Is tax making our pips squeak yet?

Gordon Brown, guardian of the Government's purse-strings, is losing kudos by the day...

Charles Moore on Inheritance tax:

"The threshold at which inheritance tax now begins is £275,000. That means that getting on for three million homes are liable. In 1997, there was only one town in Britain where the average house price exceeded the inheritance tax threshold; by 2004, there were 78."

Telegraph leader on the "Landlord levy":

"To what problem is Labour's £500 tax on landlords a solution? Is Britain grinding to a halt because a class of idle rentiers is strangling the economy? Do these miserly Rigsbys have wads of ill-gotten notes stuffed under their mattresses?"

Wat Tyler wonders what happened to "the £21.5bn of additional SAVINGS Mr Brown promised us", and Tim Worstall thinks Ministers should personally pay back wasted tax money.

Perhaps the public will soon start to get an appetite for lower taxes!

Deputy Editor

Comments

[Ted]

It's these sorts of taxes that show Chancellors are losing the plot - Geoffrey Howe's increasing tax on lighters, Lamont's tax on mobile phones - they are trying to find something, anything to fill the coffers.

I think though that tax will become an issue not in itself but because fuel, energy costs will start to bite, people will feel less well off (and with growth forecast to be below trend real disposable income - after tax, council tax, mortgage, household expenses, credit card repayments, petrol - will fall or barely increase).

Counter-balancing that is that in an ageing population fear of illness, the pension issues, fixed incomes make people afraid of cuts in the services they depend on - it always seems to be home helps, care homes, local hospitals etc that are cut first. The more dependent you are the harder any cut in public expenditure seems to hit - the council offices still seem to be re-furbished, local authority pensions protected, diversity officers employed. Gordon still comes up with whizz bang ideas about paying kids £15-£25 a month pocket money while NHS closes wards.

So we get the employed finding they aren't as well off but many fearing "cuts" as the state has increasingly made them dependent and fearful. People don't like the burden but are afraid if its lightened the journey will be harder not easier.

We need then to be seen as caring, wanting to support the fearful but reward the hard working - give an optimistic we will make it better rather than the old hard faced managerial tough choices messages. So talk about simpler taxes, sharing proceeds of growth - using tax cuts re-inforces the word "cuts" - and prepare for the Labour onslaught that we are planning to cut £xbn by not continuing Gordon's largesse.

[Sean Fear]

That's a very good analysis Ted. Labour's interests would be served by gradually impoverishing the majority of the population, so that they look to the State as their protector.

Of course that could backfire, and hopefully will do.

[Chad]

"using tax cuts re-inforces the word "cuts" - and prepare for the Labour onslaught that we are planning to cut £xbn by not continuing Gordon's largesse."

I agree Ted, but why not learn the lesson of the Republicans and use "tax relief" not "tax cuts".

This frame has been so successful in the US that Democrat supporting linguists like George Lakoff are working hard to overcome this highly effective frame but are struggling to do so.

"Relief" suggests respite from something bad, and thus benefits those who seek to help you gain relief.

The tax burden in the uk is too high, and we do want relief, but (unless you are in Scotland) all Cameron is promising the meaningless "sharing the proceeds of growth".

"and prepare for the Labour onslaught that we are planning to cut £xbn by not continuing Gordon's largesse."

So why not simply pledge to maintain or better Labour's spending for a fixed period while wastage is identified and removed to maintain the same service more cost-effectively?

You can't be accused of cuts if you pledge to match or better spending.

[Editor]

I'm 100% with Chad on this terms of debate issue and the Don't Think Of An Elephant definition in the dictionary is all about the importance of us minding our language.

[Sam Coates]

Hear hear, the power that lexicon has on perceptions can't be underestimated.
So why not simply pledge to maintain or better Labour's spending for a fixed period while wastage is identified and removed to maintain the same service more cost-effectively?

You can't be accused of cuts if you pledge to match or better spending.
How would this be different to our 2005 manifesto though?

[Ted]

I agree also on the use of tax relief (didn't want to go into a list of alternatives so just used simpler taxes as an example) - its about positive language, positive plans not negatives.

Am a bit surprised by Chad's conversion to pledging to continue Gordon's spending while we review waste. I prefer sharing the proceeds which at least promises any growth in tax take will be shared between tax relief and public services - Gordon will go into next election promising free nursery schooling for all, free PCs and broadband to the less able, free gym memberships to the fat sorry weight challenged, free beauty treatments to the less attractive, £500 council tax rebates to pensioners, any eyecatching offers to bring more onboard his dependency express.

Saying we will continue NHS spending at planned levels for two or three years perhaps but lets not tie our Chancellors hands too much!

[Chad]

Yes it is essential reading, and I am amazed the Tories are not seeking to learn from the electoral success of Bush on the issue of framing tax relief.

It is clearly irking Lakoff that some conservatives are now using his anti-conservative linguistic bible of framing to further their message.

As Lakoff concedes, it was conservative thinkers who took the lead in framing issues properly, and I just hope more effort is made over here.

[Chad]

Hi Ted,

"Am a bit surprised by Chad's conversion to pledging to continue Gordon's spending while we review waste."

But surely I am suggesting nothing different from "sharing the proceeds of growth" but framing it differently?

Think about it. This "sharing" must imply more spending on public services, as it is assuming there is some surplus from growth that is split, with some added onto public services, and some used to tax cuts.

So presenting it as increasing public spending and offering tax relief is offering the same, imho, it a much more effective way that reduces room for the competition to attack.

[Frank Young]

Love the phrase "tax relief", absolutely love it!!! Will use it in all my musings from now on.

[Chad]

Get the book too Frank, it's only 100 odd pages but a great introduction to really controlling the debate with effective frames.

I urge every Conservative to buy it, as it will get you thinking differently.

[Chad]

"How would this be different to our 2005 manifesto though?"

Hi Sam,

You've got to get your overall message and "feel" right. If people aren't listening you can promise all you like and it won't make any difference.

Another core Lakoff lesson is not never tell people what you are NOT, just what you ARE, as people won't see the 'not'.

Lakoff uses the "I'm not a crook" line from Nixon, and the Tory party keeps breaking this golden rule.

In the 2005 election campaign, there was the "it's not racist.." posters. Guess what the public saw?

Even now, Cameron is offering vision but can't help tagging on dangerous 'nots' - ie "we are for the people - not just the rich"
etc.

Don't do it! All the good work at the beginning of the sentence is lost by the last three words, and it just reaffirms that you ARE just for the rich.

Read Lakoff, he doesn't want to help conservatives, but we take use his tools, and how pleasing is it to use the weapons intended for your opponents, more effectively than them?

[Elena]

The fact is that Brown has to do one of three things in this year's budget - cut spending, raise taxes or borrow more. And we can attack him on all three of these decisions, especially the latter (considering the NHS fiasco).

[Editor]

The week beginning 20th March is "Wake Up To Gordon Brown" week on ConservativeHome. Every day we will profile key weaknesses of the Chancellor and how he might be beaten.

[R UK]

You either want to be very poor, relax and live on the largesse - raising your children at state expense and so on.

Or you need to be very rich, and find ways to avoid paying tax, including the route taken by more every year - just leaving the country altogether. We pay the highest rate of inheritance tax in the world....supposely a capitalist country, we are the most socialist that exists.

What you must not be is a hard working middle earning responsible citizen. Gordon will clean you out. That is, if the stress of paying all his taxes doesn't kill you first.

The strangest thing of all is that no one votes for tax cuts any more - that is the power of propaganda. It will even persuade people to bankrupt themselves out of a feeling of social guilt.

Something needs to release people from the bind that labour have put them in. The release button used to be the Conservative Party, but Cameron looks like pulling the knot ever tighter..til the blood vessels finally burst.

[Andrew Woodman]

Sounds interesting Editor. I look forward to how we approach the Scottish Raj and West Lothian question. This is getting talked about more and more and will be quite a way up the agenda in a couple of years imo.

[Jonathan Parmee]

As we have seen since 1945, Labour governments always damage the economy. The Attlee government did little to improve things after the war, the economy declined under Wilson in the late 1960s and between 1974 to 1979... need I say anymore?

Although things have been good since 1997, Brown isn't planning in the long term and is scared to make unpopular decisions. I believe we are teetering on the edge of an economic turndown. This is generally a good indicator that things will be getting worse:

http://news.bbc.co.uk/1/hi/business/4676636.stm

[Ted]

BTW Milosevic has died in his prison cell.

I think Gordon will wish he was still Chancellor sheltering behind Blair after a few months as PM - he has operated a faction rather than a party and is now depending on the golden years of the first period of government for his reputation. He'll find it hard to let his Chancellor (or any Cabinet minister) any autonomy and his government will be ridden by factions looking to the post Brown era.

[Frank Young]

Chad/Editor

I have tried to buy the book following the dictionary link on this site but it isn't available to international customers. Is there anywhere I can get it within the UK?

[a-tracy]

Never mind squeak, small businesses have had their feathers plucked and now it's getting blinking cold!

The latest ideas for pensions tax (an extra 3% on employers), pushing employer's NI upto 15.8% - who is going to create jobs other than the state? I anticipate more and more self employment (out-sourcing) that's less tax for the exchequer which results in a requirement for more tax from elsewhere.

[Ted]

One of the things that really annoys me about NuLabs policies isn't just that they squeeze small businesses through tax but then they add new regulations (for Health & Safety, or parental rights or....) then when the costs are pushed up Gordon has a new wheeze and brings in state provision in direct competition.

State funded nurseries compete with private ones. State funded Libraries compete with small businesses offering DVD rentals or internet cafes. State funds rural development bureaux offer office & communication services. His latest youth voucher scheme will probably be met by council funded gyms or youth facilities. State funded care homes drive out private ones and then are re-organised / closed.

Clause 4 might have been changed but the labour view that state run is better than private is still alive and kicking. Even large businesses get direct pressure from Gov't - look at how the oil companies were leant on after the fuel protest, the whole Rover saga, the management of private rail companies. Increasing the power of the regulators so that ministerial fiat becomes easier.

and self employment isn't the answer it was - the revenue seem to be able to say that you are an employee for tax purposes even though you are not for employment rights.

[a-tracy]

I agree Ted with most of the points you made in the comments on this topic, but in my industry people are classed as self-employed when they're not just to get around the social legislation and the road transport directives.

We've asked for a definitive explanation on a number of occasions but they leave it to individual cases and individual inspectors to decide, it creates an unlevel competitive playing field and provides another example of state intervention i.e. they forced new legislation into our Industry sector which has driven costs up disproportionately than inflation and then when they award tenders for state contracts they give them to companies who generally flout the same regulations by using sub-contractors who have used the tax saving to drive prices down.

[Chad]

Hi Frank, amazon.co.uk link below:

http://www.amazon.co.uk/exec/obidos/ASIN/1931498717/qid=1142090761/sr=8-1/ref=sr_8_xs_ap_i1_xgl/203-4146360-0387915

[Chad]

Oops, it didn't all copy. Perhaps Tim can add a link if he is an amazon affiliate, and earn a few bob for the site too.

[Sam Coates]

Try < a h r e f = URL > NAME < / a > to shorten the link.

[chad]

click here for the book

Thanks Sam.. :-)

[William Norton]

This publication is free

Boring anorak point: "tax relief" is a technical term meaning a set off against what you would otherwise pay; "tax allowance" is an exemption from liability.

I prefer "tax break" or even "tax shelter" as being more neutral as to the structural route you choose to go down - I also think it sounds more positive for UK listeners.

(There's often UK/US linguistic problems in talking about tax. "Scheme" is quite a neutral word over here, but for US lawyers it has connotations of fraud; they prefer "plan", but over here that has implications about motive which could create problems if your, um, mitigation structuring ever reached court. End of lesson.)

[Editor]

I think you're being too picky, William, although technically correct.

Tax break sounds temporary. Tax shelter sounds slkightly dodgy/ evasive. Tax relief implies relief from a burden. I think it works.

[Rob G]

The danger with reliefs, allowances, breaks and shelters is that they all sound like reductions for particular categories of taxpayer. Nigel Lawson was right when he talked about low rates and a broad base. That maximises incentives. But a broad base means doing away with special reliefs, allowances, etc - something that all subsequent Chancellors seem to have forgotten.

[Chad]

For me, 'tax breaks' and 'tax shelters' suggest you are being let off something you should really be paying, whereas "relief" acknowledges that there is an unfair burden on you.

To quote Lakoff:
"For there to be relief there must be an affliction, an afflicted party, and a reliever who removes the affliction and is therefore a hero. And if people try to stop the hero, those people are villains for trying to prevent relief."

And remember Lakoff is not proposing to use 'relief' but seek to combat such a powerful frame. It's tried and tested.

[Rob Largan]

How about tax reduction, sounds pretty clear to me. Or lowering taxes. Simple.

[chad]

Hi Rob,

For the opposition, tax cuts = cuts in services. I can see how that looks logical to the masses.

For the opposition, "sharing the proceeds of growth" also = cuts in services, because they will spend "it all" on public services so any "sharing" must mean less on public services.

Yes, that is a shocking misrepresentation, but it again seems logical and is being used regularly by Labour.

Whereas, tax relief clears conjures up an image of pain that needs relieving. Combine that with a pledge to increase or match spending (in real terms based on the assumption that your plans will make the economy grow larger that your opposition) then you can negate opposition accusation of cuts, and keep the low-taxers happy.

That seems to address two different audiences well to me, it removes all accusations of cutting services, and also promotes the benefits of an overall low-tax economy.

[Christina]

Also, if one argues against tax relief, one comes across as someone who wants to burden people and cause them pain. This is true, from a Conservative perspective.

Talk about 'lowering taxes' has no power to destroy the established frame that low taxes harm people.

One must understand that people are not just rational, we are influenced by many subtle uses of language. Lakoff is a cognitive scientist and a linguist, so he is writing about how our brains actually work, not our untrue assumptions that is we 'just tell the truth' people will hear the truth.

One underlying tradition which makes us resist these truths is that we can believe that 'the truth will set people free.' Just tell the truth, that is all that is needed. This comes from a saying of Jesus, but if you read what he actually said in full, he described himself as the Truth, and was saying He can set us free. To take 'the truth shall set you free' out of context, makes a lie.

[Rob G]

Chad: Clearly views differ on this. I think "tax relief" and "sharing the proceeds of growth" can both be criticised by New Labour on the (alleged) basis that less tax equals less public expenditure equals poorer services. I think the key is to break that equation -- less tax does not have to mean poorer public services if a Conservative Government spends money more wisely than the present administration (which should not be at all hard to do).

So I support the present leadership approach of trying to develop a message which focuses on both sides of the equation - tax and spending - not one (tax relief) which looks only at half the picture.

[Richard]

82 billion pounds is wasted every year according to the TPA. The ECB puts it at 83 billion. When are the Tories going to start shouting about this? One would have thought they'd have jumped at the opportunity. We could either pay off the national debt in a matter of years or immediately cut government spending to around 35%. Personally I'd be keener on under 10% but I accept that's not politically possible.

[Donal Blaney]

Why do we not go down the road of offering temporary tax relief as a tactic? We could say we will cut tax on petrol, or personal income, or corporation profits or whatever for a fixed period of, say, 3 years and that in 3 years time there will be another parliamentary vote where MPs and Peers could vote to renew the tax relief (through a sunset clause in the Bill) or to abolish the tax relief (and in effect to increase taxes).

That way we would be able to get credit for tax relief in 2009 and in 2012 - both of which would presumably be voted against by Labour and the LibDems, the second time only a year before an election...

[matt wright]

This is a very important debate. I don't think there is yet a widespread and strong enough feeling that tax is hurting but there are signs that its beginning to hurt. The comments about those on fixed incomes also fearing cuts to services is the key point. This is where Labour has stuffed us over and over again with their spin and false representations. However now they are cutting services and they have peaked with their sepnding and will have to make yet more cuts. The question might be re-phrased as to how service cuts are hurting people. In the 2005 election there were several reasons why we didn't do as well as we could have. One of the reasons was that voters couldn't take our policies seriously if our eceonomic argument didn't stack up. They believed that Brown had produced a stable economy and they felt fairly well off. They thought we might put that at risk. It is hard to convince people that you will improve public services if you can't convince them you will look after and grow the economy that pays for the public services. At the same time talk of "tax cuts" is interpreted as service cuts by most of the public. The answer to this conundrum in my humble view is to put forward major tax relief for business in order to re-build the economy while saying that shoulr this bear the fruit we expect it will, then we will aim to lower the burden of tax on householders.

Matt

[Rob Largan]

The truth of the matter is, call it whatever you want, tax cuts, tax relief, tax breaks, etc. It will only work if we clearly, coherently and constantly make the case for it. That is what really matters.