The whole fiasco about Labour abolishing the 10% tax rate is only the tip of the iceberg in Gordon Brown’s attempt to dictate an economy based on doing what he wants, rather than having the freedoms that we are entitled to.

If you’ve been on another planet the last fortnight, or having a ‘sanity break’ from the news, then here’s a summary:

Last year:
– The government announced that it was reducing the core income tax rate to 20%, and hidden in their announcement was that they were abolishing the 10% rate that this government introduced.
– People earning less than £18,500 would pay more tax, the worse hit being those on the lower incomes in that range
– Those earning more than £18,500, they would be better off, the higher incomes benefitting more than those on lower incomes.
– That some people on low incomes would be able to claim enhanced tax credits
– The next effect that we knew then was that many, many people would not be eligible, and, that many would not jump through all the hoops doing more paperwork to claim what they are entitled to.

And this month:
– People started seeing how much they lost out by, and writing to their MPs
– Some Labour MPs threatened to rebel, now fearing a backlash from their constituents, so even more complication was offered (at a cost of roughly an extra £1,000,000,000)
– These were the same MPs that ignored opposition warnings about this very problem!

The net effect is:
– Even more people must claim tax credits or lose out
– Some people still lose out
– Lots of people, who are not those struggling to pay for food, and to heat their home still gain.
– And, there’s a £1bn extra hole in the budget, funded entirely to cut taxes on the better off.

So, that’s the summary, but why am I saying that the real issue here is about or freedoms?

Simply put, our current tax system is both undemocratic, and illiberal.

The democracy element is well established. As the Liberal Democrats’ Reducing the Burden tax paper points out, the existing tax system is extremely complex, and full of loopholes exploited by the super-rich. When did we get to vote for “lower taxes for the extremely rich” as a manifesto pledge at a general election? Never!

From the element of freedom, then there’s a simple issue around income taxation: it taxes people for doing something productive. How is it fair to tax people for doing something that, far from depriving others of their liberal freedoms, actually adds to them, by doing productive work?

Aside from the general principle, the government is now saying that have to bear the burden, not just individually but also as a society, of a highly complex, paperwork intensive, tax credit system.

This is madness. People should be free to work as and when they choose. If they choose to live frugally, consuming less and working part-time, then they should be free to do so. They should not be subject to centrally dictated controls on their life.

It’s time that we put an end to Gordon Brown’s Stalinist state.

* Neale Upstone is Liberal Democrat councillor for Kings Hedges on Cambridge City Council.