Watlington's piece today on internal Tory discussion on taxes makes some persuasive points. But I am extremely wary of the notion that a good way to help the case for tax cuts is to "propose one big tax cut for the lower paid". This is a proposal I hear increasingly often from conservatives, for the political reason Watlington suggests - it "neutralises the key Labour attacks that Tories only help their rich friends etc."
But this is extremely short-term reasoning. Targeting tax cuts on the poor, or even - as some suggest - ensuring those who earn less than a certain amount pay no income tax at all would unarguably ensure that the benefits of that particular tax cut are most enjoyed by the poor. But it dangerously undermines the political case for all tax cuts after that. The more that taxes are reduced disproportionately for lower earners, the less benefit they receive from future tax cuts and the freer they are to vote for higher government spending they need not themselves fund. Offering one big tax cut for the lower paid may provide a potent one-off refutation of the left's gibe that tax cuts are all about benefiting wealthy and middle class taxpayers. But every proposal to reduce the tax burden that followed it would face that charge, hurled this time with far more credibility. As broad a tax base as possible paying as low a tax rate as possible is preferable both morally and politically.
