The politics of envy is back

The Labour Left has a lot to enjoy at the moment.  All the talk - across the globe - is of more regulation and state control.  But nothing will give them more pleasure than the return of higher taxation on the wealthiest Britons.

It was one one of the few real accomplishments of New Labour that they appeared to understand that heavy taxation of the wealth was counterproductive, leading to a brain drain of talent and a killing of incentives.  That belief died today.  Old Labour is back and with it an attempt to reignite the politics of envy.  Paul Goodman MP recently reminded us where envy takes us: "In the medium to long term, envy means lower profits, less wealth, fewer jobs, less money for public services."

A higher tax on the wealth isn't going to raise much extra revenue.  That's not its point.  It's all about political positioning: cuddling up to the LibDems in the hope of a future coalition deal and of wrongfooting the Conservatives. It's also dishonest; Brown and Darling are hoping that voters will believe that only the rich will be hit by today's boomerang budget, when in reality we'll all be hurt by Labour's tax bombshell. Tick, tock, tick tock.

Britain doesn't need more tax; it needs a leaner, reformed public sector.  In a superb piece on today's Platform, Susie Squire discusses The TaxPayers' Alliance's latest Public Sector Rich List. She shows how the rich are getting richer in the public sector and she notes a complete breakdown in the relationship between reward and performance. Read her piece here.

Tim Montgomerie

Comments

[Iain]

"A higher tax on the wealth isn't going to raise much extra revenue."

And that is the line the Conservatives should take on the issue that it isn't going to raise that much money, and in the scheme of things its not that important compared to structural deficits our country is mired in. The Conservatives should NOT make this a totem issue, there are much more important issues around that deserves their attention.

[Jennifer Wells]

You mustn't fall into Labour's trap Tim. Labour want the Tories to be mad at this. We mustn't be diverted from our key messages: Labour's borrowing bomshell / Labour's tax con / Labour's bloated and wasteful state.

[Tim Montgomerie]

I don't disagree Jennifer. Labour surely want the Tory frontbench to over-react.

On this occasion, I make my point as a commentator rather than as a political tactician.

[DCMX]

Oooh. That eye is horrible.

[GB£.com]

With Social Democrats across Europe creaming themselves with excitement as this 'opportunity' to impose their will, is this really the time to have SD-in-chief Finkelstein so close to the Shadow Chancellor?

Have the Social Democrats won or have conservatives just given up the fight?

[Comstock]

Predictably, I'm pretty happy about this!!

Shame it's not 50% but 45% is pretty damn good!

[The Bishop Swine]

“A higher tax on the wealth isn't going to raise much extra revenue."

About 2 Billion,so its not peanuts. Here for once I must side with Labour if this were the only tax move they made it would make a little sense. After all 40% is historically low and they can afford it. However its not the only Tax move is it ? Seems that we are going to borrow billions to give away in the short term, a very bad policy indeed. Of course this is an extension of class war, but its not a bad as during Wilson’s days when real tax rates reached £1 1s 0d in the pound for those considered wealthy. The labour government then had to limit the amount of money that could be taken out of the country , to try to stop it all going abroad. Of course by the time a modern government had announced a really big tax attack the clever money would be gone with a single click, so lets be thankful for progress not only in IT, but also in the dogma that underpins the Labour party. The days of taxing the wealthy out of existence is over. I expected a hike for the top 2% with a 50% tax rate being a real possibility, maybe that will still come but not today.

[London Tory]

I think this is a major tactical mistake by Labour, which will hit floating aspirational voters in target seats.

Lets hope our frontbench are fully geared up to attack it....

[Western Star]

It has always amused me to hear us described as "The Nasty Pasty" when it is Labour, red in tooth and claw that has always scratched and picked at the class divide to open it into as large and as sore a wound as they can manage! They have clearly forgotten the lesson of Crewe & Nantwich!

[Comstock]

I don't see anything wrong with a 'class war' as long as (and this is important) it is a war on personal wealth and not on wealthy persons.

Seeing rich people as bad people is wrong, asking them to share their wealth is not.

[RichardJ]

All those earning over £150K should go on strike. Then we'll see just how much the government wants to tax them.

[jennywren]

This move is pretty irrelevant to the overall situation, but obviously politically significant.
The Conservatives should resist the temptation to comment on it AT ALL, since doing so will send out the wrong message.
Far more important is the failure of the Government over the past few years to keep personal allowances ahead of inflation. This has resulted in people of almost all income levels paying a lot more tax. I see no reason why this should now stop.

[Felixstowe Fiddler]

I support 45%. So-called wealth creators are not just helping employment but also creating wealth for themselves. It is a trap for Cameron and Osborne and if they fall into it, then the party deserves to forfeit electoral support.
As for the other major rumoured - I mean briefed - policy in Darling's speech today, reducing VAT will have little impact on spending - are we all going to rush out and buy Christmas presents costing £117.50 because they've been reduced to £115? As it is a regressive transaction tax, the wealthier will benefit most because no matter how much you earn, you pay the same for goods like washing machines whether you rake in £20,000, £200,000, or £2m a year.

[RichardJ]

"Seeing rich people as bad people is wrong, asking them to share their wealth is not."

They're not being asked to, they're being forced to. That is what is wrong.

[tim]

Cameron will make a substance free reply.
He can't support this and he can't oppose it.
Should suit him just foine for now.

[graham wood]

"A higher tax on wealth isn't going to raise much revenue"

To which the Bishop Swine responds: "Agree 2 billion is not much but its not peanuts."

But in response, I'm amazed that the Chancellor does not raid the piggy bank which the British taxpayer conveniently refills for him with unfailing regularity, namely EU coffers to which we contribute in all a staggering £55.775 Billion p.a. (£6.367 million every hour)
Why so timid Alistair? Just stop the Danegeld flowing and fill the national purse with what is rightly ours and a bonanza for hard up Chancellors, then you will not need to scrat about for the relatively minor £billion or two here and there.

[The Bishop Swine]

"Seeing rich people as bad people is wrong, asking them to share their wealth is not."

Not all poor people are lazy BTW and most people on I.B. are truely sick.

"They're not being asked to, they're being forced to. That is what is wrong."

The same thing can be said about poor people and the middle class. The truth is the lower your income the greater the percentage of tax you pay. In a time of economic trouble we all have to make sacrifices for the good of us all. Now you may think that makes me a socialist, but in reality I am a one nation Conservative.

[Vincent Wall]

I don't rule out the Tories supporting it. Lets not forget that this is the team that wants to clobber non doms.

[resident leftie]

Thank you for this, Editor. It's what the headline writers were hoping for from the Tories.

For all you swivel-eyed BBC haters out there who always point out so-called bias - their headline:

"Top earners face income tax rise"

All those poor people on £150K+ having to stump up a little extra in a couple of years to help the poorest. Definitely worth a headline.

The horribly inequitable distribution of wealth in this country is something we should address. A 45% top rate will help there, but I'd like to see a wealth tax and we must support Obama's efforts to close down tax havens.

[London Tory]

The Bishop Swine

Having worked at the DWP, I can assure you that the majority of I.B claimants are perfectly capable of doing a days work.

They choose not to beacuse of Housing Benefit, Council Tax benefit etc..

[Mike]

resident leftie, income isn't 'distributed' by some magic pixie, it is earned by individuals.

Attempting to 'iron it out' just makes people right across the board less inclined to put in any effort.

Then again you just view people as numbers on a spreadsheet rather than individual human beings don't you?

[Deborah]

"The horribly inequitable distribution of wealth in this country is something we should address." - resident leftie

I agree - but a 45% tax on those who earn over £150K is not going to do it. It is sad that when serious measures are needed, Gordon chooses to play gesture politics.

The answer to the inequitable distribution of wealth does not lie in reducing incentives to work harder.

...and those who pay less tax than their cleaners will continue to do so.

[GB£.com]

If Darling announces that borrowing will be brought under control by slowing the growth of public sector spending in the future (even if it is not as slow as the Tory plans), where would that leave Cameron?

He would be forced to agree that it is a good idea, as that is his plan too, and it will make his tax bombshell ads look very silly indeed as both sides will be agreed on the method of solving the debt issue, just differing over the figures needed to achieve it.

[Matthew Cain]

Former Blair adviser Matthew Taylor seems to argue that the public may even applaud the tax rises: http://www.matthewtaylorsblog.com/politics/the-politics-of-tax-pledges/

[John Moss]

A good lesson I learned many years ago is to fight a battle on ground of your choosing if at all possible.

Brown is clearly trying to fight this battle on his preferred ground, namely, we can cut taxes and pay for it later - if you don't agree, what will you cut now?

We should not be drawn. We should continue to point out the seven years of deficit budgets, running up £200 billion plus of debt already, with £130-£150 billion more to come now. We should translate that into figure people can feel.

Every tax-payer is now paying £300 a year to cover the interest on existing debt - this will double in the next two years.

I also agree with Tim's suggestion some weeks ago that the honest politician will get the reward. I am convinced that we need a cash freeze in overall Government spending from 2010/11-2013/14. Departmental budgets can be adjusted within that total, but We have got to get state spending down so we can reduce debt and reduce taxes.

Overall this would mean, a real terms cut of 2-3% equating to £18-£20bn per annum, cumulatively, £200bn. Reducing debt by £100bn and taxes by £100bn over the period sounds to me like, "sharing the proceeds of sound management of the economy".

[john parkes]

Still more fiddling with detail while the bigger picture is ignored; perhaps as being too difficult to take on? It`s about time we took a radical look at the role of government and what it costs.
If governmental policies concentrated on those aspects which are beyond the scope of the individual, such as national defence, and left the remainder to the individual, the economy would be in a leaner, healthier state. Perhaps we might discuss here alternative ways of providing services such as health and education, while at the same time accepting the need to take account of providing for those of limited means. In doing so, we might be on the way to smaller government and the encouragement of enterprise.
If we can admit such an approach is both possible and desirable, perhaps some of our expert contributors here might now suggest how such an alternative approach could be achieved; even if only for the benefits such mental gymnastics would offer.

[Mark Hudson]

I don't care who introduces it, if the Conservatives confirm no personal income tax rises, they have my vote. I am not paying 45% for anyone.

[Eveleigh Moore-Dutton]

Interesting that the proposal to increase the tax on the well-paid is only due to come into force at a later date. I suspect that this is the beginning of the setting out of Labour's Election manifesto. It seems to have Peter Mandelson's fingerprints all over it.

[JS]

Cameron's immediate response to this blatantly political and spiteful move by the Government (thoroughly typical of all Socialists) should be that, in principle, Conservatives will
always oppose all long term rises in any taxation and strongly support less public spending and interference in people's daily lives. He should emphasise that any necessary rises in either taxation, borrowing or spending during the current crisis -very largely only caused by Gordon Brown's personal gross mismanagement of the economy over 11 years - should be temporary and will be reversed at the earliest opportunity by a Conservative government as and when the economic situation improves. Our front bench is letting Brown off the hook by not continually ramming home again and again where the chief fault for the present situation lies. Left wing politicians, like leopards, never change their spots - and high taxation and a desire to control is inbred into them.

[Mrs Campbell]

If introducing a higher band of tax is the right thing to do to fund efforts to cushion the recession why don't the Government just come straight out with it and do it now? It would be a lot cheaper and doesn't have the risks of increasing borrowing by the same amount now and trying to get the money to repay the debt (plus accrued interest) in the future. After all, they have the power to do it now. Why won't they do it? Could it be because even sweating the "rich" is thought to be a vote loser in 2009/10? As to VAT reductions who is going to rush out and buy a big ticket item when the saving on £1,000 is only £25??? It's all fiddling at the margins

[resident leftie]

Posted by: Mike | November 24, 2008 at 10:45

resident leftie, income isn't 'distributed' by some magic pixie, it is earned by individuals.

No, income is redistributed by progressive governments. Most of this so-called "earned" wealth is not earned at all. In fact, the highest 10% of earners pay a lower proportion of their income than the lowest 10% (42.6% vs 34.9%). Surely even you think that is unfair?

http://www.publications.parliament.uk/
pa/cm200607/cmhansrd/cm070222/text/70222w0005.htm

Attempting to 'iron it out' just makes people right across the board less inclined to put in any effort.

There is no evidence whatsoever for this ideologically driven view. Growth of GDP is not affected by income distribution.

The relationship between taxes as a share of GDP and growth and productivity is statistically insignificant, while the relationship to inequality is strong and significant:
http://www.ccsd.ca/pubs/2000/equity/2.htm

Then again you just view people as numbers on a spreadsheet rather than individual human beings don't you?

I make no apologies for looking at the evidence before coming to conclusions rather than relying on Daily Mail style anecdotes for policy making, yes. I see you are wringing out your hanky for all those on £150K+ paying their bit. I don't suppose it comes out for the poorest though. It's the people on the lowest incomes who are paying a disproportionately high tax, not those at the top.

Here is some more of that irritating evidence you hate so much:

The income of the richest 10% is greater than the income of the lowest 50% combined. Not exactly an evil socialist economy, is is? Their wealth is also more than 50% of the total wealth of society. Half the population owns less than 7% of the wealth.

The income of the richest 10% has been steadily increasing as a share of national income compared with the other 90%. Labour's progressive policies have had some benefit here, but it would be unredeemably awful if they had done nothing.

Personally, I think the top 10% should pay at least an equal proportion of their income as the lowest 10%.

Do you really think this tiny and long overdue adjustment is going to make us into a socialist state? Only the most blinkered and ideologically driven would think this is anything to do with envy.

[pp]

There is a solution.

Brown has already accepted the principal of reducing people take homepay, so...

So instead of increasing income tax and risk wealth creators leaving the country or avoiding the rise... Cut public sector pay - they can't leave the country, they don't generate wealth, they can't avoid it.

[michel.imperi]

Another con ! The deficit for the last 2 years has increased by 160 billion plus the 16 billion which they are about to spend . How is the 2 billion which will be raised by increasing top tax rate to 45% going to help anything . Again Brown trying to divert attention , smoke and mirrors. That is what we should focus on .

[Peter Berrow]

The main comment should be wether the party will know back the 40 tax proposals or not as in reality 9 of them increased the tax take for the Government, 20 was tax neutral, while only 11 decreased the tax take of Government but 8 could be paid for from the tax increases leaving only 3 in question.
Reduction of Income tax by 2p(already done by this Government.
Increase in Personal allowance.
Cut in Corporation tax.
Any views from people wether these things should become Conservative policy know?

[Michael McGowan]

Predictably cretinous comments from resident leftie, whose vision of social justice is everyone levelled down to the same (low) level of income. A sizeable chunk of these mythical sums which Gordon is going to raise from the well-off will not materialise. VAT receipts from high earners will inevitably drop as people/businesses simply cut back their spending. That will also reduce income tax and national insurance receipts from other businesses. Expats and their employers are going to look even harder at the joys of coming to live in the UK where you pay 45% for a public transport system that doesn't work; a healthcare system which is an international laughing stock and often dangerous; and state schools which don't teach anything worth knowing. That's before we even get on to public debt levels which the foreign exchange markets know are well in excess of 100% of GDP and rising. The message to any international business considering UK investment is simple: "offshore".

[Scott]

@richardJ "All those earning over £150K should go on strike. Then we'll see just how much the government wants to tax them"
But then what will you do when throses earning under £150k do as good a job?

[John H Hutchinson]

The rich are fortunate in having their tax increased to 45%. My wife, a pensioner, has her income tax rated at 50%

[Jamie]

Wasn't the top rate of tax 60 per cent for nine years under Mrs Thatcher?

[Mapa]

i agree 45% is OK, though I agreed with Mrs T cutting it from the high of 80+ as it is in line roughly with Obama's pledge to tax 250K+ dollars earners, this is a progressive move.

But the Sad fact is out of the approx 30 Million working only 500k are earning over 150k pounds,

That's what's shocking! animal farm a copy someone.

[John H Hutchinson]

Michael McGowan | November 24, 2008 at 11:52 is not correct. Our public transport system does work. I use it all the time and manage well enough. I suspect that he writes from London or another big city where buses and trains will always have problems coping with heavy peak traffic. The health service is envied. I use it all the time and am here to type this. Several of my family owe their lives to the NHS. Not all of our schools are bad. I know several in different parts of the country that turn out well educated children with much potential and promise.

[Mark Fulford]

The relationship between taxes as a share of GDP and growth and productivity is statistically insignificant...

Resident leftie, if that's the case then why is Gordon about to offer borrowing-funded tax cuts to boost GDP, growth and productivity?

[Angelo Basu]

The economy is screwed. It is possible that even if public spending is reduced there would be a need to raise taxes at least in the short term. No-one wants to pay more tax, but if it has to happen, who should do so? The poor? Large Businesses which can change their tax domicile? Small businesses which can, er, go bust? The super-rich who can easily up sticks? If taxes are to rise, then it makes some sense to put the increases on non-mobile workers who earn good money and who would not be disincentivised by tax increases (is anyone really going to say, I won't bother taking up that training contract with PwC because I'll have to pay a lot of tax in 15 years time when they make me a Partner, much better to go and work for a local firm where there's no chance I'll ever earn £150k?).

The 45% announcement is weird on that basis.

It will raise a relatively small amount from a class which will be shrinking anyway (how many of those in the class are in financial services but not for much longer, or who get over the £150k threshold due to bonuses which will not materialise at that level for a few years?) and which will include at the upper end people who are able to move (partners in global law and accountancy firms which could transfer them to other offices).

The real impact of the change is to highlight the low level at which the "higher rate" tax kicks in. If there is to be a call on the taxpayers with greatest ability to pay, the more sensible approach surely would have been to have increased the higher rate to 45% AND raised the point at which the rate kicked in. While tax credits exist it seems bizarre that a significant proportion of people who can claim them are higher-rate tax payers.

I don't want tax rises, but the government we have now (which I don't want) has to take action consistent with its own policies to pay for the fiscal stimulus it is proposing. The 45% rate is on this basis so timid as to suggest that it is a Trojan horse - testing the electoral impact of Labour abandoning its policy of not redistributing from the wealthiest to see whether they can get away with a more thorough soaking. Or, being cynical/realistic, enabling them to say after the next election when in opposition that they would have raised higher rate taxation by less than the actual government will have to do in practice.

Yet again, a symptom of a morally bankrupt government working purely politically and without any real concern for taking effective action EVEN within the terms of what could be accepted from a left-wing party.

[Comstock]

I agree that 80% is too high, my preference would be 50%

[John H Hutchinson]

Looking back over the blog all I read is blame the government. The problems lie with the banks as it they who lent to the wrong people and who are now not lending to the right ones. Lay the blame where it is due. We have the current set of problems because of financial institutions. Only government (regardless of Party) can put it right. The cost will be hard to bear but would be easier if the banks, etc would let go of our money.

[Peter]

So what if they try and take another 5% from me!

I will double my efforts to ensure my company pays less corporation tax next october.

[Comstock]

"I will double my efforts to ensure my company pays less corporation tax next october"

It's that sort of attitude that keeps NHS waiting lists long and children in poverty

Well done, peter.

[resident leftie]

Posted by: Mark Fulford | November 24, 2008 at 12:06

The relationship between taxes as a share of GDP and growth and productivity is statistically insignificant...

Resident leftie, if that's the case then why is Gordon about to offer borrowing-funded tax cuts to boost GDP, growth and productivity?

The key words here are borrowing-funded.

[Comstock]

Who left the italics on?

Normally my trick!

[David_at_Home]

Our society is becoming increasingly splint into three broad categories (There is, of course, some overlap but, worryingly, not very much). These are :

“The Underclass”, who live for benefits and are either not interested in working for or who would lose their secure “benefits” if they took an insecure low skilled employment for little or no overall financial gain.

“Most of Us”, whose income is somewhere between £15K and £75K. We are the people who pay nearly all the taxes and who earn close to 100% of all the wealth of the nation.

“The Rich”, whose income is frequently several hundreds of thousands to several millions of pounds. A tinny minority of these people are genuine entrepreneurs who have founded new and thriving companies but most have manoeuvred themselves into positions of power in either the private or public sectors

Any sensible economic policy would tend to favour the middle group and not favour the groups at the bottom or the top.

The Underclass should be encouraged to get off their bottoms be a reduction in sate paid benefits coupled raising the tax threshold to at least £10,000 pa.

I see no reason, in principle, why the Rich should not be taxed at 45%, 50% or even 60% of their marginal income but the problem is they would find perfectly legal ways of escaping this (as they do now) by moving offshore, being paid in share options, starting family trusts etc. We could, at least, cut the numbers of the Rich by ensuring that no-one in the public sector is paid a salary which exceeds that of the Prime Minister. The only way to get the private sector rich to pay any real tax at all is to keep it reasonable.

Ideally we would have a high personal allowance, transferable between husband and wife to encourage marriage, reduced state benefits (or preferably no state benefits at all except for the chronically sick and recently unemployed) and a very simple flat tax (including NI) for all income higher than the personal allowance threshold. Tax relief on pension contributions favour the rich rather than the poor and so should be capped at, say, £6,000 pa.

[NigelC]

Quotes from this thread are being posted on BBC blog on PBR.

[Malcolm Dunn]

The only important question is will it work? I really do have my doubts about this.
Having said that I have strong doubts but any of the proposals made here or anywhere else in the world.Perhaps John Maples was right when he said the recession 'had to run its course' and the best that anyone government can do is mitigate the worst effects of it.

[Cleethorpes Rock]

Labour have announced this 45% tax rate so that lower and middle-earners stop worrying that they might be asked to pay for the borrowing bombshell.

The trouble is that even if this measure raises £4bn, that's still £8bn short of the £12bn cost of the VAT reduction. Who pays for the shortfall? EVERYONE.

I think this 45% rate may prove superficially popular. Of course it's wrong that the poorest pay more of their income than the richest and there's something appealing to hard-pressed voters about the wealthy "paying their fair share", but we also need to be honest about what works.

After all, who stands to gain the most from lower VAT, the man buying a Sunseeker for £1m (saving £25,000) or the minimum wage-earner buying his groceries (saving ZERO)? If Labour want to help the poorest, they'd reduce income tax for them by increasing thresholds so they see a benefit in their pay cheques immediately.

[Michael McGowan]

John Hutchinson, I can assure you that in London public transport is expensive and substandard. I work with London-based expats: few of them use the NHS because they are frightened of lethal infections in London hospitals, they cannot get NHS appointments promptly and they want access to the full range of drugs, not those which NICE decides they can have. They have no confidence in state schools. So much for the vast sums supposedly lavished on quality public services by Labour.

Comstock, hilarious to see you clinging to the fantasy that there is any clear correlation between tax receipts and frontline public services. The money is at last as likely to disappear into the pockets of politicians and their cronies.

[GB£.com]

ukipper d_a_h said:"I see no reason, in principle, why the Rich should not be taxed at 45%, 50% or even 60% of their marginal income"

Blimey Comrade David_at_Homeski!

I thought the whole point of % tax bands was that the more you earn, the more you pay in real money terms by definition. It is quite simple mathematics.

Which is why UKIP's (apparently your party) official policy is a flat tax one. Your redistribution views would seem more at home with Old Labour.

[resident leftie]

Posted by: Michael McGowan | November 24, 2008 at 13:00

Comstock, hilarious to see you clinging to the fantasy that there is any clear correlation between tax receipts and frontline public services. The money is at last as likely to disappear into the pockets of politicians and their cronies.

This is pretty bloody rich when the financial sector has been lining its pockets with massive bonuses financed by gambling with our money and completely unrelated to their productivity. This lie that increased public expenditure has not helped should be crushed. The NHS and in particular primary school education has been transformed by the extra cash.

[Michael McGowan]

The financial sector has been paying, until recently, vast quantities of income tax and national insurance for Brown's spending splurge on skoolsnospitals. True, they made many bad financial decisions but they were encouraged to do so by Subprime Minister Brown when he was Chancellor. The earnings/gold-plated pensions and dodgy expenses claims of politicians are totally unrelated to their productivity. In fact they are often inversely proportional to their productivity.

I really would like to be introduced to resident leftie's supplier of narcotics: only mind-altering substances of considerable strength could lead anyone of sound mind to conclude that the NHS and state education had been "transformed."

[David_at_Home]

If you read my entire comment, GB£, you will see that I favour a flat tax, not because the rich are deserving but because a moderate and simple tax system is probably the only way to encourage the very rich to pay any substantial tax at all. So I am in line with UKIP policy!

But I don’t think we should go out of the way to encourage rich dodgy people such as the Russian Oligarchs (Mafia?) to settle here and discourage the BBC from overpaying “celebrities” (such as you know who).

Also we could clip the wings of the overpaid on the public sector (see the excellent post by Susie Squire of the Taxpayer’s Alliance on Platform).

Finally I don’t see UKIP as a particularly economically right wing party nor would I wish it to become so. To get anywhere, electorally, we will have to appeal to those who have, with justifiable disgust, ceased to vote Labour. I think we should support the Welfare State as a safety net whilst pragmatically reducing the scope of the state.

[Stuart M]

I see the BBC are saying the 45% will raise "several billion".

Someone at head office really must challenge them on these blatant pro-socialist lies.

[David_at_Home]

" see the BBC are saying the 45% will raise "several billion".

In practice, the very rich will move offshore, take share options in lieu of salary, become Non Doms, set up family trusts etc and probably end up paying even less tax than before.

[NigelC]

I love Dizzy's label for Brown's , sorry, Darling's PBR
"Buy now. Pay later. Nothing to pay for the first year!"
Nobody is conned into thinking they are getting something for nothing in these deals, I hope

[Richard S]

This thread is very interesting but the essential point is that this country is broke. Tinkering with small tax cuts will only have a cosmetic effect. The Conservatives must takle the question of our bloated, unproductive public sector and cut public expenditure.
The amount paid to the EU might be a profitable place to start. If we stop subsidising French agriculture, everyone would be better off and might concentrate Sarkozy's mind.

[Bexie]

People are also conveniently forgetting to include that fraud that calls itself national "insurance" which is something agin to another 25% on top of the income tax and is Gordo's preferred method of looting the long suffering wage earner

[B.Garvie]

There are many, many Labour supporters out there earning millions. They will be none too happy about this move by Darling.

What a disasterous budget report from Darling?

They used to say the UK was drowning in debt. Now it will actually sink.

[NigelJ]

john Hutchinson: "The health service is envied. I use it all the time and am here to type this. Several of my family owe their lives to the NHS. "

Hilarious - envied by whom? the people of Zimbabwe perhaps? If you made this comment to anyone from continental Europe who has knowledge of our nationalised healthcare system they would probably need to be defibrillated from laughing so much. There are many dedicated NHS staff - they are not the same as the NHS - an antiquated socialist structure that delivers poor value for money. Just because good NHS staff saved your life does not mean the NHS is a wonder, it simply means it has competant staff. I am sure there were many dedicated and safe train drivers during the days of British rail, but thankfully we were not idiotic enough to treat BR as a holy cow!! the British public needs to grow up and realise that pumping masses of money into an out of date system only leads to systemic waste, and does not improve health outcomes

[The Bishop Swine]

"I think this is a major tactical mistake by Labour, which will hit floating aspirational voters in target seats."

I don't agree this tax increase targets those who's aspirations have paid off with dividends.
It’s a social tax raised by socialists, in so much as the target group can easily afford such a cut its moral and fair. What is immoral is the spending of unfounded tax cuts, to print money for such a cheap shot in the arm, is a sign of a desperate Government. We now have an administration trying to navigate a course between potentially fatal and self seeded mines. Any sustained run on the pound would lead to a very deep recession indeed. Its also possible that we could quickly encounter hyper deflation as the inevitable contraction took on all the momentum normally associated with an overheating economy. After all there is plenty of potential for mass hysterical and overreaction.
We need a steady hand on the Tiller, we have only a cabin boy and a mistrusted skipper and we are stuck with this pairing for a while. Do we want Labour to run the economy properly of course we do. Have Labour made any mistakes you bet they have and this meddling with unfunded and unwanted tax cuts is a great example of a very poor call indeed.

[Alan.Su]

When I was a telephone engineer (climbing telegraph poles for a living) on $50 a week Harold Wilson was in power. Future prospects were on a downward spiral and I needed a change of work to get out of it. As it happens my opportunity appeared in the shape of emmigration.
From my position 'outside looking in' I saw Britain slowly grow in stature and become a good place to live again.
I returned in time for Tony Blair to take over and seen my home country slowly (at first) descend again. We have now reached the point of a severe downward spiral again and I feel just like I did in 1975 - it is time to emigrate again.

People should wake up to the real world - the world does not owe you a living and neither do I unless you really are disabled or recently unemployed. The benefit system is supposed to be a safety net not a way of life

[Sean Fear]

This is pretty bloody rich when the financial sector has been lining its pockets with massive bonuses financed by gambling with our money and completely unrelated to their productivity. "

They were of course, encouraged to gamble by your hero, who relied on them to fund his reckless public spending increases.

"This lie that increased public expenditure has not helped should be crushed. The NHS and in particular primary school education has been transformed by the extra cash."

I presume that that comment is intended ironically.

[Sean Fear]

"No, income is redistributed by progressive governments. Most of this so-called "earned" wealth is not earned at all."

Well actually, it is earned, by hard work, a concept that is alien to the average socialist.

[Biodun]

Sean,
I think the problem is that you and resident leftie are using two different definitions of "earned".

When we use "earn" we mean "work for".
When socialists use "earn" they mean "deserve".

I am always saddened by those whose comments on economics and finance are based on a need to feel morally superior to others. Usually backed up by statistics that show things are "unequal" rather than "unfair".