The present versus the future


by Rumbold
10th May, 2010 at 9:36 pm    

The last few days have seen plenty of debates over political coalitions and the real or imagined splits between the parties, whether it be on taxes, spending, law and so on. Yet perhaps the most important debate is emerging across party lines, without people even realising. This debate concerns Britain’s future. Not in the empty way that ‘Britain’s future’ is usually discussed, but rather the need to make sacrifices now in order to make the future better for ourselves, and the divide between this and policies which preserve the luxury of the present at the cost of the future. The split isn’t a simple one. Most people advocate some measures that will help Britain in the future, while at the same time advocating measures that will harm it. These are not painless choices which everyone can agree upon, and some people will lose out in the short run, which is why they haven’t been implemented. But the alternative is long-term ruin.

There are numerous policies that fall into the above categories. The need to tackle climate change is held back by people unwilling to pay higher prices for energy, change their habits, and fund research into renewable sources. Many people are happy to talk about fighting climate change in theoretical terms, but once they need to reform their own behaviour, their ardour cools. Climate change needs to be managed, but it won’t be so long as it requires people to make sacrifices.

In a similar vein, consumerism continues to ravage the country. People think nothing of spending £100+ on a night out, and our saving habits as a nation are shocking. The consumer binge, already curbed by the credit crunch, is likely to suffer further as prices rise as a percentage of income thanks to the growing standards of living in India and China. A good way to tame this would be to raise VAT (and cut taxes like National Insurance), but this would involve some pain in the present for people, so few advocate it.

Keeping Britain competitive is another issue, especially with the rise of India, China et al (though they are less of a threat and more of an opportunity than most people think). Everyone talks about it, but, yet again, when hard choices need to be made, the pleasant present triumphs over the uncertain future: over-regulation, a benefits system that (mostly) disincentives work and high taxes might be acceptable now, but increasingly businesses aren’t going to want to employ people in Britain. Despite this, some people attacked the Conservatives and Liberal Democrats for opposing the rise in National Insurance. As with climate change, this represented the coalition of the present against the future. Interest on the national debt now consumes more money than the defence budget, and still people argue against cuts in public sector jobs (the only real way to save money), because it is something that hurts the present to heal the future.

Greece seemingly provided a example of an unreformed Britain in the future: a country stricken by financial chaos; savage spending cuts required; a pension system close to collapse thanks to its unsustainable nature. Every generation in Britain has enjoyed rising living standards in the post-war period. Yet without enduring some sacrifice now, whether that be using less energy or spending less on clothes, Britain will suffer greatly in the future.


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  1. Gareth Davies

    a spot of sanity from @pickledpolitics on the real choices to be faced by the next government http://www.pickledpolitics.com/archives/8612


  2. sunny hundal

    Blog post:: The present verses the future http://bit.ly/9IxIYs




  1. cjcjc — on 10th May, 2010 at 10:10 pm  

    Public sector jobs probably should be cut but money could be saved less painfully by cutting public sector pay instead of jobs.

    I don’t understand your consumer point.
    Spending will be curbed by higher prices so we should raise them further via VAT?

  2. MaidMarian — on 10th May, 2010 at 10:50 pm  

    By ‘the consumer binge’ I am not altogether sure whether you are projecting your moral angst on everyone else (who the bloody hell are you to tell people how to spend their money Mr Libertarian?) or are avoiding the real issue.

    You normally have sense, so I guess the latter. Why not mention the property market? That is where the root cause is to my mind. Why is it somehow better in your view to price two generations out of property than have a night out?

    Now if you will excuse me, I need to tune my new flat screen in.

  3. soru — on 10th May, 2010 at 11:16 pm  

    The key issue with Greece is that the rich pretty much pay zero tax, and much of the middle class copies them.

    http://www.bloomberg.com/apps/news?pid=20601109&sid=apSz28ifLL9U
    Greece’s revenue from income tax was 4.7 percent of GDP in 2007, compared with an EU average of 8 percent, EU statistics show. Tax revenue fell by 2.5 percentage points of GDP between 2000 and 2007 to a euro region-low of 32 percent even as economic growth averaged 4.1 percent a year.

    An investigation in the central Athens neighborhood of Kolonaki, where shoppers can buy Manolo Blahnik shoes and find the city’s only Prada store, showed more than half of doctors declared less than 30,000 euros in annual income

    The tax evaders feel justified in doing so because the public services are crap, and largely run for the convenience of those employed by them.

    What is needed, here and there, is to get things right now, in a way that will makes things better in the future.

    Not break things now, in a way that will make things worse in the future.

  4. KJB — on 10th May, 2010 at 11:38 pm  

    ‘Versus’! Not ‘verses’! (Sorry, pedant angst).

    I think I get part of what you’re saying here, but as MM says, you totally get it wrong elsewhere. I mean, have you not read the bit in the issue-before-last of Private Eye on the hypocrisy of many of the businessmen opposing the NI rise?

    The cost of housing – and the cost of living – are two issues that you don’t address. People have admitted to going on benefits because often the sort of jobs available to them actually leave them with less to live on than benefits – you should certainly read this if you haven’t already.

    The stuff about high taxes sounds highly dubious to me too – it is no secret that we have long turned a blind eye to all the tax-efficient arrangements of various bankers and businessmen (carefully chronicled in Private Eye as well as elsewhere), but the benefits that these people really bring to the nation are debatable. What about the behaviour of Diageo, for example, deciding to cut many jobs at its Johnnie Walker factory despite its £2m profit last year?

    I think it is in poor taste not to attack these people who could help the country with its debt if they weren’t such greedy fucks. If the poorest in this country have no choice but to pay up, why do we insist on being so mild to the richest? Sometimes I wonder if we don’t admire them for their sheer, heartless gall in being able to hire accountants and lawyers to realise their selfishness. They are also the ones who set the standard of living for everyone else to aspire to, and thus fuel the consumerism you (quite rightly) criticise.

    Greece seemingly provided a example of an unreformed Britain in the future: a country stricken by financial chaos; savage spending cuts required; a pension system close to collapse thanks to its unsustainable nature.

    I really don’t know about this – although there may end up being a terrifyingly ironic similarity, judging by soru’s link above. British people seem much more small c conservative than the Greeks.

    I think maybe you should’ve disentangled the climate change issue and written on it separately. The ramifications of that are more serious than ‘long-term ruin,’ but scientists are increasingly losing hope of anything being done about it in the face of the kind of attitudes you so aptly describe here. I agree with James Lovelock: ‘I don’t think we’re yet evolved to the point where we’re clever enough to handle a complex a situation as climate change.’

  5. douglas clark — on 10th May, 2010 at 11:49 pm  

    Rumbold,

    Good piece.

    It seems to me that human beings have fairly short attention spans, and some of those with longer ones attend to issues that are irrelevant, stupid or downright wrong.

    Soru @ 3 is right in a way….

    The point is that Greece is actually a tax haven, and/or a country run on the worst version of tax avoidance that you could imagine.

    There ought to be a fundamental rethink about the cozy relationship between tax evasion and tax avoidance. Neither meet a moral criteria.

    I’d like to know what benefit there has been to the Exchequer by allowing billionaires into this country?

    Anyone else against immigration by billionaires?

  6. douglas clark — on 11th May, 2010 at 12:07 am  

    KJB @ 4,

    R̩ the climate change issue. I was almost gobsmacked that Rumbold appeared to have agreed with the scientific consensus and not the usual libertarian idiots. Chis Рthe brain dead, Mounsey, the Eton eaten maniac Рcomes to mind.

    It is a matter of whether we are intelligent, or whether we cling to the propoganda of the stupid.

    However, as you might suspect, I’d like my friend Rumbold to be quite specific about this issue.

    So.

    Rumbold.

    Do you believe that AGW might wipe us out or not?

    Libertarians included.

  7. douglas clark — on 11th May, 2010 at 12:58 am  

    On the subject of the Libertarians, how many PPC’s did they stand, and how many votes did they get? Perhaps by constituency?

    I’d like an answer from Chris, rabbit in the headlights, Mounsey.

    Or a reflection on the fact that he has a long way to go to have a political philosophy that actually works. There are attractive things about Libertarianism, and there are deeply unattractive undercurrents.

    Separating them may be a Herculean task, and frankly completely beyond Mr Mounssey or any of his current accolites.

    So, I think Rumbold and I should negotiate, preferably in a smoke filled room, for some sort of sensible version of libertarianism, that accounts for personal liberty and doesn’t account for denial of science or society, or sense.

    And has, at least, some basis in reality.

    The right of the individual, rather than the state, and the commodification of the individual as a unit of the state, has been, in my opinion, the result of the complete apathy of people to see themselves as people, with rights as well as responsibilities.

    To that limited extent, libertarians are right, we surrender rights as though they weren’t bought by blood and bone. And they were.

    Turning that around is a reasonable objective for libertarians.

    The rest of it is, obviously, shit…..

    Oops, completely, or a tad, off topic.

    Sorry.

  8. douglas clark — on 11th May, 2010 at 1:09 am  

    On the subject of the Libertarians, how many PPC’s did they stand, and how many votes did they get? Perhaps by constituency?

    I’d like an answer from Chris, rabbit in the headlights, Mounsey.

    Or a reflection on the fact that he has a long way to go to have a political philosophy that actually stands up. There are attractive things about Libertarianism, and there are deeply unattractive undercurrents. Which oor Chris has been an advocate of, particularily assuming that the right to be brutal in your language required you to be brutal in your language.

    Or downright lying about the relationship between truth and believability on climate change. It was, perhaps, a step too far when Chris Mounsey said that the IPCC agreed with him.

    Ho, well.

    Separating the good from the bad about libertarianism may be a Herculean task, and frankly completely beyond Mr Mounssey or any of his current accolytes.

    So, I think Rumbold and I should negotiate, preferably in a smoke filled room, for some sort of sensible version of libertarianism, that accounts for personal liberty and doesn’t account for denial of science or society, or sense.

    And has, at least, some basis in reality.

    I think Rumbold is capable of that. I think that the fact he cares, and Mounsey sneers, is a difference worth recognising. And yet, they claim to have the same agenda.

    I don’t think they do.

    _________________________________

    The right of the individual, rather than the state, and the commodification of the individual as a unit of the state, has been, in my opinion, the result of the complete apathy of people to see themselves as people, with rights as well as responsibilities.

    To that limited extent, libertarians are right, we surrender rights as though they weren’t bought by blood and bone. And they were.

    Turning that around is a reasonable objective for libertarians.

    The rest of it is, obviously, shit…..

    Oops, completely, or a tad, off topic.

    Sorry.

  9. douglas clark — on 11th May, 2010 at 1:17 am  

    Oops!

    Double post. The post at 8 is the one I’d like to stand by, not 7. If there are any moderators out there?

  10. Kismet Hardy — on 11th May, 2010 at 2:37 am  

    Is the elections over? Were the votes rigged? Did Ant and Dec present it? Did Nick Clegg sing a duet with Susan Boyle? Did David Cameron prove his dad was bigger than Gordon Brown’s dad? Which one between Simon Cowell and Rupert Murdoch was the giver and which one took it up the arse? Do we have a black president now?

  11. Naadir Jeewa — on 11th May, 2010 at 2:46 am  

    @10 – All of the above.

    During the economic policy session at the LSE election night coverage, they pretty much said that public sector pay is what is going to be used to reduce the deficit.

    Also, comparisons with Greece don’t fully hold up for reasons I’ve mentioned before, here or somewhere else I can’t quite remember.

    1. The economy is going to grow, modestly but surely. This will automatically reduce the deficit.

    2. Job cuts this year threaten economic growth by reducing overall spending through the multiplier effect.

    3. Greece has a large shadow economy rooted in corruption. Britain doesn’t.

  12. Cauldron — on 11th May, 2010 at 6:06 am  

    Interesting piece.

    The elephant in the living room: inter-generational theft. No party has any incentive to call out the current generation of voters for their excesses. Oldies vote, the unborn don’t.

    Did any politician say that Briton’s obsession with house prices is a major cause of the bust? Somehow reckless lenders and sloppy regulators were to blame; heaven forbid we point the finger at the BTL crowd living beyond their means.

    To my knowledge, no senior politician (maybe Cable, before he scented power) pointed out that the public was kidding itself if it thought that there would be any room for tax cuts or ringfencing spending. The numbers just don’t add up: fixing tax loopholes and closing quangos just isn’t going to close the gap.

    It’s hard to think of many democracies in modern times that have chosen to sacrifice current consumption in favour of future growth. Maybe Ireland and Norway.

    Can’t see the UK making hard choices. Easier to go down the slow-decline path of Japan, Italy and (for the historically-minded) Argentina.

  13. Rumbold — on 11th May, 2010 at 8:31 am  

    MaidMarian:

    Yes, the property market has played a big part in fuelling the boom. I don’t have a problem with how people spend their money, rather a culutre and policies that contributes to massively discouraging savers, and a failure of politicians to shift taxes from capital/labour onto consumption.

    KJB:

    People have admitted to going on benefits because often the sort of jobs available to them actually leave them with less to live on than benefits..

    That’s what I said. Benefits are too high, because they disincentivise work. I think you have misunderstood most of the piece, as the long term problem rather a high-tax, execessive legislation culture which discourages investment in this country.

    I have no doubt that businesses opposing the rise in NI were self-interested- they are the ones paying after all. It doesn’t mean they are wrong. Higher taxes drive businesses away, which mean less jobs and less tax revenue to pay for everyone’s welfare state.

  14. Rumbold — on 11th May, 2010 at 8:37 am  

    Good points Cauldron.

    Douglas:

    Thank you. Yes, I do agree that AGW is a threat. How much I am not sure, and nor is anyone else, but I think it needs to be tackled because of the potential consequences.

  15. Rumbold — on 11th May, 2010 at 8:58 am  

    Oops:

    as the long term problem rather a high-tax, execessive legislation culture

    That should read the long term problem is the high-tax, excessive legislation culture.

  16. Sarah AB — on 11th May, 2010 at 9:01 am  

    Rumbold – I haven’t been reading this blog long and have only recently realized that you are a libertarian. In an idle moment (one of many) I took a quiz on a libertarian website

    http://lpuk.org/

    and discovered that I was a measly 50% libertarian. Even without taking the quiz I’d instinctively have agreed with Douglas’ conclusion – that there are some attractive aspects to libertarianism but also some (to my mind) more dubious ones. There seem to be many different kinds of libertarians – American style more right wing types, those LM people at Spiked, the blogger Old Holborn, many of whose views seem quite close to the BNP at first glance.

    As I often agree with your posts I’d be very interested in a post explaining why you are a libertarian – and what kind of libertarian you are!

  17. Naadir Jeewa — on 11th May, 2010 at 9:24 am  

    @16

    Yeah, my major complaint is at the “libertarianism in one country” ideologues. And the Ayn “the-native-Americans-deserved-it” Rand followers.

    People like Tyler Cowen or Will Wilkinson, are the kind of libertarians you can have a pint with. And Rumbold too.

  18. Rumbold — on 11th May, 2010 at 9:37 am  

    Thanks Sarah and Naaidr. My belief in libertarianism is down to my view that in general people make better choices for themselves than the state, and that the state should not ban activities unless they harm other people. My libertarianism is different from most libertarians’ views because I see more of a need for a state to protect the weakest in society. Devil’s Kitchen once made a distinction between positive and negative libertarians. Negative libertarians tend to focus on things like the right to bear arms, and focus on their own rights, while positive libertarians talk more about how freedom benefits society. I don’t like Ayn Rand or Old Holborn.

  19. Sarah AB — on 11th May, 2010 at 9:43 am  

    Naadir – I agree about Ayn Rand – just read one of her novels, Anthem, which was a variation on the ‘individualist escapes from dystopia where dull uniformity is prescribed’ theme – but much less appealing than most of that genre – the hero was incredibly strong and good looking and the whole thing seemed off puttingly Nietzschean. The emphasis on individualism became unattractive – it was as though the solution to the dreary communist style society was to live in a kind of survivalist compound.

  20. Naadir Jeewa — on 11th May, 2010 at 9:48 am  

    I think Tyler Cowen once summed it up quite well. His issue with minimum-state market fundamentalists is that they miss the point of libertarianism – which is to maximize liberty. Once seen in these terms, then liberty necessarily entails “big government” in terms of public goods provision*. Since climate change has a medium probability of a massive negative impact, then strong government-led action is justified in order to prevent a large loss in liberty.

    * Cass Sunstein wrote a book that tried to quantify the benefits to liberty of state-provided goods.

  21. MaidMarian — on 11th May, 2010 at 10:01 am  

    Rumbold (13) – Thank you for your reply, we seem to agree. The problem is that that is not what you said in the article.

    You say that you don’t have a problem with how people spend their money – what was that binge moralising in the article then?

    Shifting taxes is a more interesting idea, but buying into the neo-puritan morality of eco crowd is quite another.

  22. Sarah AB — on 11th May, 2010 at 10:41 am  

    Thanks for your response Rumbold – which I missed earlier – your brand of libertarianism seems more benign than most!

  23. KJB — on 11th May, 2010 at 12:07 pm  

    I have no doubt that businesses opposing the rise in NI were self-interested- they are the ones paying after all.

    No, it wasn’t just about them being ‘self-interested,’ but about them being hypocrites and pretending to support Cameron in the name of patriotism: see all the ‘jobs tax’ whinging. If they won’t pay tax fully through other means, why shouldn’t they be forced to contribute to reducing the deficit in that way?

    That’s what I said. Benefits are too high, because they disincentivise work.

    That doesn’t sound like what I said. Instead of cutting benefits, it would be wiser to somehow make the cost of living cheaper, or wages fairer, so we don’t have such a problem with benefits. I don’t see how people having to be on benefits and then work to top it up is a case of benefits being ‘too high.’ Perhaps you didn’t mean to, but that all reeks of the Victorian notion of the deserving VS. the undeserving poor, and anyone who’s read Jack London will know that that distinction is highly artificial and arbitrary.

    Higher taxes drive businesses away, which mean less jobs and less tax revenue to pay for everyone’s welfare state.

    Yes, but as I said above, we’re not getting much of the taxes anyway! Most businesses and bankers that can go offshore, so what exactly should we do? Become a tax haven? Even then that wouldn’t solve the problem of businesses outsourcing when they want work to be as cheap as possible. I agree that sometimes people in this country lose out because they see themselves as too good for certain jobs, but in other cases, it’s not that simple. The backlash then inevitably comes against the workers themselves – Eastern Europeans, non-whites, etc. – rather than the employers who have turned their back on working-class people here.

    Sarah AB – Yes, what you described is as I understand it the plot of pretty much every Ayn Rand novel. I looked her up once in a brief bid to understand why the fuck US libertarians love her so much, and came away quite appalled and amused. Classics? I think NOT. Give me Alan Sillitoe anyday! And Rumbold is the cuddliest libertarian I’ve ever met. :-D

  24. Sarah AB — on 11th May, 2010 at 12:18 pm  

    KJB – re Rumbold’s ‘benefits are too high because they disincentivise work’ – this was a response to the fair point that some people avoid work because they are scarcely, if at all, better off than they would be on benefits. I think some system based on a ‘citizen’s income’ would get round this problem. You could make it tough or generous, more or less progressive, but one constant benefit (as I understand it) would be that it would reincentivise work. I should add that my knowledge of/interest in this idea is very casual.

    http://en.wikipedia.org/wiki/Guaranteed_minimum_income

  25. cjcjc — on 11th May, 2010 at 1:41 pm  

    Erm, businesses don’t pay tax.
    Only people can pay tax.

    Those people will be a mix of employees (fewer jobs and/or lower wages), customers (higher prices) and owners (lower profits).

    It won’t just be the owners.

  26. On that point — on 11th May, 2010 at 6:33 pm  

    I think it is definitely a positive thing that so mcuh debate about the future of our country has opened up. Whatever the result of these long negotiations is, we will ultimately have a new generation in power. This doesn’t happen that often in history, and it will be interesting to see what direction that this generation takes us in. We’ve had Baby-Boomers running the show in politics for the last 13 years, but now Generation Jones (the new media-popular generation between the Boomers and Gen X) is taking over. The new PM is likely to be a Joneser as well: either Cameron or eventually a GenJones Labourite like David Miliband or Ed Balls. Here’s an interesting article in last week’s Independent about this transition to Generation Jones: http://www.independent.co.uk/opinion/commentators/jonathan-pontell-cleggs-rise-is-the-sound-of-generation-jones-clearing-its-throat-1961191.html

  27. Morgoth — on 11th May, 2010 at 7:46 pm  

    Thanks Sunny. We couldn’t have done it without you and the Guardian.

    Hahahahahahahahahahahaha.

    Sleep well!

  28. KJB — on 11th May, 2010 at 11:35 pm  

    cjcjc – What exactly does that have to do with my central point? It looks curiously like a case of grasping at straws to draw attention away from what I’m saying. Go read p. 6 of issue 1260 of Private Eye – I’m not going to copy it out for you.

    Sarah AB – Yes, that idea (which appears to be the ‘Citizen’s Basic Income’ advocated by the less deranged bloggertarians, such as our Rumbold) is one I have absolutely 0 problem with.

    No-one should take my comments as an attack on Rumbold – this post is based partly on some discussions we’ve had, which is why I am engaging quite critically with him.

  29. douglas clark — on 12th May, 2010 at 12:17 am  

    KJB,

    Rumbold is a fair and honest opponent. I have engaged with him over the years and frankly, whilst we come from different backgrounds and different politics we have more in common than we have apart. On practical issues you will rarely find a fig leaf between us. We are offended as people by very much the same things. I think that is the point he was making in his OP.

    I say, ‘I agree with Rumbold’ much as Cameron and Brown agreed with Clegg. Except I don’t retract from that – he is often right.

    He is a decent human being before he is anything else.

    We should all think about that.

    Of course his politics are idiotic ;-)

  30. Rumbold — on 12th May, 2010 at 8:46 am  

    MaidMarian:

    As a libertarian I can dislike or criticise people’s behaviour without wanting it to be banned. I want to see higher VAT because I think we need to rebalance taxes away from the most mobile and productive parts of our economy to the least, which is why I don’t support the Conservatives raising the inheritance tax-threshold. Much more sensible is the Lib Dems plans to raise the income tax threshold.

    KJB:

    National Insurance is perhaps the most damaging of all the taxes, as it discourages the hiring of new workers by making them more expensive. This leads to higher unemployment. At the same time, it discourages workers from taking up roles, and staying on benefits instead.

    SarahAB:

    I do like the idea of a citizens’ basic income. It would give people more responsibility, because at the moment a lot of benefits are paid by the state without it reaching the person (e.g. housing benefit), so people can’t waste the money. Of course some people would spend all their money and wouldn’t have enough for housing, but the system would need to be resistant to that by not bailing them out (it sounds harsh, but the alternative is to give them more money).

    Douglas:

    How did the SNP do?

  31. MaidMarian — on 12th May, 2010 at 10:07 am  

    Rumbold – Well, hold on a minute. At the start of this we needed higher VAT to reign in those evil consumers and their consumerism because the dogma of the environmentalist movement has to be crowbarred in.

    A real libertarian would surely make the point that VAT should be abolished. VAT is the most unequal tax of all. Why should anyone earning a low wage pay the same tax for ANY commodity bought as compared to the rich? Your VAT increase is, arguably a subsidy for the rich, seemingly because you don’t like people further down the food chain consuming.

    This is not to mention that the VAT cut to 15% was actually quite useful for businesses not registered for VAT.

    I would prefer to start by imposing very large council tax increases on second homes and increasing stamp duty for those who already own another property. Houses tend not to get up and move to a tax haven. And before anyone says it, yes, pensioners in their mansions can pay too.

    Lib Dem plans for income tax neither excite me not make me unhappy.

    You are correct about the inheritance tax threshold though – a terrible idea that came about solely to pander to the right wing press in a desperate attempt to stop the election we should have had in 2007.

  32. Rumbold — on 12th May, 2010 at 10:47 am  

    VAT is a tax on consumption. Yes, it is not progressive, but by shifting the burden away from low-earners (by raising tax thresholds for N.I. and income tax), you encourage saving. If people who spend a lot of their income on goods pay more in tax I don’t have a problem with that. A permanent rise, to say, 20-25% wouldn’t be disatarous for most, especially as things like food are exempt. And if we withdrew from the EU our food bills would go down anyway.

    There is an argument for shifting more of the tax burden onto property too. Basically I want a system where the most mobile and productive elements are lightly taxed, as they are the keys to a functioning economy, and a citizens’ income would help the poorest while entrenching personal responsibility.

  33. MaidMarian — on 12th May, 2010 at 11:17 am  

    Rumbold – Personally speaking, I am a big fan of the Land Value Tax, though I accept that it would never fly with the voters.

    A better way, incidentally would be to take advantage of the current situation in Greece and abolish the EU subsidy network. There is no reason for European intervention in agriculture. For far too long the farmers have taken the tax-payer for a ride (and it is a similar situation in the US for that matter, George Bush’s Farm Bill was even worse than the EU). If we withdrew from the EU the landed elements of the Conservative-Lib Dems would scream about subsidies.

    Perhaps put this another way, these, ‘mobile and productive elements,’ that should be very lightly taxed, what are these things you have in mind?

  34. ~AF — on 12th May, 2010 at 3:12 pm  

    Can I just point out that the word wanted is “versus”, not as the OP has it “verses”.

    Whoops.

  35. Rumbold — on 12th May, 2010 at 9:02 pm  

    MaidMarian:

    Labour and capital should be lightly taxed. I would be in favour of abolishing all EU subsidies, and if this was not possible, then withdrawing from the union.

  36. soru — on 13th May, 2010 at 12:00 am  

    Much more sensible is the Lib Dems plans to raise the income tax threshold.

    That’s actually a really really bad idea. Normalising the situation of not paying tax is the shortest road to a situation like that of Greece, or those third world countries in even worse situations.

    Setting up the ability for the well off to live off savings, or inherited property, without declaring any income over the threshold is going to, like Greece, end up splitting the country up into tax-paying and non-paying classes (or perhaps ‘working’ and ‘knows an accountant’). A lot of high-productivity middle class professionals will end up retiring early when they inherit their parents house. Others will fiddle things so they look like they are doing that.

    The rest of us will be sullenly splitting the bill for worse public services between fewer people on lower average salary. Even without the deficit, reducing the tax base by a third or more will be almost impossible to make up by anything but fundamental, game-changing cuts.

    I don’t think that is accidental, an unintended consequence of a well-meaning idea. It’s just too perfect a match for deliberate class war politics: serve the narrow self-interests of some specific constituency while arguing you are just following the universal laws of economics…

  37. Rumbold — on 13th May, 2010 at 8:35 am  

    Soru:

    Normalising the situation of not paying tax is the shortest road to a situation like that of Greece, or those third world countries in even worse situations.

    Not really. The £10,000 threshold would still leave 90%+ of full time workers paying tax as well as N.I. The cost is estminated at £17 billion, which only equates to around 3% of spending. Raising the threshold should also be done in conjunction with cuts in benefits (particularly housing), to balance it out.

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