Tax and Pain!!
As I said would happen the Lib Dems at their conference voted through their new tax plans and rejected the 50% policy.
All the hype over the last two day's that it might lose (which was never on the cards) was spin to get the media interested - and they accuse Labour of this sort of thing?
The 50% policy was hardly a totem as it was only brought in by Charles Kennedy during the 2001-05 parliament to attract a few Labour voters and replaced the infamous Ashdown 1992-2001 "Penny on income tax to pay for education/health/pensioners - delete as appropriate" (note it was education at first and then tended to vary from 1999). This earlier policy was dumped as the Lib Dems recognised that the Labour Government had actually increased public spending and the old policy became irrelevant.
The 50% policy was also becoming less relevant due to the greater variety of capital and spending by the very wealthy. Clearly it has a strong symbolism and is redistributive, but has in recent years had the danger of being seen as a threat even by people well below the current 40% threshold. That is why we have the move to Stealth Taxes and Green Taxes that can also redistribute too.
With the Lib Dems dropping it, only John McDonnell's campaign for Labour Party Leader is now advocating the 50% rate though he is currently polling just under 10% in the electoral college. Will he now make this more of an issue for his campaign?
The big problems for the Lib Dems is having adopted the new policy they will now pretend it won't affect anyone, just as they did with Local Income Tax.
They are claiming that only 10% of voters will be worse off, which, means we can pretty much assume the real figure is 20% and probably over 30% in Sutton, which of course is more affluent than the national average. Will we see local Lib Dem literature saying that some people will be worse off?
I suspect the new policy will go down well in places like Hornsey and Wood Green and Brent East. I just wonder whether local parents taking their kids on the school run will be so happy about possible extra costs. The assumption seems to be that since the Council has green policies all the residents are very green. Recycling rates of 30% after a decade or more of effort by the Council say to me that residents may be less signed up to the messages than people think.
Combined with the retention of Local Income Tax, I wonder whether Paul Burstow and Tom Brake may end up regretting their support for this Tax policy?
All the hype over the last two day's that it might lose (which was never on the cards) was spin to get the media interested - and they accuse Labour of this sort of thing?
The 50% policy was hardly a totem as it was only brought in by Charles Kennedy during the 2001-05 parliament to attract a few Labour voters and replaced the infamous Ashdown 1992-2001 "Penny on income tax to pay for education/health/pensioners - delete as appropriate" (note it was education at first and then tended to vary from 1999). This earlier policy was dumped as the Lib Dems recognised that the Labour Government had actually increased public spending and the old policy became irrelevant.
The 50% policy was also becoming less relevant due to the greater variety of capital and spending by the very wealthy. Clearly it has a strong symbolism and is redistributive, but has in recent years had the danger of being seen as a threat even by people well below the current 40% threshold. That is why we have the move to Stealth Taxes and Green Taxes that can also redistribute too.
With the Lib Dems dropping it, only John McDonnell's campaign for Labour Party Leader is now advocating the 50% rate though he is currently polling just under 10% in the electoral college. Will he now make this more of an issue for his campaign?
The big problems for the Lib Dems is having adopted the new policy they will now pretend it won't affect anyone, just as they did with Local Income Tax.
They are claiming that only 10% of voters will be worse off, which, means we can pretty much assume the real figure is 20% and probably over 30% in Sutton, which of course is more affluent than the national average. Will we see local Lib Dem literature saying that some people will be worse off?
I suspect the new policy will go down well in places like Hornsey and Wood Green and Brent East. I just wonder whether local parents taking their kids on the school run will be so happy about possible extra costs. The assumption seems to be that since the Council has green policies all the residents are very green. Recycling rates of 30% after a decade or more of effort by the Council say to me that residents may be less signed up to the messages than people think.
Combined with the retention of Local Income Tax, I wonder whether Paul Burstow and Tom Brake may end up regretting their support for this Tax policy?
posted by Charlie Mansell at 2:49 pm
3 Comments:
Even if the IFS claim that 90% will be better off, it is very likely the figure will worse in a more affluent "post-scarcity" suburban borough like Sutton with much higher car ownership, higher air travel (Heathrow and Gatwick very convenient compared to a London mainline railway station). The point I am making is that the 90% figure will blind the local Lib Dems into believing there are very few losers locally, when they should be honest and explain to the 20-30% losers in Sutton (mainly younger Lib Dem voting families rather than the Tory voting elderly) why they should support this policy. Somehow I suspect they won't!
I would love to do the maths on this, but I fear that this sort of taxation unlike property and income taxes is a moving target where some people will change their behaviour and Vince Cable will need not just the 15 billion cuts to fund "middle income pledges" such as free personal care for those elderly who don't already get it and abolition of tuition fees for non means tested students, but also additional funding to pay for the shortfall caused by the behaviour change.
When we hear 10% will be worse off natioanlly, it is presumably unlikely this will be an evenly spread 10% across the country?
I think the ball is actually in the Lib Dems court to show that only 10% of Sutton residents will be worse off. Sutton is in the top 20% of affluent areas in the country and the maths point to more than 10% being worse off.
Green Taxation is not bad per se, but we should stop kidding ourselves it will be painless rather than getting into the situation where the Lib Dems were not honest enough to say "tough" to the 30% of people nationally that on their own figures would have been worse off under their LIT proposals (again almost certainly higher in Sutton).
David Cameron's speech on the subject this week was a lot more realistic than the messages that seemed to come out of Lib Dem Conference on almost pain free changes to taxation.
I would love to do the maths on this, but I fear that this sort of taxation unlike property and income taxes is a moving target where some people will change their behaviour and Vince Cable will need not just the 15 billion cuts to fund "middle income pledges" such as free personal care for those elderly who don't already get it and abolition of tuition fees for non means tested students, but also additional funding to pay for the shortfall caused by the behaviour change.
When we hear 10% will be worse off natioanlly, it is presumably unlikely this will be an evenly spread 10% across the country?
I think the ball is actually in the Lib Dems court to show that only 10% of Sutton residents will be worse off. Sutton is in the top 20% of affluent areas in the country and the maths point to more than 10% being worse off.
Green Taxation is not bad per se, but we should stop kidding ourselves it will be painless rather than getting into the situation where the Lib Dems were not honest enough to say "tough" to the 30% of people nationally that on their own figures would have been worse off under their LIT proposals (again almost certainly higher in Sutton).
David Cameron's speech on the subject this week was a lot more realistic than the messages that seemed to come out of Lib Dem Conference on almost pain free changes to taxation.
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