The moral case for tax cuts
The problem is that nobody knows what they are talking about. The more platitudinous waffle that is talked by politicians, the more they are perceived to be divorced from the real world. A tax cut is simple to understand, and even talk of ‘tax relief’ would be welcomed by the masses, but an insistence that ‘economic stability’ is primary, and the policy is to ‘share the proceeds of growth’ is the language of political anoraks. Philip Hammond MP, the shadow Chief Secretary to the Treasury, insists that tax cuts could come in the longer term under a Conservative government. But the tense is unattractive, and constitutes an assurance of nothing. Going to the polls with manifesto pledges of coulds and mights and maybes will simply lead voters to stick to the devil they know.
The Conservative Party appears to have been persuaded that high levels of taxation, high public spending, or high levels of borrowing lead somehow to a more just and compassionate society. This is the mantra of New Labour which has permeated the age and infected almost all sections of the media. But it is a lie.
There are sound economic arguments against high taxation, and Baroness Thatcher lived and breathed the philosophy. High taxes lead to a ‘brain drain’ of entrepreneurs, and businesses move overseas to be competitive. Voluntary giving is reduced, growth is stunted, unemployment rises, and the poor multiply. And these poor are real people in real situations – the very people to whom the Lord ministered and placed in a privileged position in the Kingdom. They were called blessed, and were given assurances and promises of a better life in the world to come. They are hard-pressed pensioners or single mothers pulling their hair out trying to make ends meet; they are not simply numbers in the latest government round of statistics. The reality of their plight becomes a very strong moral argument for lower taxation, and if any in the Party knew anything of Conservative philosophical foundations – which are and have always been acutely compassionate - they would arrive at the conclusion instinctively.
The government has a duty to taxpayers to ensure that their money is well spent, and the moral obligation is all the greater because this taxation is extracted through compulsion, on pain of imprisonment. And when billions of pounds are poured into black holes of bureaucracy, inefficiency and incompetence, it is a moral outrage. To take a worker’s hard-earned money through coercion demands that the level of public spending be good enough to fulfil the trust and good faith of the worker. The benefit to society of the tax must outweigh the pain of paying the tax. This is not an economic argument for a specific level of taxation, but a moral argument for limiting taxation. The limit should lie where the trust is fulfilled - where the value obtained for taxpayers from the money outweighs the harm done by the tax.
But this is not some attempt at a scientific Benthamite concept of psychological hedonism or utility analysis by which pleasure and pain may be measured to devise a new moral standard of behaviour. One cannot easily measure the pain inflicted by tax, or even the good that is contributed to society through public spending. It is rather an utterly unscientific appeal to a sense, a feeling, an intuition that the actions of government are useless or counter-productive, that public spending no longer justifies the pain of the levied taxation.
Over the past 9 years, council tax as soared, NHS spending has soared, spending on education has soared, and money has been poured into numerous government departments to very little discernible effect. People are not ‘happier’ than they were twenty years ago, and they are acutely aware that they are paying much higher taxes without experiencing any proportionate benefit. They now have this sense, this feeling, this intuition that the Utopia they were promised has failed to materialise, and that they are paying heavily for the government fraud committed against them.
The promise of lower taxes is therefore a necessity. It takes moral courage to take the tough decisions associated with the policy, but no-one wants more government, and very few actually want big government. So while Labour vilifies the greedy ‘fat cats’ of the private sector, Cranmer is more concerned by an obese government oblivious to its terminal condition. Government needs to be smaller, so it must slim down. One could resort to liposuction, but the self-discipline of a healthy diet will be more enduring. When it is slimmed, it will be fitter, leaner, and much healthier. Taxes can then fall, and people will feel better. Harm is limited, and the good proliferates. Growth increases, jobs are created, unemployment falls, and poverty will diminish.
What on earth is so difficult to understand about that?