Every time I hear someone say “nobody likes paying taxes”, I want to shout: I do! My taxes pay for a civilised society, for schools and roads we all need, and for support to those who face hard times. Tax dodgers aren’t just depriving the public purse, they are also shirking their moral duty.
Tag: <span>Fiscal policy</span>
In all the fuss about Natalie Bennett’s unfortunate media interviews, for which she has penned this very strong and courageous apology, we have seen this idea talking hold that governments can cost policies down to the last penny. The Green Party always puts forward broadly costed proposals, but the direction of travel is equally important and needs more attention.
The Chancellor has announced a cut in stamp duty for most people in yesterday’s autumn statement, claiming it will help first-time buyers. Labour’s shadow chancellor quickly supported him, adding that it will “help people on middle and low incomes who are moving homes”. Given the extremely high prices in London, you sounds like great news! But it could actually make things worse. Let me explain with an example from Anerley. Imagine you were a rich enough first-time buyer to go for the average two bed flat in SE20, which according to Nestoria costs £329,000! You’ll now have to pay just over £3,000 less in stamp duty to buy it, which will be welcome news. But this means you, and every other buyer, now has £3,000 more to bid on the price for the home. The Government’s own economists – the Office for Budget Responsibility – say this will push up house prices. Using Shelter’s…
Aled Dilwyn Fisher and Adam Ramsay have kicked off another little debate about the recent past and possible future of “the left”, following a total failure to seize the much-vaunted opportunity created by the massive financial crisis in 2008. Why did anyone except the hard left – not known for their astute political realism – believe that we were likely to see a reshaping of international capitalism in 2008? Governments regulating and administering the major economic powers and their possible successors approaching national elections almost all lined up behind what Aled succinctly calls “deficit fetishism”. Even Obama’s green-tinged stimulus is undermined by States doing the exact opposite. Adam is interested in narratives about greedy bankers and corrupt politicians, governments running out of money and youth unemployment spirally. Me too, but his writing verges on a pointless delusion – that “we”, a small rabble of bloggers and activists on the fringes…
I came across a shocking statistic today: environmental taxes are decreasing in the UK! The total revenue has risen slower than inflation between 1999 and 2008; from around £32.6bn in 1999 to £38.5bn in 2008. If it had grown with inflation over that period it would have stood at £41.4bn in 2008. As a percentage of GDP over that period it fell from 3.5% to 2.7%. As a percentage of the total taxes and social contributions in the UK, it has also fallen behind. In 99 it peaked at 9.7% of total tax revenue, then fell to 7.2% in 2008. Environmental taxes made up a lower share of our economy and tax revenue than at any time since 1993, when the ONS records begin. So much for shifting the tax burden from income to environmental damage!
You don’t often see national newspapers celebrating a drop in house prices, despite the fact that they rose twice as fast as average incomes in the past decade. It’s much like the coverage of any strike that might affect a journalist’s holidays plans. Most journalists and commentators are wealthy middle class home owners, so they are heavily invested in maintaining this trend of above-income-inflation house price rises. There are two main reasons for this trend: first, house building supply never came close to meeting demand; second, cheap credit created a bubble that massively over-inflated the value of homes. Here in London, households with incomes up to an incredible £74,000 are soon to become eligible for “affordable housing”, which you can buy up bit by bit. Us paupers on a mere £74k are no longer able to buy a home otherwise. In the past year this trend has very slightly eased,…
A discussion with two friends on the back of my post about the cuts agenda brought up some interesting figures about benefit and tax fraud. There’s nothing the Tories and right-wing media pundits like more than a good old attack on benefit fraud. Lazy good-for-nothings scamming our taxes! Get ’em! But how big a problem is benefit fraud, and how does it compare to the rich ripping us off with offshore tax havens and the like? Benefit fraud in 07-08 cost us around £800m out of a budget totalling £125bn. Tax evasio by the rich cost us around £18.5bn and a tax avoidance is estimated at around £100bn compared to a government budget totalling £589bn. Tax evasion is harder to tackle, involving international negotiations, but it says a lot about your priorities. Tory plans to bail out a few thousand rich families through inheritance tax changes would cost considerably more…
As long as the Democrats talked within Republican frames like “tax relief”, they always lost the argument. So why are Labour taking on Tory economic narratives during their party season? They’re handing the election to Cameron on a plate. The first narrative is that we need to cut public expenditure to save the deficit and curb the national debt. Except that our national debt is much lower than most developed economies, and is projected to stay that way. Our deficit is large, but Cameron’s criticism of any fiscal stimulus would only have landed us in a bigger hole with more unemployment and smaller tax receipts; perhaps even a depression. The second is that the public sector is an unproductive drag on the economy, and should be the focus of cuts. Except that the public sector injects stable spending power into the economy; provides the infrastructure and services that business can’t…