Clegg’s phantom ‘tycoon tax’…..
March, I have been told, is a time for infamous ‘March winds’. If that is indeed the case then you cant help but think the enormous amount of hot air that is generated by the Liberal Democrat Spring Conference is a huge contributing factor to this seasonal phenomena. Having said that, I do have a paen of sympathy for those redoubtable Lib Dem activists who are about to vote to drop the NHS Reform Bill knowing full well they will be blatantly ignored by their Parliamentary Party whatever the outcome of the actual vote – welcome to our world.
If however, you stuck a wind turbine next to conference hall on the same day Nick Clegg was speaking you could solve Britain’s pending energy generation problems pretty much at a stroke. Leaving aside the Mansion Tax, which I dealt with yesterday, I was genuinely puzzled by his proposal for a ‘tycoon tax’ – a tax which doesn’t seem to be an actual tax at all but more a vague collection of good things to do;
There are hundreds of people earning millions per year who are barely paying 20% tax – forget 40%, forget 50%, forget 30%,” he said. “They are not even paying 20%. Therefore I think it’s time that we look at what I call a tycoon tax.
If you’re earning millions per year, if you’re able to pay an army of lawyers and accountants to basically pick and choose what tax you are paying, if you are paying as low as 25%, 20% or even less in tax, there should be a minimum fair share that you should pay to society.
So, in conclusion, not an actual tax at all then Nick? What is even more offensive about this slight-of-hand that Clegg is perfectly willing to axe an actually existing tax, the 50p band, in favour for his warmed over motherhood and apple pie. The Liberal Democrats do not have good or indeed even vaguely progressive ideas about taxation. They have bad, regressive idea, which they dress in threadbare rhetorical ‘fairness.
Take the raising of the income tax threshold which many even within Labour see as a ‘good idea’. It’s probably worth noting that the Conservative Party love this idea as well and here is why:
a report by the economic thinktank the Institute for Fiscal Studies (IFS) said better-off families would benefit most from a rise in income tax allowances
In fact, I would expect if a serious study was conducted into the actual fiscal effects of the Liberal Democrats position on tax, it would in short-order find that rather than tackling inequality in our taxation system; their changes hard-wire it into that system and our society. The notion that the way to redistribute social wealth is through the taxation system is deeply and fundamentally flawed. No short-cuts exist to tackle social inequality which bypass a proper prices and incomes policy. In fact, it will only end in a rapid increase in social inequality not least because state-provided services, which the poor depend on vastly more than the rich, suffer the cutbacks caused by further constriction of the states main revenue stream.
It’s easy to be seduced by the comforting rhetorical deference to concepts such as fairness and ‘paying a fair share’ but nobody should be under any illusions – that is not what Nick Clegg intends. Rather, he intends to further the Conservatives ideological assault on what little the 99% have left after the crash, but do this on the sly. Labour must be aware of this and not to rush to accept which look like they reflect our values in theory but in practice actually don’t.