were earning a million bucks a year, would you pay half of it to HMRC or would you move to a more reasonably taxed country with better food, better weather and better government?

          • Bazman
            Posted March 26, 2012 at 7:06 pm | Permalink

            Depends if you could find anyone daft enough to pay you the same in another country and then there is the consideration of living abroad in another strange country away from contacts an d family. Life in the Isle of Man or the Cayman islands. No thanks. Personally I think bluffs need to be called and many can just sling their hooks as they are no doubt fond of telling everyone “They do not respond to threats”. Same rules. Ram it.

    • Steven Whitfield
      Posted March 25, 2012 at 12:24 pm | Permalink

      “The Laffer Curve has been clear debunked as junk science. Only the rabid right still pay it any heed. Mainstream right of center pols and political theorists dropped it years ago. Seems John Redwood didn’t get the message”.

      Why is the Laffer Curve junk science ?. Do you believe like Dennis Healey that there is more of a linear relationship between tax revenue and rate ?. Then why don’t we put the top rate back up to 80% and pay off the deficit and keep on raising spending ?

      Taxing top earners at 10% and 95% would yield low returns for obvious reasons.

      Therefore it stands to reason (for anyone with an O level in Maths) there must be a turning point, somewhere in the middle that gives an optimum tax revenue ?. What is the problem with finding this point ?.

      No, the Laffer curve is ignored by the majority because it is an inconvenient truth . It doesn’t mean that John Redwood is wrong. The majority of opinion formers just aren’t interested in a practical approach.

      I remember JR also being isolated over EU membership proposals -was he wrong about that too?. He must be really kicking himself now for not listening to “Mainstream right of center pols and political theorists” .

      Reply Thanks for ther suppo0rt. There is a Laffer curve, as most sensible people believe. The issue its exact shape, which we dispute.

      • uanime5
        Posted March 25, 2012 at 4:14 pm | Permalink

        Tax rates at 95% would generate far more revenue than tax rates at 10%, which highlights the main problem with the Laffer Curve; higher taxes result in more revenue that lower taxes. Yet all proponents of the Laffer Curve seem to believe that lower taxes always generate more revenue.

        The Laffer Curved is ignored by most people because it’s only ever used by the wealthy to call for tax breaks for themselves, never for tax breaks for the lowest earners or raising taxes for the highest earners.

        • Captn P
          Posted March 25, 2012 at 6:56 pm | Permalink

          The laffer curve says that they would generate around the same income. (its curved). As concept it makes perfect sense.

          You seem to be ignoring the idea that someone with 85% more of their income would not spend or invest it into the economy, even a modest reduction in government and a corresponding cut in income tax would allow many billions to flow into the economy.

          Personally I would also be much happier to spend my own money, rather than having a civil servant deciding how much of he can spend before the 5th of April. Have you noticed the amount of road/street works that have started over the last two weeks? A most efficient way to spend money, save as much as possible, then spend it all in the last month of the financial year. There are countless examples of this type of financial management.

        • Lindsay McDougall
          Posted March 25, 2012 at 7:26 pm | Permalink

          “Unearned income” was taxed at 98% in Dennis Healey’s time and the yield was b____r all (or Llareggub if you prefer).

        • lola
          Posted March 25, 2012 at 9:10 pm | Permalink

          Tax at 95% collects more tax than tax at 10%. Nope.

    • outsider
      Posted March 25, 2012 at 1:39 pm | Permalink

      Dear Mr Wright,
      You say that “it’s over” for Mr Redwood, presumably referring to high office. Do you not think that Mr Redwood is actually pioneering the political future rather than slinking away to earn big, easy bucks in the City, which he could so easily have done? Mr Redwood is the only senior UK politician who is actually engaging, day by day, 7 days a week, in debate with the public over political and economic ideas. He wants feedback. He does not expect readers to agree with him all the time, or even ever, so long as they refrain from name-calling, libel and foul language and he obviously spends a great deal of time and effort moderating comment to maintain the civilised level of responses so obviously lacking elsewhere. For that he deserves gratitude and respect rather than abuse.

      As to Arthur Laffer, you are right that the curve is not rigorous economics; I recall making that point about 30 years ago. But it is a useful concept and a lot easier than trying to get one’s tongue round “the elasticity of what is being taxed to the level at which it is taxed”. Nigel Lawson demonstrated in the 1980s, for instance over corporation tax, that lower tax rates with fewer allowances can increase revenue. But the tax argument is about much more. Lower tax rates distort behaviour less (hence the high tax on tobacco) and there is also an important debate to be had over the relations between tax rates and economic growth. Mr Redwood provides a platform for anyone who is prepared to engage in such ideas, rather than just rant.

    • Ulysses
      Posted March 25, 2012 at 4:27 pm | Permalink

      Whenever I read a comment like this I am reminded that is overtaxed people like me that are probably paying for the writer’s wages (public servant, teacher, nurse etc) or their welfare support. Keep attempting to squeeze us and we will pay less I promise you. I am moving my company’s activities to Dubai and Singapore because I have had enough of paying for the lazy, feckless and stupid in England who demand even more of my hard-earned wealth.

  4. A.Sedgwick
    Posted March 25, 2012 at 7:29 am | Permalink

    Mr.Osborne’s standing was based on his conference speech committing to £1m IHT relief. It saw Brown call off an election he very probably would have held and won. The resultant Conservative poll jump outflanked Brown.

    The clear message did not register and amazingly Osborne morphed into the micromanagement of Brown. Nigel Lawson was the best Chancellor I have seen and he remains just as astute at 80 years.

  5. Paul Danon
    Posted March 25, 2012 at 7:35 am | Permalink

    A Mr Hitchens points out, some of those who campaign for liberal drug-laws are themselves users. Some who campaign for more taxes would similarly benefit from yet more public spending. The biggest recent tax-rise (not mentioned in the budget) is all this quantitative easing. For all the talk of austerity, public spending is going up (as John has pointed out). Alleged cuts give the left rhetorical ammo while an actual lack of cuts means we don’t even get the benefit of a leaner public sector. Nationalising the banks adds insult to injury and encourages bad financial practice.

    While we ought to be slashing the state’s role in vast swathes of national life, we tinker with duty on cigarettes, old folks’ thresholds and taxes which few of us will get anywhere near paying. We’re nowhere near realising the state we’re in; to hear Mr Osborne on Wednesday you’d think it was business as usual – just a little tweak here and there.

    • Mike Stallard
      Posted March 25, 2012 at 11:42 am | Permalink

      Well said!

    • PaulDirac
      Posted March 25, 2012 at 2:37 pm | Permalink

      The argument about taxation misses out the most important point: The government is taking our legally earned money and (at least 50%) wasting it on people and projects which are useless to the majority (HS2, wind turbines and others).

  6. lifelogic
    Posted March 25, 2012 at 7:40 am | Permalink

    As you say you cannot tax a country to prosperity (other than a country with very little tax that needs some basic ownership laws, law & order and defence). Governments should be spending 20% not wasting and misdirecting GDP not 50%.

    Clearly taking money off the successful (who tend to be good an investing and managing money that is why they usually have it) then giving it to the state (who are dreadful at spending it) is not a good plan.

    The state tends to give it to Quangos (with their mates on), trying to buy votes, daft PR schemes, green tosh, equality nonsense, subsidies, diverting to the feckless, millennium domes, white elephant sports stadia and jumped up school sports days, over regulation of virtually everything …………

    No one with substantial capital should live in the UK unless they want to give it all slowly to the state and watch them waste it. Taxes, inflation & finally IHT will slowly tax it all off them. The only exception is Non Doms or people with very good and convoluted tax structures.

    The other negative of over taxation is the convoluted tax structures and the pointless jobs thus created in the convoluted tax structure industry and the behaviour adjustments made to the over taxation.

    • lifelogic
      Posted March 25, 2012 at 7:59 am | Permalink

      Also the government wastes so much that they often actually make a loss on the average taxpayer. They are thus heavily dependent on the high end tax payers who pay perhaps £1M PA and consume virtually nothing of public services in return. A few of these to go leaves the government with a very big hole to fill.

      Just get rid of pay offs above say 3 month pay and fire one in two of the over paid, over pensioned and usually pointless (or worse) in the state sector. It is very simple really just send the right signal that the UK is going for real growth and a small efficient state and will welcome success for a change. Rather than just mugging them they are not stu.

      • Susan
        Posted March 25, 2012 at 4:19 pm | Permalink


        Slow down, not even a miracle worker could bring in all the measures you want so quickly, let alone a Government.

        Have a little bit of empathy too, people are very afraid for their future at the moment. Most ordinary members of the public do not have the luxury to just leave the Country when Government policy does not suit them.

        • lifelogic
          Posted March 25, 2012 at 8:42 pm | Permalink

          No I agree many cannot leave and are then 50%+ enslaved, in effect, by the state. Or they just go on benefits. So growth is negative, more rich leave, tax revenue falls, jobs go, positive feedback …………..

          • Bazman
            Posted March 26, 2012 at 7:09 pm | Permalink

            The country is to be governed for the benefit of the rich in the hope they will chuck us a few quid and not leave. Fantasy.
            Interesting as to how much of our infrastructure they have used to get this wealth. Infrastructure that you say should be paid for by the users. They are massive user of infrastructure.

        • lifelogic
          Posted March 25, 2012 at 9:19 pm | Permalink

          Perhaps Cameron could at least more a little in the right direction for a change.

    • Bazman
      Posted March 25, 2012 at 9:42 am | Permalink

      Its prayer time again..

    • lifelogic
      Posted March 25, 2012 at 10:15 am | Permalink

      Chancellor George Osborne is reportedly pushing for a U-turn over plans for a third runway at Heathrow – perhaps he does have some common sense after all.

      One at Heathrow & one at Gatwick and connect the two with a high speed 15 minute train round the M25 (and cancel the absurd HS2 and the green tosh to pay for it many times over). One hub airport with five runways as is clearly needed get on with it.

      Dubai is planning one with 6 runways I see.

      • Mark
        Posted March 25, 2012 at 3:53 pm | Permalink

        They still have a lot of desert they can easily build on.

      • Robert
        Posted March 25, 2012 at 5:55 pm | Permalink

        I don’t think that we will need a third runway. The unsustainable level of Air Passenger Duty is destroying our aviation industry.

        I read yesterday that travel between Birmingham and Germany had increased dramatically as travellers had discovered it was cheaper to fly to Frankfurt and then long haul (to China for e.g.) for a fraction of the tax.

        Ah well BA’s (and Britain’s) loss is Lufthana’s (and Germany’s) gain.

        Now then, point the rifle at your foot, take aim, fire!

        • Caterpillar
          Posted March 25, 2012 at 7:10 pm | Permalink


          At least the B’ham runway extension has reached preferred contractor stage, and should hopefully be operational by 2014, allowing large longhaul from Birmingham International. Sadly there are environmental campaigners trying to stop it, based on the ‘view’ that the airline industry is oversubsidized in not paying suffciently for its externalities. Personally I agree with you that APD needs to be re-examined. As long as the runway extension doesn’t get blocked, it will be interesting to see whether from 2014 people take direct B’ham-China flights or chose to link to Frankfurt.

          [My usual biased opinion, its a pity the B’ham International possibilities are not being connected with London more rapidly. HS2 seems a very long timescale]

        • David John Wilson
          Posted March 26, 2012 at 11:19 am | Permalink

          What we need is fewer planes stacking while they wait to land at Heathrow. An extra runway is not a solution as it just means more planes destroying the peace of those living under flight paths.
          What is needed is a change to the way flights are taxed. This should preferably be done by a fuel tax which would cause the airlines to put more pressure on reducing stacking. If this cannot be done then a tax on flights calculated by plane size would be an alternative. Either of these would help to reduce the number of nearly empty flights that take place merely to maintain access to slots at Heathrow.
          If the government approves an extra runway will it increase its grant to those councils under the stacks and flight path?

    • lifelogic
      Posted March 25, 2012 at 10:26 am | Permalink

      I am not surprised by the cash for access story, after all why else would we have some many daft laws on the statute book that are clearly for the benefit of certain individual companies and not the public. I am however surprised by how crass they can be in selling it all. They make bent used car salesmen look sophisticated by comparison.

      Peter Cruddas is surely either selling access to government for cash or he is perhaps committing the offence of “obtaining money by deception”. Which I wonder does he think he was doing.

  7. Kevin Ronald Lohse
    Posted March 25, 2012 at 7:42 am | Permalink

    Far more importantly, our best and brightest will up sticks and emigrate, as happened in the Heath/Wilson/Callaghan era when the tax system last inhibited the desire to improve one’s life. It would be interesting to see the occupations/qualifications of those who even now are leaving the UK permanently.

    • alan jutson
      Posted March 25, 2012 at 8:17 am | Permalink


      Two types are leaving.
      The younger ones have some form of qualification, drive, enthusiasm, and some money, and are looking to improve the lifestyle for themselves and their families.

      The older have money, and are looking to preserve it to live mainly in the sunshine.

      The people coming in …………Make your own mind up…… ?.

      • Boudicca
        Posted March 25, 2012 at 6:37 pm | Permalink

        I’ve advised my sons, aged 23 and 21 to leave the UK as soon as they’ve got their degrees. The older one has done his part-time whilst working – he should have little trouble getting into Australia or Canada. The younger one is doing a 4-year degree with the 3rd year working (in the Insurance Sector) and I am sure he will be able to get out as well. This country has nothing to offer them. If they go, hopefully I’ll be able to sell up and follow them out.

        • Disaffected
          Posted March 25, 2012 at 7:27 pm | Permalink

          Surprisingly I have told my children to do the same thing. They deserve a future that politicians cannot offer and do not have the courage to implement.

          • Rootar
            Posted March 26, 2012 at 11:28 am | Permalink

            I have advised my sons to do the same. One has already gone and I am working on the other two. There are better futures elsewhere – places where their children won’t be taxed to pay for massive over borrowing by today’s Politicians.

    • Bazman
      Posted March 25, 2012 at 9:41 am | Permalink

      That why London house price are crashing then? All the rich people are leaving. Fantasy.

      • lifelogic
        Posted March 25, 2012 at 1:53 pm | Permalink

        London is great for rich non doms who only pay tax on UK income. It proves our point perfectly – lets tax everyone at Non Dom sort of rates.

        • Bazman
          Posted March 25, 2012 at 6:29 pm | Permalink

          Problem being that not everyone has non dom income and the country is expensive to run for good reason. Though nobody can argue against more efficient spending.

          • lifelogic
            Posted March 25, 2012 at 8:45 pm | Permalink

            No but they could be taxed far less on their UK income.

      • Mark
        Posted March 25, 2012 at 3:55 pm | Permalink

        Wait a few months for the data. I’d expect the budget measures will put a big chill on the top end London property market.

        • Yudansha
          Posted March 25, 2012 at 8:04 pm | Permalink

          Property in the SW appears to have been dropping dramatically in the past few weeks.

    • uanime5
      Posted March 25, 2012 at 4:19 pm | Permalink

      Care to explain why there were people working in jobs where they were taxes at over 80%? It seems that not everyone will up sticks and emigrate because of high taxes.

      • Disaffected
        Posted March 25, 2012 at 7:28 pm | Permalink

        As a general rule of thumb and ONS stats, the calibre of the people leaving the UK is better than those arriving.

        • lifelogic
          Posted March 25, 2012 at 8:48 pm | Permalink

          Indeed by some margin I would say. The UK tax system encourages the feckless in and the productive out.

      • Bob
        Posted March 25, 2012 at 8:00 pm | Permalink

        Even Ken Livingstone resents paying 52%.
        Bob Geldof and Bono too.

        The Beckhams are selling their UK home and will be staying the the good old US of A.


        The reasons to leave are more compelling than ever, as the threat of wealth taxes loom.

  8. David B
    Posted March 25, 2012 at 7:44 am | Permalink

    But why are we over taxed? I would suggest we are over governed. That has happened because the civil service and government think they know what is best for us and that they are better places to achieve our desires

    A lot of the services that are provided are not required . We need to review what government do and cut 20 to 30% out of it. That is the only way we can reduce tax to sustainable level

    • John
      Posted March 25, 2012 at 8:54 am | Permalink

      Do you really think a smaller government will spontaneously decide to spend less? We first need to have a law limiting spending to (say) 110% of tax revenue, a figure which is gradually reduced to 90% or so, meanwhile campaigning to reduce tax rates. That is the only way to reduce government size. If a public sector manager spends more than his department has, then (s)he should be personally liable for that money.

      • David B
        Posted March 25, 2012 at 1:47 pm | Permalink

        John, a smaller government may not decide to spend less but a large government definately cannot cut spending. The current debate shows that. Legislation is also pointless in this situation. Remember we have legislation in place to half the budget deficit in 4 years from 2010, legislation to reduce carbon emotion, legislation to eliminate child poverty , etc. and all are pointless and meaningless. To have legislation you suggest will fall into that category as it cannot be enforced and can be repealed.

        The only way to cut real spending is for government to do less, meaning it spends as the ability to spend less.

    • lifelogic
      Posted March 25, 2012 at 9:44 am | Permalink

      20-30% would be very easy to cut, without any one even really noticing, apart from the civil servants/quangos doing nothing useful or worse – they would have to released to get a real job in the private sector. Hopefully a job that would help real growth and teach them how industry really works.

    • Bob
      Posted March 25, 2012 at 11:45 am | Permalink

      Well if Osborne were to cut a billion from foreign aid he wouldn’t need to freeze the pensioners personal allowances.

      Either his priorities are wrong or the coalition is being led by the liberals not conservatives.

    • Bill
      Posted March 25, 2012 at 11:55 am | Permalink


      Except the 20-30% part which is not nearly enough.

      The State should only provide for it’s citizens that which they cannot provide for themselves. Defence, policing, economic safety net. That should be it.

    • Boudicca
      Posted March 25, 2012 at 6:40 pm | Permalink

      In the 1960s our government consisted of:

      650 MPs and approx 600 Lords in Westminster
      County Councils
      Local Authorities
      Parish Councils

      Now our government consists of:

      The EU (£50 million + a day, and rising)
      650 MPs and about 1000 Lords
      Quangos – too many to name
      The Scottish Assembly
      The Welsh Assembly
      The NI Assembly
      County Councils
      Unitary Authorities
      Local Authorities
      Parish Councils

      They are all bleeding the productive sector of the economy dry. We are overgoverned. For a start, we should get out of the EU.

      • Colin
        Posted March 26, 2012 at 3:59 am | Permalink

        I couldn’t agree more.

        Not only are we over governed, but the scale of fraud, waste and abuse in relation to our money is titanic. Only the other week it was reported that the government had spent almost £1.5 Billion to save £100 Million. If this is even partially true there has to be an investigation into wrong doing. This level of abuse could not have happened entirely within the law, at the very least someone made some promises in return for fees. It’s clear that those promises went unfulfilled.

        In addition, the idea that some people who work and earn money should not have to pay taxes is, in my opinion morally wrong, as well as stupid. Everyone who earns should pay something, if only to reinforce the link between earning and contributing. Taking low earners out of the tax system is nothing more than gesture politics of the worst kind, never mind being a piss take on those of us who pay far too much tax…

        • alan jutson
          Posted March 26, 2012 at 10:14 am | Permalink

          “Taking low earners out of the tax system is nothing more than gesture politics”.

          Not really, whilst benefits are completely tax free, earnings without a personal allowance would be taxed from scratch.

          Let us all (no matter what your income) have a personal allowance which is equivelent to the minimum annual wage, before any tax is due, and let us then perhaps tax benefits over this amount as well (without raising it to compensate) with the total cap on benefits being the average wage after stoppages.

          We need to encourage work !

      • Lindsay McDougall
        Posted March 26, 2012 at 1:46 pm | Permalink

        Given your lovely name, may I second your idea to reduce our subservience to Rome. Apart from the collesium, Rome is famous for three things – the Church of Rome, the Treaty of Rome and the Woman of Rome. Only the third of these has ever been of the slightest use to humanity, and she was ficticious.

      • Robert Taggart
        Posted March 27, 2012 at 10:18 am | Permalink

        Bouddica ,dear, agree with the final sentiment.

        But, fearing it to be unlikely – the following three tiers of politics should more than suffice –
        The Continental Parliament – Europe.
        The National Parliament – England (not UKGBNI).
        A Unitary Authority – Stockport (for moi).
        These would all be elected on a five-yearly basis with one member per constituency.
        Sorted !

  9. Caterpillar
    Posted March 25, 2012 at 7:54 am | Permalink

    Yes, there does seem to be much talk but perhaps without clear options being outlined. Perhaps I haven’t been listening/reading suffciently but I would like a clear understanding from the Coalition together, the Conservatives, the LDs and Lab on the follwing;

    (i) What tax revenue as proportion of GDP do you think the country should have (a) ~40%, (b) ~30% similar to Canada, (c) ~50% similar to Sweden/Denmark. This effects direction after the structural deficit is tackled – I’d like to be sure that the major parties know where they were aiming… and thus what would be cut/expanded.
    (ii) Where do parties want to simplfy and flatten, or complicate and target taxation?
    (iii) Should taxation move from personal/corporate income focus to a wealth (and increased) consumption focus? I.e. whatever the level, and simplicity, what mode of taxation does each party favour?
    (iv) What are seen as the market failures that should be addressed with tax breaks or higher taxation, why and how?

    • outsider
      Posted March 25, 2012 at 3:50 pm | Permalink

      That sounds a great agenda. But to answer i) you would also have to ask (v) what functions do voters want the state to perform? If that includes the free NHS and school education plus a comprehensive welfare system, you are not going to get much below about 37% over the cycle, unless Mr Duncan-Smith’s welfare reforms are enacted in full and spectacularly achieve their aims.

      • Caterpillar
        Posted March 25, 2012 at 7:23 pm | Permalink


        I agree that (v) needs to be aired particularly given your examples. The Coalition might cite Canada as an example, but Canada did not ring fence when it cut.

        • Bob
          Posted March 26, 2012 at 8:25 am | Permalink

          “Canada did not ring fence when it cut.”

          What? not even their foreign aid budget?

  10. Brian Tomkinson
    Posted March 25, 2012 at 7:55 am | Permalink

    That’s what happens when political parties pretend they want to reduce spending to remove the deficit but instead just increase taxation. I don’t want “the public sector slice” to be larger I want it to be much smaller. We know that will not happen under the Conservatives, Labour or LibDem – none of you can resist spending the taxpayers’ money. Apart from the scandal over cash for access, I read today that Osborne thought it would be clever to reduce the 50% tax rate next year rather than this so that he will have a boom in extra taxation in 2014/2015, election year, because those in that bracket will delay their salaries until the new 45% rate is introduced. Of course his tax take in 2013/2014 will be correspondingly lower but that doesn’t seem to matter – the election is all that counts! I have zero confidence in this government. Osborne becomes more like a mixture of Brown and Mandelson daily. Why can’t we have someone who puts the country first rather than their own political ambitions? You never know we might just want to vote for them!

  11. alan jutson
    Posted March 25, 2012 at 8:01 am | Permalink

    I could not agree more with your comments, but until Politicians decide not to bribe the voters with their own, or even worse, borrowed money for votes, then the situation will not change.

    I have written before about limiting total expenditure in any current year, to 80% of the known tax take of the previous year as a very simple solution. So simple is it, that you live within your known needs, not some guess about what your income may be in 5 years time.
    You then have 20% left to pay off debt, or save for a rainy day.
    I do not understand why government does not think of managing its finances in the same way.
    Most families operate this way, and it is easily understood.
    You simply cut planned expenditure to 80% of your known (last years) income.

    The idea that you can keep on increasing tax takes, as you rightly say, leads eventually leads to a larger alternative economy, where the government then gets diddly squat.
    Just look at some of the Southern European economies for an example.

  12. Stephen Almond
    Posted March 25, 2012 at 8:09 am | Permalink

    Try suggesting this thought experiment the next time the media enquire about tax rates.
    Imagine we were able to cut all taxes in half tomorrow. What do you think would be the effect on the economy? People would pay half of their current income tax. VAT would be only 10%. Companies would pay half of current corporation tax.
    Consumers would be able to spend more. Retailers could reduce prices yet still make more profit. Manufacturers could reduce prices, make more items, employ more people.
    None of this can be done in an instant. of course, but the trend should be obvious – even to the media.

    Incidentally, you seem to assume that tax decisions are simply a matter of deciding “how much to take”. You do recall that it is our money – we earned it!

    One final thing. You say “Taxation is now above the optimum level that will contribute to faster growth and rising prosperity in the future.” Is there some figure above zero for this optimum level?

    • uanime5
      Posted March 25, 2012 at 4:27 pm | Permalink

      One problem is that people may invest this extra money or use it to pay their debts/mortgage. This will not result in higher consumer spending, a reduction in retail prices, or more manufacture. Simply giving people more money will not automatically result in higher customer spending.

      Also unless you can magically halve the cost of the police, courts, NHS, fire fighters, Councils and Parliament, social workers, and benefits halving taxes will result in the Government having to borrow more money, resulting in a larger debt and higher interest payments.

      Tax cuts shouldn’t be attempted without a surplus as it’s cheaper to raise money in taxation than borrow it.

      • Mark
        Posted March 25, 2012 at 10:34 pm | Permalink

        Since we’ve borrowed the money for our debts abroad, repaying that would be a good idea. Building up larger debts is not a good idea. Ask the Greeks.

  13. Acorn
    Posted March 25, 2012 at 8:16 am | Permalink

    David B Smith has an excellent article he did for IEA back in 09. It demonstrates how the economy flat lines when it hits the 40% tax ceiling. . Chart 3 in particular.

    My amateur macroeconomic studies have come full circle now, to “Post Keynesian” economics. The following is a link to a left-wing libertarian MMTer from down under, commenting on the UK budget. By about 2015, I may be in a position to decide which economic model actually works … or not. .

    • uanime5
      Posted March 25, 2012 at 4:35 pm | Permalink

      I predict that the left-wing libertarian MMTer will be right. Here’s what you have to look forward to.

      “What I can say is that [the 2012 British Budget] relies on the private sector to increase its debt level (and burden) for the growth forecasts. There are two points to make about that: (a) it is unlikely to happen; and (b) it is madness as the economy struggles to extricate itself from a severe balance sheet recession to be withdrawing public spending support for growth and the private deleveraging effort that has to take place before the private sector will take responsibility for growth.

      “That strategy will compound the fragilities that pushed Britain into the severe 6-quarter recession and eventually fail.”

  14. Anthony Harrison
    Posted March 25, 2012 at 8:31 am | Permalink

    Yes indeed, Mr Redwood – a thoroughly commendable post that should be on the front page of every newspaper. I’d just point out that your Party leads the present administration, a Party that was traditionally (well, at least in theory) in favour of smaller government, moderate taxes and so on, but which appears barely distinguishable from Labour.
    When I say this is one of the reasons I’m now voting UKIP you might riposte with the standard comment about that Party’s unelectability, but what else can conservative or libertarian voters do? Voting for the Tories only confirms the belief of that Party’s leaders that tax & spend is something Tory voters are happy with. Practically every post you write here (which I read unfailingly, and mostly applaud) underlines the contradiction between your thinking, and that of your Party leaders. I don’t get it.

    • Bob
      Posted March 25, 2012 at 8:10 pm | Permalink

      @Anthony Harrison
      Apart from his partisan loyalty, I believe that JRs politics are more in line with UKIP that the Tories, so I think he should stop bashing them and lend them support, as did Lord Tebbit.

  15. Andy Man
    Posted March 25, 2012 at 8:34 am | Permalink

    The UK is not overtaxed.
    It is massively overtaxed.
    Government should be a servant of the people not it’s feudal lord demanding ever higher taxes for highly questionable “services”.
    Big state enthusiasts that want to squeeze the life out of the economy should realise it isn’t their money, nor is it the right of the government to decide how much it allows us to keep of OUR money.

  16. Lindsay McDougall
    Posted March 25, 2012 at 8:44 am | Permalink

    Agreed 100% on taxes. However, no matter how hard we try, we cannnot guarantee growth. There is no alternative to holding the increase in real public expenditure to zero; to do that, there must be no secret cows.

    Do we get value for money on the NHS drugs bill?
    Is it right that a judge can order the NHS to purchase an expensive new drug in order to treat a 75 year old, providing the treatment free at the point of consumption?
    Should benefits be index linked when the nation cannot afford them?
    Do we get value for money from our contributions to the EU and UN?
    Is there any point in a loss making white elephant like HS2?
    Should pensioners receive little goodies like cheap travel, free television and a winter fuel allowance rather than a slightly higher pension?
    Can we afford not to raise the retirement age by 1 year in each parliament until it reaches 70?
    Can we afford the Barnett formula for Scottish public expenditure?

    The list is more or less endless.

  17. Drayner
    Posted March 25, 2012 at 8:46 am | Permalink

    Taxation is too high already, anyone with a business knows they are simply being used as a cash cow. Its marginally less noticeable to the ordinary punter as his pockets get rifled largely without them paying too much attention. Maybe the fuel issue is where its more noticeable.

    It would be great to know just exactly WHY we need to be taxed at the rate we currently are. How much of it is going towards the various things we are told we need and how much of it goes towards paying back the money borrowed to pay for the stuff we were told we need.

    The country is in a mess now. I was just thinking about my old schoolmates, nearly half of my classmates have moved away from the UK, most of them to Australia, simply because they are sick of life here. Anecdotal of course but there really doesn’t seem to be any alternative viewpoint being given by the main parties or the media. Its pretty dispiriting stuff really. The time is right for a total new broom just like Thatcher did at the time. But there doesnt seem to be any stomach for the fight.

    As for the laffer curve being debunked as junk science. Oh dear.. another economically illiterate left winger rears his ugly head as they tend to do frequently. Stick to faking concern about minorities and their issues and leave the economics to adults.

  18. Alan Wheatley
    Posted March 25, 2012 at 8:49 am | Permalink

    I agree.

    As to the endless queries, I would like to offer what I hope is a helpful suggestion. For some the word, no matter how eloquent, is not enough and understanding is helped by the use of graphics. For instance, the fact that 40% can raise more tax than 50% if it is from a bigger pot can be more readily grasped if presented diagrammatically. Graphics could also make clear the difference between debit and deficit, that the debt still goes up even if the deficit is falling, and that due to interest payments the higher the debt the less of the revenue take there is left to be spent.

    There are many other examples.

    A few months ago there was a programme on BBC TV in which graphics were used very effectively to show that the poorest are net beneficiaries from the state and the wealthiest are by far and away the largest contributors to the state. Perhaps the government should send a DVD of this programme to all tax payers if they really want them to understand where the money comes from and goes.

    I do not suggest graphics in a blog, but why not in an article on the web site, John?

    • uanime5
      Posted March 25, 2012 at 4:50 pm | Permalink

      “For instance, the fact that 40% can raise more tax than 50% if it is from a bigger pot can be more readily grasped if presented diagrammatically.”

      The problem is that there’s no guarantee that the pot will increase sufficiently to make up the lost tax revenue due to the tax cut. For example if 100 people earning £100 are tax at the 50% rate the Government gets £5,000, however if the rate is reduce to 40% then you need to increase taxpayers by 25% (125 people) to get £5,000. Unless lowering the tax rate results in a lot of high paying jobs it is more likely to result in a loss of tax revenues than a gain.

      “Perhaps the government should send a DVD of this programme to all tax payers if they really want them to understand where the money comes from and goes.”

      I doubt that someone on minimum wage will sympathise with someone who only has £100,000 left after taxes.

      • JimF
        Posted March 25, 2012 at 8:03 pm | Permalink

        The person on minimum wage will be earning from the person on £100’000. Sympathise with them or not, it doesn’t matter, their wages will come from the pocket of the higher earner.
        I really think you should hop onto a plane to Singapore and throw away your statist ideas.

  19. figurewizard
    Posted March 25, 2012 at 9:10 am | Permalink

    Neither pensioners’ personal allowances nor VAT free sales of hot pies played any part in causing the crisis we are in. The real problem is that either the government is blissfully unaware that it is cutting the enormous cost of the the public sector that is the one and only priority or for some reason is constrained to do so by its coalition with the Lib Dems. Unless this changes dramatically and soon the Conservative party will be facing an uphill struggle come the next election.

  20. Nick
    Posted March 25, 2012 at 9:23 am | Permalink

    Sometimes less is more. Grow the cake faster, and then the public sector slice can be larger whilst everyone else is still better off. The government’s own forecast shows total income tax falling in 2011-12 compared to 2010-11, thanks to the large fall in top earnings and the top tax take. It then shows income tax rising to be just 1% higher in cash terms in 2012-13 than in 2010-11. The government needs to ask itself why Income Tax is in such a poor way with these higher rates.


    I’m sorry but this just isn’t true.

    The problem is that you, along with other politicians have, like any ostrich, stuck your head in the sand. [I was going to suggest somewhere else]

    The reason its not true, is that you can’t make that claim without considering the debts you’ve run up.

    You’ve run up 7,000 bn, when you include the off balance sheet debts such as pensions.

    Last year, the borrowing grew by 150 bn (the deficit). On top is the increase in the size of the off balance sheet debts. 6,000 bn at inflation, since these debts are inflation linked. Another 350 bn. Total 500 bn.

    Compare this against taxation of 550 bn.

    Now for the growth. You’re not getting growth of 500 bn a year to keep the debt at the same proportion of government income, (or gdp if you think the government owns everthing). You’re getting 2% at most. 1,400 bn * 2% is about 30 bn extra on GDP each year.

    So 30 bn compared to 500 bn? It’s going backwards. It’s tipped.

    Growth doesn’t solve it because its gone too far.

    Growth bought with debt in particular doesn’t solve it too. It just makes the mess bigger.

  21. Bazman
    Posted March 25, 2012 at 10:01 am | Permalink

    Us millionaires are all in it together. A reduction in the 50p tax rate with a crackdown on tax avoidance is evidence of real Tory thinking anyone who believes this will somehow create any more jobs is living in a dreamworld. Tax evasion is rife and bluffs should be called. We will see how smart they are when the bailiffs come. This will be ‘simplification’ of taxation of which as a percentage of income and and burden is paid by the vast majority of Britains population struggling to live a normal life whilst listening to Tories tell them that having a pet hamster is luxury and they need to tighten their belts more.
    Here’s an idea to help the economy. If you have lowered your living costs by for example paying off your debts, reducing utility bills by effective insulation and heating system, driving a low cost car etc. Then maybe these cost savings could be passed onto your employer by asking for a pay cut. Ram it.

    • Richard
      Posted March 25, 2012 at 4:04 pm | Permalink

      Ever since I left school Ive been self employed, you should try it Bazman, its very liberating, whatever you manage to earn is yours, you stand and fall by your own efforts and decisions, you answer to no boss, no one orders you to do anything.
      I get the feeling that working for someone isnt something you enjoy.

      • Bazman
        Posted March 25, 2012 at 7:05 pm | Permalink

        Good point. Only if the benefits of the risk are evenly distributed. Ram it.

        • Richard
          Posted March 25, 2012 at 9:07 pm | Permalink

          I dont appreciate the comment which you seem to add regularly at the end of many of your posts
          Please try to keep this site pleasant. I know what it means and it is unnecessary

          • Bazman
            Posted March 26, 2012 at 5:31 pm | Permalink

            You are not the editor of this site Richard so if you don’t like the cut of my my jib you can ram it.

  22. colliemum
    Posted March 25, 2012 at 10:03 am | Permalink

    It is actually very simple, so simple that the mighty brains in the Treasury and the even mightier brains in our MSM and in our political parties are unable to understand it.

    More taxation equals money taken out of people’s wallets. It means they have less to spend.
    And that means economic growth will at best remain static, if not contract. It is consumer spending which is needed, which will lead to new investments in industry and businesses.
    A growing economy leads to more revenue.

    Why is that so hard to understand?

    Btw – I wish the mighty brains (see above) would stop looking at how the ‘rich’ will react to over-taxation. This affects all of us. After all, those on low incomes are not exempt from paying VAT, are they?

    • uanime5
      Posted March 25, 2012 at 4:57 pm | Permalink

      Here’s something most people on this board fail to realise; people’s spending isn’t directly proportional to how much money they have. Once a family has everything they need and most of what they want any increase in spending will be marginal even if they have more money.

      So while the poor may increase their spending if they have more money the wealthy are unlikely to. Thus tax cuts for the poor will be more beneficial to the economy than tax cuts for the wealthy.

      • JimF
        Posted March 25, 2012 at 8:08 pm | Permalink

        So just what do the wealthy do with their money?
        Hide it under a mattress? It’ll be eaten away by Tory QE.
        Invest it? Well that benefits the economy, doesn’t it?
        Buy an enormous house? Stamp duty 7% and Council tax.

        Please tell me what do with it that is so deleterious to a thriving socialist economy? Of course, they invest it elsewhere, and not into your socialist paradise.

      • Bazman
        Posted March 26, 2012 at 7:17 pm | Permalink

        Thats true even for a person like myself. I spend only what I need and a bit more. A pub meal with my 5 year old daughter and a few beer with the live music in the same pub at night is hardly Rock & Roll. The rest of my money just gets saved with the occasional big spend in local shops on furniture and replacement TV’s computers. The rich must have the same ‘problem’ on a larger scale. “You live a simple life Bazman.” As the local doctor once said.

  23. MajorFrustration
    Posted March 25, 2012 at 10:34 am | Permalink

    Tax and representation go hand in hand – well usually. We do seem to be over taxed yet I struggle to see that our politicans actually represent the views of those taxed.

    • Dan H.
      Posted March 26, 2012 at 5:37 pm | Permalink

      Of all the economic theories in the world, the Laffer Curve is probably the one which has the most empirical evidence in support of it; in Britain alone total tax take rose dramatically when the 98% top rate of tax was reduced. Tax should be thought of as the means by which a government raises money so that it can do things it needs to do (needs to, not wants to). Tax should not be thought of as a tool of social justice as so many of the Left seem to think it is.

      When considering income tax, the one thing that needs to be remembered above all is who actually pays the most income tax. As things stood last year, the 10% of earners with the highest salaries paid 55% of the total income tax take; more than half the total came from who the Left castigate as “Rich bastards” and worse. My take on these people is very different; I view them as benevolent philanthropists who are generously paying lots of income tax so the likes of me don’t have to. Instituting such an idiotic measure as the 50% tax is utter lunacy which could be implemented only by a certifiably insane idiot (hello, Gordon!).

      If you try to soak the very rich of a huge proportion of their money, they behave very similarly to anyone else when you try to steal much of their income: they try to protect it. Rich people are rich enough to be highly mobile and rich enough to pay intelligent tax accountants; if you try to thieve large parts of their wealth, they either take the money and job and depart for climes more clement, or they legally avoid the tax. This is not speculation, this is actual observed fact which has happened in the past for these reasons.

      So, the best possible policies to adopt are twofold: firstly, adapt to the Laffer Curve and try to keep below the optimal rate of taxation so that if times turn nasty, you can increase tax to cope.

      Secondly, avoid permitting people who do not contribute to the system the opportunity to decide how things are done; this means limiting votes to people who pay tax and disenfranchising parasites. Strong medicine and it’ll kill the Socialists once and for all, but so be it.

  24. Bernard Otway
    Posted March 25, 2012 at 10:53 am | Permalink

    I predict on a daily basis that over the next 15 years at least 5 million Britons will Emmigrate
    because of this and many other reasons,in my daily routine I advise [actually EXHORT]
    young people under the age of 45 to go to Canada/Australia/New Zealand,I actually carry around with me a current colour photocopy image of my first house ,which was purchased by me in 1969 in Brisbane Australia at the Ripe old age of 24,3 bedrooms, 2 [YES 2] bathrooms
    Main en Suite ,huge lounge diner,study,rumpus room ,DETATCHED.And I ask them WHEN
    they expect to own anything like it here and at WHAT age,the majority reply NEVER.I get regular emails from a young lady I met in a bank where she worked in 2008 who is actually NOW living the DREAM I painted ,in SYDNEY three weeks ago I implored her to stop effusively thanking me for persuading her to emmigrate with her young baby and husband [NOW a second child has arrived] I told her my pleasure is in the fact she is happy and her family are too.
    By the way the 5 million that will leave are those that we LEAST would want to lose,because of the PROPER STRICT immigration rules of the 3 countries mentioned,and IF the pro immigration lobby try to say that this loss of 5 million is therefore offset by the 5 million that they would WANT to come in to replace them ,and that the NETT figure is NEUTRAL ie minus 5 plus 5 is ZERO,on the profit/ loss account side of people it actually
    represents minus on the one side and plus on the other ,that is why migration watch
    forecast that immigrants will be in the MAJORITY by 2050 as a percentage of the population as a whole. (Words left out-ed) A NO BRAINER. I actually am taking lifelogic’s route out at the end of 2012 myself and refollowing what I did in 1980 when I left before and only regrettably returned in 2008. My best friend of 66 is actually leaving to live in the Czech republic where his son now lives for the same reasons,he has NEVER left before,ENOUGH SAID.

  25. Susan
    Posted March 25, 2012 at 11:23 am | Permalink

    Mr. Redwood may I have my post to Bazman on ‘ Taxing Times’ moderated please as I would not like him to feel I did not bother to answer him.

  26. backofanenvelope
    Posted March 25, 2012 at 11:35 am | Permalink

    The chief characteristics of this Prime Minister are incessant meddling and a general indifference to what the electorate thinks. He is just like the three prime ministers before him.

    As I have said before, he doesn’t care what I think and I don’t care what he says.

    Roll on the general election.

    • forthurst
      Posted March 25, 2012 at 1:55 pm | Permalink

      Well Cameron was going to effect a shift in the economy from financial spivery, eloquently described by Greg Smith, to making things. For that he would be employing maths and physics graduates at the market to teach in his newly created grammar schools, create scholarships in engineering and science to our best universities, displacing the foreigners who we are curently teaching there, so that the brightest and the best were given the opportunity and tempted into making things rather than into creating new forms of ingenious financial predation.

      However, Cameron decided to go for gay marriage which I think we can all agree is nearly as good.

  27. Christian Wright
    Posted March 25, 2012 at 11:37 am | Permalink

    know thine enemy.

    However, it may be that I was too cruel. You are an able man and there is a way in which you might yet well serve your cause, your party, and your country.

    Support the struggle for Scottish self determination. The end of the Union 1707 will mean the end of the UK 1800 r 1927 and the principals reverting to there original states. The Kingdom of Scotland, the Kingdom of England (incorporating Wales), and the Province of Northern Ireland.

    If the dissolution of the Union is achieved, the way is open for the establishment of an English Parliament. Use the inevitable kerfuffle over the regularization and renegotiation of terms of EU membership of successor states, to ease England out of the EU without need of a referendum.

    It should not take much to pee-off our European partners to the point of red-faced, artery-clogging exasperation. Back home, the people of England are either already firmly eurosceptic or ripe for persuasion, and injecting a little jingoism into the mix should ensure their full support.

    The freeing Scotland is the best chance you have to “free” England and determine her destiny for the foreseeable future. Until the Left realigns, you will have the luxury of a Tory plurality – enough to ensure a parliamentary majority for your party, perhaps for a generation.

    A unique opportunity presents itself with this coming referendum on Scottish independence, and you may be ideally placed to take advantage of it. There is no logical reason why English nationalists and Scottish Nationalists cannot hold their collective noses, and unite in common cause to see an end to this moribund union that stands in the way of a common aspiration for right to choose our own destinies.

    One should know one’s enemy, but in truth, the enemy is this ramshackle unequal, 3 centuries old, settlement that binds us. That applies as much to the English Nationalists, and indirectly to the pure eurosceptics, as it does to the Scottish Nationalists. Consider then another Proverb:

    The enemy of my enemy is my friend.

    The cause of Scottish independence could greatly use a friendly English voice in the House – who better than you? The risks are not great and the rewards could be manifold.

  28. Steven Whitfield
    Posted March 25, 2012 at 11:50 am | Permalink

    An alien being landing in Britain today could be forgiven for believing that the current economic problems are caused by ‘the rich’ not paying enough tax. That is what the politicians want us to believe.
    The truth is they have allowed state provision of medical and other services to become so grossly inefficient that it is simply unaffordable. Welfare is an expensive mess that has caused untold suffering. But they cannot face up to the consequences of the wrong headed decisions they have been making for the last 40.

    It is deeply troubling that we appear to be hostile to those that are succesful and create jobs and reward the selfish and lazy individual. How long can a society go on like this before it collapses.

    The overall agenda of all the main parties can be summed up by one word -levelling.
    The PC agenda they all follow dictates that any individual with wealth must have recieved it by oppressing the poor or other unfair advantages. Incentives to do better and be independent of the state are being eroded.

    The rot starts at the PM, if you want the best for your kids your called a member of ‘the sharp elbowed middle classes’ . What you should do is hold your kid back so that a less ‘privelidged ‘ child can have your childs place therefore ensure ‘equality of opportunity’.
    So, no hard work doesn’t matter, ‘the rich’ are just lucky and get all the right breaks’.
    That ofcourse is the meat and vegetables of Labour party policy- but when it is adopted by the Conservative party ?.But what are the back benchers going to do about the destruction of the party from the top down ?

  29. Demetrius
    Posted March 25, 2012 at 11:59 am | Permalink

    Tax the bloggers, tax political figures who blog at a penal rate, send other political bloggers to the gallows and confiscate all their property deport commentators on blogs to Tuscany on double pensions. Can’t say fairer than that.

    • forthurst
      Posted March 25, 2012 at 2:03 pm | Permalink

      After a carbon tax, a word tax, why not? Don’t tell lifelogic.

  30. Electro-Kevin
    Posted March 25, 2012 at 12:06 pm | Permalink

    Yes. Britain is overtaxed.

    The UK economy is constructed on a hybrid of welfarism and welfare-dependant capitalism. Builders/hairdressers/restauranteurs working for teachers, policemen, NHS doctors … The books seemingly balanced because housing stock holds so much ‘wealth’ upon which to draw.

    The US has had its shake-out of house price corrections and is making progress. Our housing needs to take a hit too. Otherwise the only way to prop it all up is with a lot of tax.

  31. Disaffected
    Posted March 25, 2012 at 12:10 pm | Permalink

    The socialist Coalition does not need to tax more it needs to spend less. They have conned most people to believe that spending cuts are making a striking difference with their strap lines we are all in it together. The budget tells a different story and so do their actions to date. Every key policy area has got worse under the Tory led Coalition.

    Today we learn that the Tory party are back into the full swing of sleaze. It did not take long for power to have a corrupting influence. Ironically it was an area Cameron was aware of but has done nothing to stop, perhaps a forerunner of his first cast iron U turn to clean up politics. At the moment no one in the party wants to confirm how many people bought dinner in the private flat of the Cameron’s. A lot spin and deflective comments, but no confirmation that it has not taken place.

    Hoon was caught in a similar sting, so it was not as if this was not known to be going on. Pervasive corruption continues at every corner of Westminster and someone needs the moral fortitude to bring radical change. No more second jobs (including speech circuit) where the second job takes more of their time than being an MP, lobbying, expenses, employing relatives to boost their income, second homes and most importantly independent police investigations before useless parliamentary ones that serve no purpose.

    Perhaps the Bullingdon boys were too excited about the jolly to the US, to support a socialist president who dislikes the UK, and fly in the president’s plane to worry about the budget, shafting pensioners beyond QE and low interest rates.

    These Bullingdon boys will not have the courage to implement spending cuts anytime soon. More borrowing, spending and taxation than Gordon Brown, welfare lifers get a 5.2% pay increase next week, mass immigration continues, EU imposing more laws and demands despite their system wrecking our economy (personal greed and self -interest pervades). Such a good idea to have Mr Heseltine to write a report for them, someone who has restated that he wants the UK in the Euro despite current events.

    • David Hearnshaw
      Posted March 25, 2012 at 3:09 pm | Permalink

      Spot on, disaffected!
      Well said

    • JimF
      Posted March 25, 2012 at 8:12 pm | Permalink

      It does however surprise me that they landed a higher stamp duty on London properties. The chaps won’t like that one, after all the effort put into QE to ramp up those prices.

  32. Brigham
    Posted March 25, 2012 at 12:10 pm | Permalink

    I am a pensioner, and I am angry about the loss of the money that would have been coming my way. I am not, however, angry with the Government. It is the previous administration that I blame, with their profligate policies, and their stupidity, and inability to manage the country’s finances, that have made the cuts necessary.

    • Disaffected
      Posted March 25, 2012 at 7:35 pm | Permalink

      Perhaps you have believed what you were told rather than read the facts. However, what has the Tory party actually achieved in two years against the pledges and cast iron guarantees?

      Lib Dems socialists bash business, want more and more tax, want more immigration, want the UK to be part of a European state. Lib Dems wants to change the culture of Britain- gay marriage, social engineering for the best university places. Wreck the defence of this country, do not want trident.

      The Lib Dems came a poor third a t the last election because no one wanted their policies. They lost the vote on AV and got bashed at by-elections.

      Which party has been more successful? Wake up Tory back benchers you are being sold down the river.

  33. Susan
    Posted March 25, 2012 at 12:35 pm | Permalink

    I think the problem goes back to just before and during the Election, when no party was brave enough to explain to the public just how difficult the coming years of austerity would be. The Conservatives are particularly bad at explaining why they take certain actions in Government. Indeed I still know people who believe the Conservatives are merely attempting to make cuts out of idealogy and not necessity. I did not know until today for instance, that it was a Lib/Dems policy to cut the age related allowance for pensioners not Conservative. The reason most people dislike this so called Granny tax is not the amount of money involved, but because it looks mean spirited, attempts to divide the generations and gives the impression that if you work hard all your life and save a little, we will punish you for your efforts.

    So until the public is made to realise just how dire the UK financial situation is and the Conservatives assert themselves better in this Coalition, the public will be resistant to change, attempt to hold onto their individual slice of the economic pie and no real cuts will ever happen. Therefore tax will continue to drift upwards until saturation point is reached and the economy will continue to decline. I am not sure that this time, the UK will be able to pull back from this dire economic situation, as they have in the past, because of such a competitive Global economy. There seems to be no political party at the moment that is capable or brave enough of pulling the economy back into balance with all the pain that would be involved for the public, even if we could.

    My difficulty at this present time is seeing a way forward for the UK with the present Coalition in place. Maybe we need a new radical political party to come along to shake things up a bit.

    • Bob
      Posted March 26, 2012 at 8:48 am | Permalink

      “Maybe we need a new radical political party to come along to shake things up a bit.”

      Yes, I agree with that.

    • alan jutson
      Posted March 26, 2012 at 10:22 am | Permalink


      I agree with much of what you say.

  34. Robert Taggart
    Posted March 25, 2012 at 12:40 pm | Permalink

    Johnny – to the article – agreed.

    For starters – how about abolishing National Insurance. To pay for it – a new ten pence and thirty pence rate for income tax ? Also abolish the 45 pence rate !

    Question. Your chances of becoming Chancellor of the Exchequer – does that require a change of the party leadership ? David Davies perhaps ??

  35. REPay
    Posted March 25, 2012 at 1:09 pm | Permalink

    I know three americans who will be leaving for home. I am betting that the Pru and Barclays will relocate their HQ’s out of the UK. This will be greeted as a disaster by the very people who bay for blood of bankers. I live in New York and I will be selling my London property as I don’t want to risk a wealth tax which will arrive as soon as Milliband or Milliband/Clegg are in government. I expect if I post this information on the New Statesman there will be rejoicing as the British left dislikes the “rich” more than it cares about the poor.

    PS If you take into account the pension pots for ministers all the shadow cabinet are tax payer funded millionaires! They doubtless have not done the maths to work this out.

  36. AJAX
    Posted March 25, 2012 at 1:10 pm | Permalink

    How does the HM Treasury repair its stricken vaults caused by bailing out the banking collapse & service its ever growing Everest of debt … & reduce taxes the same time?

    I’m all for the Liberal philosophical idea that the best place for the people’s money is in their own pockets, but at this time those talking about tax cutting & “going for growth” aren’t aware of the systemic financial crisis that’s underway around the world now.

  37. Trevor Butler
    Posted March 25, 2012 at 1:13 pm | Permalink

    The perception of taxation levels is governed by perceived value to the tax payer.
    We in the UK are being crushed under a tax regime that is destroying the ability of the average working person to ever create wealth.
    I am disgusted that over half of my working life is spent generating income via direct and indirect taxation for a governing system that cannot spend prudently or wisely. A system that expects me to just keep on paying for harebrained schemes thought up by out of touch people who have no concept of what life is actually like for the average person in the street.
    My children are emigrating as soon as they graduate having realized that working in the UK, for the vast majority of people, is to spend one’s life being ripped off by the government.
    A sad state of affairs especially when one considers other countries – My wife and I worked in Taiwan where we paid 2% tax and had access to a National Health system that was vastly superior to the NHS.
    Something is wrong and I do not see anyone in government prepared to be bold enough to fix it.

  38. David John Wilson
    Posted March 25, 2012 at 1:25 pm | Permalink

    The government needs to look very closely at anything that is taxed more than once. In most cases reducing this to a single tax would be a lot more efficient for everyone and the economy if the same revenue were raised by chosing an appropriate level for one of these taxes.

    Take for example fuel. If VAT were removed from fuel and an appropriate level fuel duty imposed then there would be less need for any adjustment to mitigate crude price changes. It would also help to reduce the higher prices paid in more remote locations. If VED was got rid of at the same time we would lose what has become another complex tax and reduce the competitive advantage enjoyed by foriegn delivery vehicles. (Insurance companies can issue a disc for the vehicle and continue to report to Swansea).
    Why do we have television licences, with expensive checking that every household has one. Just add the amount collected to the council tax and reduce government grants to councils.
    Why is a mansion tax proposed when introducing higher bands of council tax could produce a similar effect?
    The government claims that it wants to simplify taxation and yet at every move introduces another complication. We need a simple rule that no new tax or complexity to an existing tax should be introduced without removing at least one old one.

    • backofanenvelope
      Posted March 25, 2012 at 5:15 pm | Permalink

      We cannot remove VAT from fuel. Not while we are in the EU anyway.

      The BBC output is almost entirely digital. Just switch to a Sky-style subscription system.

      • Boudicca
        Posted March 25, 2012 at 6:45 pm | Permalink

        We cannot remove VAT from fuel all the time we remain in the EU (just one more reason to leave – as if it were needed). But it can be reduced to the minimum 5%.

        Domestic fuel VAT is at 5%. Osborne should have reduced Fuel Duty to 5% as well.

        The level of tax on petrol is outrageous. It is sheer greed from a Government which promised that the war against the motorist was over.

    • Bob
      Posted March 25, 2012 at 9:31 pm | Permalink

      The cost of collecting tv licence fees is £125m.

  39. Rebecca Hanson
    Posted March 25, 2012 at 1:39 pm | Permalink

    “My remedy is to set tax rates that maximise the revenue from that particular tax.”

    In seeking to apply this remedy it is important to understand the part that time plays in the revenue generated from a tax. It can take people a while to adjust their behaviour in response to a new tax or a tax change so it’s important to examine whether initial benefits of changes will be sustained or not.

  40. Barbara Stevens
    Posted March 25, 2012 at 1:46 pm | Permalink

    You are so right, we are saturated with tax, yet, your govenment and those before still insist on giving our money away on foreign aid. Paying the silly demands from the EU, when it needs some politicians to stand up and say NO we refuse to pay more. The list of foreign countries that bleed this country is unforgiveable and should be stopped right away. It is our money after all not any political parties to squander like they do. When people see 20 billion in foriegn aid being given year on year while they suffer more taxes, cuts of their living standards to support these policies, you can understand their anger. Many here dependant upon benefits should be able to have extra more than people in say Pakistan or India, or China, although the latter two now have a closing date I believe.
    We are funding the IMF for currancies which it was not intended, fighting wars, which the people don’t want, while we don’t have aircraft carriers for our own defence; what does that tell you?
    I think politicians of all persuasions should begin to rethink what they do, they won’t of course for they think they know best, well according to their history so far they don’t. We are not a poor country, but what money we raise should be spent here and toward our own debts, not given away and then tell the people you have to suffer much more. It won’t wash. If governments don’t heed what people say then they will be removed eventually by the people they hurt, and this government for all it’s attempts at getting more cash appear to be failing themselves and us. Instead of pontificating on the world stage they should concentrate here at home where it matters, or they will suffer the consequences. I want all money stopped leaving this country and it spent here, its our money and its time any government were told so in no uncertain terms, to get the message.

  41. Christopher Ekstrom
    Posted March 25, 2012 at 2:23 pm | Permalink

    Reading this post is just so very discouraging; how can the English people have come to this pathetic juncture? The UK is a poisoned chalice that can only drag us further down. In the end it was not Big Brother but instead millions of grasping & “entitled subjects” that have destroyed this society.

  42. Cathleen Mainds
    Posted March 25, 2012 at 2:25 pm | Permalink

    I think we need to remind people of basic human psychology more often when discussing the impact of tax. Everyone, including advocates of 50% (and more) tax rates, understands the deterrant effect on being willing to work if the pay leaves you either worse off than on benefits or only marginally better off. We all understand that you need to become significantly better off in work than out, if you’re to be willing to work.
    We need to explain that that basic human reaction also works when faced with losing to tax 50p of every extra 100p you earn. It just doesn’t seem worth the extra effort. So you go abroad or simply ease off, thus not generating any more taxable wealth, or you try to find complex ways of keeping your “fair share” of the results of your work and preventing “the state/other people” from appropriating an unfair share. The effect is that less wealth is generated and so less work is generated for others. Just ask people who advocate high taxes on “the rich”, would you bother working if you were only allowed to keep £5 when you’d earned £10? would you think it fair?
    Another aspect that needs to be tackled head on is the moral aspect of repeatedly demanding higher income tax, wealth taxes, higher property taxes, etc. It manifests a jealousy and covetousness and resentment which festers like a putrid sickness in society. A society in which such values are endorsed and encouraged, where people who have achieved more as portrayed as “not one of us” and deserving of being dragged down (to join the rest), becomes one where lack of success is seen as the acceptable norm, where striving to do better becomes “getting above one’s neighbours (the majority); and these attitudes doom the majority and indeed to whole society to failure and impoverishment.
    One sometimes feels that in the UK over recent decades the only acceptable success is on the football pitch and the pop music world. We need to learn to welcome success and self-betterment in all legitimate activities.
    We also need to recognise that in a free and fair society, it is essential that people keep a fair share of the wealth they generate as well as providing a safety-net for the sick and those less able to cope with the cut and thrust of society.

    • uanime5
      Posted March 25, 2012 at 5:12 pm | Permalink

      “So you go abroad or simply ease off, thus not generating any more taxable wealth”

      By leaving or easing off you create work that someone else can do. This will reduce unemployment and generate more taxable wealth.

      “you try to find complex ways of keeping your “fair share” of the results of your work and preventing “the state/other people” from appropriating an unfair share.”

      Something the law can clamp down on if the Government makes this illegal.

      “Just ask people who advocate high taxes on “the rich”, would you bother working if you were only allowed to keep £5 when you’d earned £10?”

      Given how much more money I’d be making if I was earning a salary of £150,000 yes I would bother working.

      “where people who have achieved more as portrayed as “not one of us” and deserving of being dragged down (to join the rest)”

      Given that they often achieve more by paying their staff as little as possible and by overworking them they deserve to be vilified. Just because you became rich doesn’t mean the way you got rich was the right way. It’s s true sickness of society when the only measure of success is how wealthy you are.

      “One sometimes feels that in the UK over recent decades the only acceptable success is on the football pitch and the pop music world.”

      To be successful in these industries you need talent. In other industries you just need connections.

      • Richard
        Posted March 26, 2012 at 7:14 am | Permalink

        In your last sentence surely you meant to say “you need training, skills and qualifications”
        You wouldnt get far in engineering or medicine or teaching or construction on just connections!

        • Bazman
          Posted March 26, 2012 at 7:19 pm | Permalink

          You would if you went to Eaton.

    • Bob
      Posted March 26, 2012 at 9:00 am | Permalink

      “To be successful in these industries you need talent. In other industries you just need connections.”

      Is this an attempt at excusing lack of success on the writers part?

  43. John C
    Posted March 25, 2012 at 2:38 pm | Permalink

    My favourite quote about taxation:

    “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing.” Jean-Baptiste Colbert (1619-1683)

    Just about sums up your argument perfectly and also shows that this issue has been around almost as long as taxation itself.

  44. waramess
    Posted March 25, 2012 at 2:40 pm | Permalink

    It is not the fact that new taxes are being sought it is the movement of resources from the private sector to the public sector. You are an advocate of reducing tax rates to increase the revenue but this is the problem.

    Failed taxation measures that accidentally reduce revenue are far preferable to successful measures that increase the revenue to the Treasury.

    Was not the promise to cut the size ( waste?) of government rather than increase taxation, or has that proved to be too difficult for these dumbheads. No great suprise there then, as many bloggers were predicting this outcome way before the chum(p)s took up office

  45. Tedgo
    Posted March 25, 2012 at 3:04 pm | Permalink

    As a pensioner I do not see why there should be different personal allowances for different age groups, only the allowance should be much more generous for all to cover the basics of living.

    I would also like to see income tax and NI combined at around 32%. Here again that rate could be extended to all age groups to spread the tax burden further including better off pensioners.

    But as everyone else says, the government should spend a lot lot less and cut out the waste.

  46. nonny mouse
    Posted March 25, 2012 at 4:17 pm | Permalink

    Assuming we want to limit government spending as a % of GDP to closer to 40% (down from the peak of >50%) AND we want to remove the budget deficit then that implies total taxation as 40% of GDP.

    I believe we currently tax generated closer to 35% of GDP from all tax revenues. That means the tax take actually needs to go up by a few %.

    Now that doesn’t mean higher rates or more taxes – we can reach that level by tackling the tax avoidance problem. The first place to start is to force personal service companies to pay full tax if the work of one individual is responsible for >50% of their revenue.

    • Rue de la Loi
      Posted March 25, 2012 at 5:24 pm | Permalink

      You wuld presumably accept the Guardian as an impeccable source of data on this:
      shows that the current tax take is well above 35%, closer to 38%.

      You are right that tax avoidance is a major problem, but the biggest avoidance is by those who draw more from the State than they put in; there are millions who avoid paying any net tax and the present Government has no clue and no plan how to deal with this. With the top 1% of taxpayers paying 28% of income tax receipts, how much more do you think can be squeezeed out of those who do pay significant amounts of tax? Anyway, such people are very small in number and even 99% tax on them will not eliminate Brown’s deficit. As to the much larger number of taxpayers in the £40-60,000 range, not only are they paying significant amounts of income tax, but they then pay more taxes on top of expenditure out of taxed income, fuel being the most striking example. if it costs £100 to fill the tank, over two thirds of which is swallowed up by taxes, those who are far from rich will need to earn £140 to buy less than £40 worth of fuel. Do you really think people are willing to accept this when so much public expenditure has no widespread support from the electorate? Subsidies to David Cameron’s father in law for wind farms, 24 hour police protection for hate preachers that cannot be deported, £8bn to the IMF to prop up a currency union the UK has taken no part in etc.

      Expect the black economy to be the only growth sector for quite some time yet.

  47. Peter M
    Posted March 25, 2012 at 4:51 pm | Permalink

    “Some are leaving the country altogether, some are moving savings and assets abroad, some are working less, some are deferring income, some are finding ways round the tax system within the UK.”

    And some of us are planning to stop voting Tory and vote Ukip instead, who are the only party with a sensible policy on tax, and who are unafraid to state it clearly

    • Boudicca
      Posted March 25, 2012 at 6:48 pm | Permalink

      Some of us predicted what Cameron would be like and made the switch some time ago.

      UKIP is growing very quickly: 7% or thereabouts overall, but we were regularly polling 13% among the 60+ group which is most likely to vote. I expect that will go up now.

      Reply: Not in the polls I see, though European elections have produced much higher figures for UKIP

      • Lindsay McDougall
        Posted March 26, 2012 at 6:02 pm | Permalink

        Let me pick up on this. I am staying with the Conservatives but I am thinking of voting UKIP in the 2014 European elections in order to “nudge” Mr Cameron in the right direction. However, if he doesn’t want to be nudged, that’s up to him. Usually, I vote Conservative but I voted to evict Edward Heath in February 1974 and John Major in 1997. And I don’t suffer any pangs of conscience for having done so.

  48. jim nicholas
    Posted March 25, 2012 at 5:03 pm | Permalink

    perhaps a little exam in order to vote might be in order!! or perhaps a vote for those who pay into the system? a hornets nest now insues!!!!!!!!!!!!!!!!!!!!

  49. oldtimer
    Posted March 25, 2012 at 6:01 pm | Permalink

    I agree with your post that the UK is overtaxed. Unfortunately I see no chance of this situation changing with this coalition in power, or with the present leadership of the Conservative party. If they were really serious about the size of the national debt (as their lip service to it implied before the last general election) then they would not continue to spend such huge sums of money on vanity projects, like foreign aid, where it was not justified.

    The level of debate is also depressing – as some comments here mirror the national obsession of getting someone else to pay. Usually this is the “rich”. But now even pensioners are on the radar as a target for the taxman. Quite why this is so, when many of them will have lived through earlier 60% tax regimes, have seen their savings plundered by Brown`s pensions tax and more recently seen their savings devastated by QE all to fund one profligate government after another, is hard to understand. Pensioners are all too aware of their predicament, are vocal, provide a significant and informed element of comment on this and other political blogs, and, politicians should note, are more likely to vote at elections than any other age group.

    On its present course and with its present policies the UK will continue to decline, certainly relatively to other countries and probably in absolute terms as well. The standard of living will drop. Social unrest will grow. More and more talented people with the ability to emigrate will do so. The Chancellor may have signalled a tax regime that will attract foreign investors to locate subsidiaries here; but where are the incentives for home grown earners to prosper and do well? All they can look forward to is abuse and absurd levels of taxation if they succeed.

  50. Derek Emery
    Posted March 25, 2012 at 6:05 pm | Permalink

    This site calculates total taxation as 0ver 80%
    I’ve seen other sites that calculate total tax as around 70% – I dare say it depends on how you calculate it.

    High taxation marginalises private sector jobs and production in the UK. Unlike government which can just take as much as it wants private businesses have to make a profit or die through bankruptcy. If the UK only had a public sector there would be no means of wealth generation creating a trade-able surplus that could pay for essential imports such as fuel energy and food as the public sector can never generate a trade-able surplus.

    Company profits are usually less than 10% so are easy eliminated by the extra costs from tax rises. Since politicians and the left generally are clueless about wealth creation this will never understand this as balance sheets in the public sector are virtually meaningless as you can just take more money as required.

    In any event the UK is permanently chained to the world’s highest unemployment and guaranteed low GDP centre – the EU. The UK is cannot anywhere except with this ship. Inevitably the rest of the world will overtake us, and Brazil overtaking us is just the first of many. The EU will become an economic backwater by the end of the decade and there is nothing anyone can do about it.

    • Christopher Ekstrom
      Posted March 26, 2012 at 4:37 am | Permalink

      If there is a UK…If there is an EU. Just because or horizon stool seems to include these ludicrous abstractions does not preclude the rapid extinction political nature demands.

  51. sm
    Posted March 25, 2012 at 6:17 pm | Permalink

    So paying for private lending losses and bad takeovers are causing taxes to go up, who would have thought it?

    QE, ZIRP and inflation are all ultimately a tax, just not openly called as such and not really voted on.

    Where should we look to for examples , Iceland? Switzerland?…. to close to real democracy. Get democracy back before we worry about tax.

    The BOE thinks banks are undercapitalized, no xxxx sherlock, but with QE and ZIRP its hiding covering up the problems rather than dealing with them.

    Why not QE to fund reductions and simplify tax on labour, bring in a subsistence level citizen income, (then look at wealth and landtax) but constrain and ultimately remove banks ability to create money.Then restructure banks and let interest rates rise.

    Longer term bring in some constitutional law to spend only what we bring in.( force majeur aside)

    • sm
      Posted March 26, 2012 at 11:59 am | Permalink

      ….and even if we managed to stimulate and get a positive feedback, we would be swamped by further inward immigration from the other EU basket cases. Its so obvious we are chained to the EU in ways which effect policy outcomes out of sight under the water.

      Any chance of getting benefit stats by nationality of origin including EU/UK citizens.

      • sjb
        Posted March 27, 2012 at 12:47 pm | Permalink

        […] as of February 2011 there were 371,000 people claiming DWP working age benefits who were non-UK nationals when they first registered for a National Insurance Number, of these 258,000 were non-EEA nationals.

        Many of the 258,000 non-EEA nationals at the time of National Insurance Number registration are now British Citizens […]

  52. Alan Radford
    Posted March 25, 2012 at 6:19 pm | Permalink

    Good article, John. Somehow the LibDem mood music is all pervasive – the entire debate is centred around which individuals from which to steal. Until the country turns away from this and deliberately chooses a smaller state (and wealthier citizens) I see no way forward.

  53. MS
    Posted March 25, 2012 at 6:20 pm | Permalink

    If Mr Redwoods views and comments are as accurate and evidence based as his comments on the NHS and healthcare, then perhaps you should all be more cautious in agreeing with him – as I only have expereince in this area, it always damages confidence to read someone who is more articulate and plausible than he is informed .

    reply: Where do you allege I am inaccurate, as opposed to having a different view from yours?

    • MS
      Posted March 25, 2012 at 7:22 pm | Permalink

      My point is not that I have a different view, but that when I have read your material on NHS /Healthcare etc I know enough about this area to know you are recycling text from poor briefings , using borrowed opinion , and do not understand the evidence/administration/governance etc of healthcare reform and delivery . This weakens confidence in your other views – we have to assume they are supported by real evidence – perhaps some links for futher supporting evidence would be good for ‘grow the cake faster’ would help your readership? Very well written though

      reply: You need to give examples with evidence.

      • lifelogic
        Posted March 25, 2012 at 8:55 pm | Permalink

        MS – What specifically do you disagree with on the NHS? You do not say in either posting.

  54. Deborah Thomas
    Posted March 25, 2012 at 6:20 pm | Permalink

    It is articles like this that show why it is so important to have you in Parliament – one of the few proper Conservatives we have left in the public eye.

  55. Boudicca
    Posted March 25, 2012 at 6:30 pm | Permalink

    I am overtaxed and as a result, I am on spending strike.

    I have no debt; I do have some savings. But I am deliberately spending as little as possible. I will not pay 20% VAT on top of my taxed income unless I REALLY need the item. I have cut my electricity bill to the minimum because I will not voluntarily fund the Govt’s ‘green energy’ scam. I am using the local Charity Shops; freecycle; swap and second-hand websites. I am restricting use of my car because I object to the Government’s sheer unadulterated greed in levying 78% VAT and fuel duty when a litre of unleaded has increased from £1.10 to £1.45 in the past 22 months.

    The Coalition should start to cut spending. That means getting rid of whole Quangos and Govt depts. Not pussy-footing around with a few savings here and there. Get rid of the Diversity, Outreach, nanny-state non-jobs. We don’t need 5-a-day advisers.

    In his Budget, Osborne slipped in that the UK Government’s net contribution to the EU rose by £1.8 billion more than expected.

    All the time Cameron prefers to tax us in order to fund the EU (which we don’t want to be in) and the 3rd world with OUR money, as far as possible I am on spending strike.

  56. Colin Bell
    Posted March 25, 2012 at 6:46 pm | Permalink

    Re the premise that the tax “take” in the UK is excessive.
    I am a 63 yrs old professional, and:
    (1) For decades I avoided wherever possible working overtime in the UK because I resented the amount deducted in tax and I’d rather do without than feed the maw of the State.
    (2) Over the last 13 years I have preferentially worked overseas, outside both the UK & EU, because I am unwilling to pay tax.
    (3) I have never voted, either in a local or general election, not because I’m uninterested or bored by politics, but because I refuse to taint myself by giving a vote to a self-serving, duplicitous political class (Left and Right) who have brought the UK to the state that it’s in.

    Rgrds., CB

    • BobE
      Posted March 26, 2012 at 12:06 am | Permalink

      Yes, I vote for UKIP now to try to frighten these fools. Did you see the look on his face when they called in thd granny tax?. The death of cuts. Granny tax, Student loans. Lib Dems are dead.

    • backofanenvelope
      Posted March 26, 2012 at 5:58 am | Permalink

      Just vote for one of the smaller parties. If enough of us do that, the apple cart will be overturned.

  57. Phil Richmond
    Posted March 25, 2012 at 6:48 pm | Permalink

    My remedy John is get rid of Cameron and replace him with David Davies and have you as the Chancellor.

    • lifelogic
      Posted March 25, 2012 at 8:59 pm | Permalink

      Sounds a good team big on civil liberties and sensible fiscal & economic management and a buffer against the EU socialist superstate.

    Posted March 25, 2012 at 6:55 pm | Permalink

    Surely it is LAUGHING CURVE??

  59. BigJohn
    Posted March 26, 2012 at 12:24 am | Permalink

    Spot on.

    Keep up the good work John, this country needs more MP’s like you, who can see beyond the next election.

    You have my vote every time.

  60. Marcus Junius Brutus
    Posted March 26, 2012 at 3:15 am | Permalink

    I saw all the different taxes accumulating under Gordon Brown and had enough. So I left.

    I increased my gross earnings by going abroad and I pay less tax. I would need a further 80% payrise from my current pay level to have the same take home pay in the UK after tax and national insurance.

    This is a hidden cost hindering UK employment. How does a company get good people to work in the UK when the cost is so high? Then of course there is the cost of complying with all the red tape required by all the quangoes. It all puts the UK in a very uncompetitive position.

    Somebody needs to be paying attention to the various elements that make up Porter’s diamon of national competitiveness.

    I am very disappointed that the current UK government has done next to nothing to undo this mess.

    Incidentally, since I live and work outside the EU, my taxes do not go to fund the bloated public sector or welfare state in the UK or to supporting the EU ongoing theft of democracy. Which I regard with satisfaction as my own contribution to creating pressure for some of the necessary change.

  61. pb
    Posted March 26, 2012 at 8:27 am | Permalink

    Taxation wouldn’t be so bad if the money was not wasted so flagrantly. I cannot imagine any private company being anywhere close to as inefficient as the state and surviving. My own family’s experience of work in the public sector is one of watching people asleep at their desks, “working at home” on sunny days and endless days off sick for “stress”.

    Tax rates are way too high now, I used to be a consultant, but took a much lower paid permanent position last year as a consequence of higher taxation – why give 50% of my money to the government to waste on people who are happy to live off the tax payer. I decided to take the holidays instead and now the tax take from me is dramatically reduced. Obviously I could have tried evading tax like certain civil servants, but that is disguising employment and any private sector consultant would have got clobbered for that.

    On top of the high tax take, you end up paying twice for everything. You think you have paid tax at this high rate because you’ll get access to services? No, you’ll need BUPA for any operation that isn’t life threatening, a private dentist because NHS lists are always full, etc. On top of this before you even get to be a taxpayer, you need to pay student fees in spite of all the tax your parents have paid already, plus the graduates will end up paying back the tuition fees anyway through higher tax rates (Willit’s logic on this was so unbelievably fallacious and empty-headed, how anyone thinks he has two brains is beyond me)

    Eventually we’ll follow our children abroad, they’re already smart enough to realise that on top of their student fee mortgage, paying tax rates that inhibit their chances of a comfortable life and at the same time rewarding their classmates who didn’t bother to study is a no-win situation. The next generation are already asking “why should I pay for this waste?”, I wish I had spotted it sooner.

    The latest scandals over cash for access clearly indicate that the tax payer is way down the list in any party’s agenda. The Tories will keep the immigration flood gates open because that drives demand for new homes and then they get their kick backs from the building trade. They’ll keep handing out our money to corrupt regimes as foreign aid because the arms manufacturers keep pushing money into the coffers as a thank you when the aid is spent on missiles. The fact that this is driving the tax payer to the edge of despair matters not, they are just little people.

    All completely corrupted beyond saving. I hope I can get out before they find a way to take my home from me through new taxation.

    Rant over.

  62. Nigell
    Posted March 26, 2012 at 8:51 am | Permalink

    As ever with JR, very interesting and well put but despite it being about tax, the real message is that even he is wedded to the State spending more and more money which in reality means more waste to go with that spending. Any one with public sector experience will know the poor levels of leadership and management. Political, gender, race appointments at Executive level, not always ability, no accountability for ‘Mandarins’ as the spat between Sir G. O’D and Margaret Hodge shows, annualised accounting and no reward for coming in under budget so everything gets spent, hence the sprees in the last quarter of the year, a ‘value for money’ bidding process which in reality means the cheapest often meaning that Contractors just can’t deliver, exceptionally poor project management etc.

    Some Politicians and the numbers are increasing every year, have no business experience and yet are expected to head up departments employing thousands of people with massive budgets so it is no surprise that there are massive inefficiencies.

    Mr Redwood, by concentrating on tax your are aiming at the wrong target and giving ammunition to the ‘tax the rich’ brigade. You and your colleagues should be working on getting the debate onto the cost saving side. Saying that I have been listening to BS from all parties about getting rid of red tape for decades with no much happening so maybe if you didn’t talk about tax, you wouldn’t have anything to talk about at all!!!!

  63. sjb
    Posted March 27, 2012 at 1:03 pm | Permalink

    JR wrote: There has been a crescendo in the voices of media commentators, various MPs, and the left of centre political parties. All they want is tax.

    Following Osborne’s budget isn’t it true that a further 1.3 million taxpayers will shortly be paying 40% tax?

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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