So, taxes are raised slightly for high income earners and suddenly some people are up in arms. Here is Boris Johnson’s policy advisor Anthony Browne stupidly stating the obvious:
Short of introducing a London banker tax, this is as close a direct hit that the Chancellor could get on those who brought the country to its knees. It is overall an Old Labour redistributive budget, yanking up taxes on the rich to help the poor.
Yes, progressive taxes usually are redistributive and most people including economist Adam Smith were in favour. Boris Johnson himself turned up on TV later saying higher taxes would hit the ‘wealth creators’ who were the life-blood of the economy.
Let’s shoot this fallacy down right here. The bankers from London’s Sqare Mile, earning over £150,000 a year have actually been net wealth destroyers over the past decade. All the wealth created by the big banks here and in the US has been destroyed and much more – taking other industries down with them. These former Masters of the Universe were so rubbish at gauging risk and so good at flogging off bad debt that when the wobble came – confidence crashed everywhere.
Destruction so swift comes only when people know they are living in a house of cards. They knew the boom would not last because the models were dubious, and would not withstand a crisis of confidence.
Furthermore, these so-called Wealth Creators have been Wealth Re-distributors too: enriching themselves during the boom while playing around with other people’s money. But now that the economy has crashed and pension funds have lost money – do these Wealth Creators give any of their money back? Nope. They made their money while the going was good, now tax-payers have to pick up the pieces.
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Filed in: Economics,London Politics