Has Brown "decontaminated" tax cuts?

"Decontaminating" the Tory brand has been a big part of Project Cameron.  In a comment on another thread William Norton wonders if a lasting effect of yesterday's Budget is that Brown has "decontaminated tax cuts."  If Brown is happy to be associated with lower taxation it should be harder for him to paint a (real) tax-cutting agenda as irresponsible.  Let's hope so.

Comments

[Mark Wadsworth]

Conservatives and LibDems last year both said cut basic rate tax by 2% and scrap the 10% band by increasing the personal allowance.

So the Goblin King did the less important bit but went in the opposite direction on the really good bit.

If you want unemployment to go down, you have to end the unemployment trap (ludicrously high marginal withdrawal rates mentioned by DC yesterday). That's good for the unemployed and good for the economy. No brainer, really.

The Goblin King is so evil that he will offset the 2% basic rate cut by increasing the Tax Credit withdrawal rate by 2% to 39%, ensuring that marginal withdrawal rates for benefit claimants still lose 70% to 95% of their gross wages. Hardly surprising that four million people prefer to stay on the dole.

[adam]

I am pleased that Gordon Brown cut income and corporation taxes yesterday regardless of what he takes from elsewhere and has put tax cutting at the top of the political agenda.

David Cameron and George Osbourne should now show a bit of courage and put the Tories on a fast and strong tax cutting agenda and not be fearful of this. As a party we should say we believe in lower taxes and will cut them and not be scared off by the accusation of a party that seeks to cut public spending.

[Ray Gillespie]

It is not right to approve of Gordon's tax cuts "regardless of what he takes from elsewhere" as he has taken it from exactly the place he is cutting it from. By abolishing the lower 10% bracket he has essentially raised this 10% level to 20%, which will pay for the decrease of the basic rate from 22% to 20%. Also, he may be cutting corporation tax by 2% (In 12 months time I might add!) but he is also raising small business tax by 3% to pay for it! So in both cases, the worst off people will pay more tax!

He may have put tax on the agenda, but not for the reasons he would like. Tax cuts are now in the media spotlight because he has shown what a fallacy they can be and gives a good example of how deceitful a Labour Chancellor can be.

[George Hinton]

Only an idiot will see Gordo as a tax cutter, this budget was a cynical exploitation of the leadership contest and a boost for grassroots Labour ahead of the Local Elections.
The cuts are a chimera, the major boost of the £43,000 band limit doesn't come into play until 2008, the loss of the 10% band affects the low paid and makes them even more dependant on state handouts. This budget is revenue neutral.
But, as a propaganda weapon for NuLab its value is inestimable. DC and the party have the wind taken from their sails and will know have to work very hard to retake the high ground. Policy will have to expand into other areas.
For corporate UK no favours, but Gordo will likely lose the tax revenue from Barclays if they merge with ABN-AMRO and head off to The Netherlands.

[adam]

Whichever way you look at it, Brown has cut income and corporation taxes. I accept he has taken from elsewhere and has removed the 10% band, but we as a party have been so timid in dealing with tax - we would never have gone into the next election with a pledge to cut corp and income taxes by 2p in the pound. just look at the mess Letwin got us in at the last election by cutting wastes and reinvesting in but with a small tax cut somewehere in there.

We have accepted that high public spending is acceptable even if this comes at the expense of borrowing and eventually high taxes. The onus is on Cameron and Osborne to review our strategy and go for more tax cuts and lower public spending rather than the wishy washy stuff we have been getting about air taxes etc

[Mike]

David Cameron and George Osbourne have egg all over their faces, and rightly so. By repeating the mantra of no tax cuts and maintaining current levels of public expenditure they have appeared evasive and unconvincing.
At the next election, the public will vote for the party that will reduce the current burden of taxation and reduce waste in the public sector.
Mrs Thatcher offered clarity and had a clear sense of purpose; my advice to Cameron is: ditch the focsus groups, spend more time outside of the M25 and find out what is happening on the real world. If he doesn't he may get a very unpleasant surprise from UKIP.

[Ted]

The purpose of the "tax cut" was to over-exite those in the party and the TPA so that under pressure Osborne & Cameron would move away from message of stability and sharing proceeds of growth towards a classic Tax cut agenda. Gordon would be happy on that because it moves he spotlight from 'where has the money gone' to 'what will the cuts hit' and plays into his preferred campaign slogans.

It wasn't a tax cut - tax cuts leave most people better off. This only does if benefits are taken into account (tax credits are a benefit). Gordon has exposed a weakness to defending his corner as regards Osborne's policies on simplification and the 'sharing proceeeds' mantra but he gave that advantage away in hope of getting a bigger one.

[Curly]

The general public are crying out for real meaningful tax cuts that put their own money back in their own pockets. They do not see or feel any real benefits from the massive rises in public spending over the Blair-Brown years and cannot fathom where the money went.

There is nothing wrong in offering a radical alternative to the big state machine and giving people more choice of what to do with their own earnings. Past history proved that, let's stop conning ourselves!

[Ray Gillespie]

Whichever way you look at it, Brown has increased income and corporation taxes for those on bare minimum salaries and for small businesses!

[Peter]

Will we got a apology from the Labour party know that they will accept the tax commission plans on cutting the basic rate of tax by 2%.
As I see it as the only three points of the 40 point plan we couldn't afford was the following.
2% cut in basic rate of Income tax.
5% cut in Corporation tax.
Increase in allowance to get rid of Brown's 10% rate.
I think we should know say we will implement the whole proposal as a Party.

[Jon Gale]

"David Cameron and George Osbourne have egg all over their faces, and rightly so. By repeating the mantra of no tax cuts and maintaining current levels of public expenditure they have appeared evasive and unconvincing."

Maybe it was unconvincing because in fact they never said any of that!

DC and Osbourne have said that over a parliament they will reduce public spending and taxes, "sharing the proceeds of growth" involves cutting taxes, etc.

What they have refused to do is pledge specific tax cuts now, because "we dont know what the state of the economy will be" and therefore talk about revenue neutral things like offsetting green taxes with relief for married couples etc.

Softly softly catchee monkey.

If we are bounced into a "fast and strong tax cutting agenda" we will be painted as slashing schools and hospitals and will lose the next election to Uncle Gordon, resulting in another 5 years of Labour.

However, it is encouraging that the 'Tax Con not Tax Cut' idea is so widespread in the news this morning.

[Peter Hatchet]

12:04 Ted - very shrewd analysis.

It is clear that "tactically" this is the best thing Gordon could have done.

We should continue not rise to the bait, but subtly indicate how worse off the poor will be and maybe initimate that we'll take the lowest paid out of tax altogether in the medium-term.

Must avoid specifics though!

[Yet Another Anon]

Gordon Brown and Tony Blair, but especially Gordon Brown have perhaps shifted Labour thinking away from simply being focused on never cutting tax rates, with the voting for in 1997 a cut in Basic Rate Income Tax proposed by a Conservative government that by then really was only surviving until the budget could be passed because the opposition could bring it down at any time by then. That and the creation of the starting rate has encouraged many in Labour perhaps to start to see tax cuts at the lower end as a means of redistribution. The recent budget sent out a mixed message - fans of means testing on the Labour side will see it as a form of redistribution to those with few assets generally rather than just low earnings, people more favourable towards greater universality on the Labour side will tend to see this as being a reduction in redistribution but also with an extension of means testing worsening administrative costs and social problems.

On the political side, with it mainly being poorer people who are failing to turn out to vote the changes do tend to target those groups whose turnout has been holding up and even increasing in recent years.

Now the Liberal Democrats will have to revisit their fiscal policies - do they want to recreate the Starting Rate, or do they want to focus on reducing Basic Rate tax further and addressing the threshold more. If merely they propose to reintroduce the Starting Rate then this blunts the thrust of their repositioning as not being a socialist party. If they propose also further Basic Rate tax cuts does this come from scaling back spending plans, extra borrowing or raising other taxes further than they proposed.

David Cameron & George Osborne are now going to face increased demands to further build on existing Basic Rate cuts, do they propose reintroducing the Starting Rate and/or raising Income Tax thresholds, and/or further cuts in Basic Rate Income Tax or do they say that the government has done some of what they proposed doing and so there is less to do?

[Graham D'Amiral]

Gordon Brown has paid for his tax cut by taxing the low paid in to poverty and forcing them on to tax credits. He totally fails to understand the difference between lower taxes and income support. His budget changes make it more difficult for the least well off to live independently of the state and offer no guarantee that those who need help will get it.

A chancellor who has delivered the highest tax burden in history isn't going to convince anyone he is a tax cutter at heart. The truth is that Gordon Brown is trying to kick start his leadership campaign and he's trying to do something about "having the poll ratings of michael foot", what this election stunt can't hide is the previous decade of hitting the hard pressed British Public with higher and higher taxes, that's his legacy and he's stuck with it.

[Geoffrey G Brooking]

My tax rate for 2008/2009 has just doubled from 10% to 20%.

Now who once told me that New Labour always looked after the working class?

And who was it who promised in 1997 not to increase tax at all?

Yet more broken promises from the New Labour school of bullshit!

[Og]

It is a moot point that "tax cut" was a contaminated phrase in the first place. Cameron lacked the courage to advocate smaller government, which I think was an open door to push on, given the failure of Nu Lab to improve services despite record spending. Critics will say that his poll rating is in part DUE to his "don't frighten the horses" tax 'n spend policy. But I disagree completely. There is a time when the electorate is keen to pay tax for what they consider to be underfunded public services; there is also a time when they can spot incompetence and waste, which is what they have done with Nu Lab (coinciding with distaste for Blair foreign policy).

My bet is that the country was ready for a fresh-faced conservative approach (Cameron's USP is that the country does not associate him with Major/Black Wed etc, despite his attendance at the event). The voters would have anticipated dry Tory economics to accompany it. But Cameron rushed headlong into middle ground which was itself contaminated by years of big spend for little result. That he finds himself outflanked by Brown is no surprise at all. I know, I know, the tax take will rise, but Brown got plenty enough "Tax Cut" headlines to win the political battle.

Will Cameron now look a fool by advocating sensible tax cuts in his next manifesto? Yes, but we will forgive him. What he won't get forgiven for is a stubborn West-European Socialist-sized economic policy. When voters want large amounts of their hard-earned taken away in tax, they don't vote Tory (and why should they?)

[A S 'Yogi' Yogeswaran]

David Cameron's response to the budget yesterday completely missed the point. cameron should have homed in straight on the fact that the 10% starting rate was abolished and the other fact was that it is 'jam tomorrow'.

What Gordon Brown has shown is that he is the master of Spin. My feeling is that there will be a General Election in October, where Brown will trumpet his 'tax cut' and also pooh pooh the Conservative front bench idea of higher frequent flyer tax. We will look really feeble and stupid.
Labour will win that Election and the next Chancellor can quietly put the basic rate tax up but not restore the lower starting rate.

It is now time for all conservatives who believe in small Government and lower taxation, to drag the leadership back to its senses (kicking and screaming) and make them see the light - the sooner we get rid of our goody goody tree hugging image the better.

[Matt Davis]

Tax cuts themselves were never contaminated in the first place, except in the minds of the silver spoon in gob clique who are dominating our party, to whom, unlike the bulk of the electorate, they don't make much personal difference. What was contaminated were the cuts in services that we allowed the left and their media supporters to tie to tax cuts as their inevitable result.Since Labour have now very effectively proved that 99 tax rises can also lead to cuts in frontline services tax cuts, after 10 years Brown and Bliar's waste and profligacy, are easily achievable without any cuts to the services that people genuinely care about and any Conservative worth their salt ought to be able to delink the two and argue successfully for genuine tax cuts. Of course the current spin is that Labour have now cut taxes whilst the Tories have only specifically promised to introduce new ones. What a strange world.

[Lord Cashcroft]

Nu-Lab sets the agenda for the Tories. Welcome to planet Dave........

[dog biter]

Tax cuts are not the only answer. An entirely new tax regime is what is needed.

Although it may not be fashionable to say it, a sliding scale of tax depending on how much money you earn is massively unfair and, although we have all grown used to it, cannot be justified morally... unless you are a socialist whose beliefs are borne by envy. Are DC and his chaps socialists? Though I have my doubts, I would hope not.

In that case, Osborne needs to introduce a flat tax whereby EVERYONE in the UK pays the same rate of tax regardless of how rich or poor they are. There was quite a lot of Flat Tax talk a couple of years back but now all has gone silent under Dave's new cuddly regime.

Likewise, we could go another step and introduce a flat benefits structure whereby every UK citizen receives a basic handout to keep them above the poverty line. Even the very richest would get this. LIke the flat tax, this would do away with vast numbers of civil servants and it could all be done electronically thus saving us all huge amounts of public money which would go to pay for the possibly decreased tax revenues.

Also with a flat tax there would be no argument about how much you paid. It would be, say, 25% of anything you earn. The only band would be a starting band of, say, £5000 whereby anyone earning less than that wouldn't pay any tax at all.

The above is all rather simplistic. But worth a thought.

[matt wright]

Labour are trying to push us into loose talk of widespread tax cuts and we would be foolish to fall for it. However we could indicate how we intend to look at any future tax cuts and the best focus for that would be:
1) to tackle the poverty trap and releive tax/benefit cycle on lower paid,
2) genuine tax reductions to small and medium sized busineses to encourage enterprise

Matt

[clive elliot]

Yoqueswaran is unfair to Cameron. No way could Cameron have picked up, from the words uttered by Brown in the budget speech, that the 10% rate was going to be replaced by a 20% tranche. Purposely, I think, Brown did nothing to unsay the impression he left that tax on that first tranche was just abolished!

Snidy git.

[Yet Another Anon]

Labour will win that Election and the next Chancellor can quietly put the basic rate tax up but not restore the lower starting rate.
None of the 3 main parties would put the Basic Rate of Income Tax up and any party that did so would find themselves severely hampered when it came to attempts to win the following General Election - even if overall taxation fell. There has been a lot of sneakiness in the past 28 years with government focusing on the rates but allowing thresholds to fall and while taxes overall as a proportion of GDP have been up and down there has actually at no point been the fundamental restructuring of the state neccessary to reduce spending committments over the longer term in order to build lower levels of spending into the system.

The privatisations in many cases involved the state continuing or even increasing what it had been spending, lots of new regulators were created. If it is decided that something should no longer be done by the state and that it should be sold, surely normally there should be no increase in regulation or funding at the same time, indeed regulation and state funding should be cut. If there is still heavy state involvement over a number of areas in an operation then really it should not have been privatised in the first place; railways and utilities are only financially privatised but effectively are still nationalised industries effectively with huge interventions going right back into the time of the Conservative government. Some of the privatised companies still need extensive de-nationalisation and a sharp cull of regulators - the airline industry for example should only be regulated for national security and safety matters, other than that the Competition Commission can look into overall structure - everything else should be left to the market.