Monday, April 07, 2008

Income Tax: the moral case for the 10p band

The Prime Minister’s decision last year to eliminate the 10p starting rate for income tax is now operative, and the theory of economy which persuaded him of its benefits is vastly outweighed by the political reality that thousands of people in the lowest income households (five million earning less than £18000 per annum) will be around £200 worse off. In short, he is taxing the poor to pay for John Prescott’s £4000 grocery bill, and no ordinary man-in-the-street will see the justice in that.

When one considers the considerably-increased costs of food, fuel, and council tax (not to mention cigarettes and the tax-escalator on alcohol), and the bizarre (and bureaucratically expensive) preference for dishing out benefits and tax credits instead of sustaining the 10p band, the ‘party of the poor’ which professes to be concerned with social justice is nothing of the sort. New(-ish) Labour has widened the poverty gap by positively encouraging people to remain in poverty, and has made the whole system so convoluted that people have ceased to comprehend it. It was John Cole who said: ‘Politics is only important through the effect it has on the lives of ordinary people’. And these ordinary people are about to face the financial consequences of 10 years of Labour.

The 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 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 fulfill the trust and good faith of the worker. The benefit to society of the tax must outweigh the pain of paying the tax. It does not. This Labour government has failed to fulfill its moral obligations and failed to deliver its political promises.

Cranmer is reminded of a scene from Shakespeare’s Henry VIII which features His Grace responding to the litany of complaints against Cardinal Wolsey's destructive appetite for burdensome taxation, his hoarding of the nation's wealth, and his wasteful self-interest. Instead, Cranmer offers a vision of economic plenitude during the future rule of Elizabeth: ‘In her days every man shall eat in safety / Under his own vine what he plants, and sing / The merry songs of peace to all his neighbours.’ In immediate contrast to the spectre of Wolsey's degenerative ‘ill husband(ry)’ that defies ‘thrift’, this is a vision of self-sufficiency, of a nation made up of perfectly-functioning domestic economies, of households which are happy and content with their lot; a country at peace with itself.

If one’s hope is to keep one joyful, one may replace ‘Elizabeth’ with ‘David Cameron’. To believe otherwise is to offer no hope at all.


Blogger Newmania said...

I am confused by this Brownian motion. The vertiginous disincentives to work in the marginal benefit /tax "poverty trap" as it used to be called were to a small extent ameliorated by the 10P rate so in his own Byzantine and wasteful way Brown had a claim to fairness. Having tempted so many into hapless neediness it is heartless indeed to abandon them now, and I am glad David Cameron shows sympathy with the single mother and welfare claimant . They are not a universally lost souls but only people making the choices as they appear to them.It is a difficult situation to bring glib answers to and Cameron has wisely avoided them.
I saw the appalling dissembler Clog claiming Brown had done it for the sake of single headline on the base rate but this is surely not plausible. My view is that he welcomes the fight with his left as a chance to establish Blairite credentials which he now believes are the only easy back into the affections of the middling in the South. The people he is taxing are not likely to go elsewhere and like the right of the Conservative Party to Cameron , they are in Constituencies he cannot lose

The supposed objective of a simplified tax system is a nonsense given the Heath Robinson apparatus of negative taxes retained . This is, I think , an exercise in negative branding , He wishes to lose the poor in the way Burberry wished to lose a not dissimilar association.

So human and misery in the cause of re-branding . Once again I am reminded that Brown taught Blair and not visa versa

( Henry VIII...that is obscure ! )

7 April 2008 at 13:57  
Blogger Dave said...

"part of the poor" eh? Anyone who voted Labour is much poorer now. As Mr Balls might say "So what?"
Our Lord said that those who know they are poor in spirit will be blessed. Those people he spoke to then lived in a land ruled by an occupying force. I guess we're just learning what that's like, what with being ruled from Brussels and a puppet government in place. To complete the analogy, old snotgobbler has washed his hands of us, declaring that tractor production is up again and now stands at a record high

7 April 2008 at 15:02  
Blogger Dave said...

Sorry- typo
I mean "Party of the poor"

7 April 2008 at 15:08  
Anonymous hear o israel said...

your grace
i cannot believe nu labour are doing this , it is the equivalent of socialist herisey , on a day when nurses get an 8% rise the gov cuts the basic 10p band on the poor , is there pr dept malfunctioning again??

a certain Mr J Hescariot was a tax collector , i dont know wether he collected local or empire taxes , but so spell bound by personal financial gain and a desire for power , that when he had played his part, he committed sucided , knowing that his lack of love and humility had lead to biggest crime of all.

The crime here appears to be one of a loss of a degree of freedom through choiceof work . It is true that many people have little choice , pity the poor people of zimbabwe , a life expectancy of 45 while mugabe moves into his £4 million mansion.

the plight of the foolish poor is intertwined by the foolishness of the rich.

Taxes raised fairly and spent wisely can benefit , taxes used for blatant propoganda and the lining of cronies pockets unduely is a form of robbery.

the money put aside for northern rock could have more wisely used especially for that rainy day that now seems to be with us let alone the other follies!!

7 April 2008 at 17:34  
Anonymous Anonymous said...

I hope the Conservatives use this tax on the lower paid to full advantage.
Reinstate the 10% band and put the NuLab plea that they are the party for the working man in it's place, ie. the dustbin of history.
Nu Lab has never been a party to support the lower paid, they will support the workshy, and unmarried mothers, but NOT the lower paid workers.

7 April 2008 at 17:46  
Anonymous brotherjonathan said...

There is a party that has pledged to abolish the income tax: the Libertarian Party. Here's the link.

7 April 2008 at 17:47  
Blogger Adrian Yalland said...

This is not about helping the poor, it is about creating a client state of the permanently impoverished, peranently dependent and pernantly grateful Labour voters, who will ensure that it is always harder for nasty evil poor-hating Tories to get elected.

It is tax payer funded subversion of democracy!

7 April 2008 at 23:54  
Anonymous Voyager said...

People dependent upon the 10p band should not be paying Income Tax at all. The UK Income Tax is highly regressive and the tax-allowances paltry.

Looking at countries like Germany where the top-rate cuts in at far higher income levels than here, one can see that taxation - both Council Tax and Income Tax is deliberately designed to be regressive and a means of control by having everyone registered with HMRC

8 April 2008 at 16:04  

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