So, now the Tories have three distinctive tax promise, all of which are batty.
Their longest standing policy is their dog whistle tax incentives for marriage, proving their commitment to 19th century values when marriage was all about money and women were chattel. And, incidentally, neglecting their focus on the whole “two unmarried spinsters who live together” demographic that was so totemic for Lady Young during the parliamentary debates on civil partnerships. Moreover, giving a tax break to the vast majority of the population means it will either be expensive, or so small as to be meaningless. Do we really need a rise in people staying together for the sake of the accountants?
During conference season, we had the strange Tory ideas about council tax. They clearly like council tax – they invented when Poll Tax proved too difficult to hold onto. It favours the obscenely wealthy as everyone with a home worth more than £300,000 in 1991 pays the same top band – whether the house was worth £300,000.01p or £10m.
So the Tory idea for making a big difference to council tax? Complicated freeze arrangements where the government plays double or quits with local authorities who manage to find savings that look more and more impossible as fuel rates and inflation soars. Even if my council manages to find the money with vicious cuts, it puts just over £1 a week back into my pocket. Wow. Well done Tories. That’s really going to make a difference.
It’s not even progressive taxation since the poorest are unaffected as they will continue to claim Council Tax Benefit, and the wealthiest in Band H houses get twice as much as the Band D-ers and three times those of us slumming Band A – which, incidentally, includes vast swathes of northerners where house prices are very slightly more in control than the overheated, overpopulated South East. Snaps for Tories there, then.
So having “fixed” council tax, what wonders are the Tories pulling out of their hats to help with employment rates? They’ve come up with a bribe to employers to take on new staff, so long as those staff have been jobless for more than three months prior to hiring.
Where to begin with the problems on this? One: companies are currently laying off, not hiring. The financial problems they are facing are less to do with the cost of labour and more to with the fact that they’re not selling enough. Even assuming it works, it’s hardly a sensible way to secure sustainable job prospects for employees is it? Come the end of the first year, when employers are suddenly liable for their part of National Insurance contributions again, are they going to suck it up and pay it? Or are they more likely to find a pretext for terminating expensive employees for a new army of subsidized workers fresh from the dole queue? Hey it might even work out cheaper to put your existing workforce on short hours and hire some rookies to take their places!
Darrell Goodliffe suggests the proposals go nowhere to mollifying the Tory faithful so just what are they playing at? Did Master Gideon bound to the lectern with empty hands and a blank mind and blurt out the first thing that occured to him?
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11 Comments
It is a big con to suggest that the NI wheeze is funded by the jobs thereby created: because it will apply to a great many jobs that would have been created anyway – even during a recession. It has a huge deadweight cost that the commentators have not been picking up on.
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2008/11/camerons-tax-con.html
Spot on – good post.
The other one is the raising of the inheritance tax thresholds, which is good news for the (literally) dead rich, and adults lucky enough to have squeezed out of wealthy vaginas.
Good post. It’s time for me to admit that – yes, we are certainly not the only party that has messed up on tax policy!
what complete nonsense. where to begin?
1) Some businesses ARE hiring – mine is
2) it’s better for the economy to have 1000 people working than 500. even if your extreme plan for cutting hours and hiring, is put in place by an employer (in my business experience VERY unlikely for countless practical reasons) then you get 500 people working, occupied, and earning. this has to be better for them than leaving them on benefits, not to mention the taxpayer
3) 1991 house prices are ages old , hence their levels confusing – don’t forget that a house worth as much as £400,000 now was probably worth £70,000 in 1991 – many many properties in the South East were Band D or below. The conservative plan would share council tax savings across all taxpayers. The “northern” term is a gross over simplification (isn’t Osbourne’s Cheshire constituency “northern”) but councils where there are more Band A homes, would have more of the benefits go to more Band A homes – so everyone benefits.
4) As for, “closing loopholes for the rich” this is populist – and works as far as succeeding in closing loopholes. But revenues from doing so are highly elusive. do you lot really think that rich people’s tax advisors will respond “oh, ok, loophole’s closed – here’s a cheque to HMRC”. No, they’ll move assets offshore, find a new loophole, or sell the assets. By all means get HMRC & Treasury to close loopholes, but don’t expect to make any money.
Carlos: Haven’t you just articulated the exact problem with this Tory policy?
1) Some businesses ARE hiring – mine is
Yes, and the Tories intend, therefore, to give your business (which by the sound of it is doing fine) a hand-out for taking on people it’s taking on anyway. Meanwhile, they propose to do nothing to help firms who are struggling and thinking about having to lay people off.
They’re also proposing that, given the choice between taking on someone who’s just lost their job and someone who’s been unemployed for 5 months, a business should choose the latter for financial reasons. If I was the former, I wouldn’t appreciate that. And that situation doesn’t get anyone extra off the dole, which is what’s *supposed* to pay for this…
Excellent article, Alex. [pedant] should be Which nutter writes Tory tax policy? [/pedant]
It’s a fair cop Mr Editor – but if you’re going to change that there’s typos aplenty too!
So what is the LibDems solution? More income tax? Less income tax?
All present taxes are damaging to the economy and depress economic activity. The old Liberal Party used to be an advocate of land value taxation – an ad valorem tax on the rental value of land. Getting rid of existing taxes and replacing them with LVT is a no-brainer, so what happened to the proposal?
@Henry,
“So what is the LibDems solution? More income tax? Less income tax?”
Less income tax.
http://tinyurl.com/5t575w
http://tinyurl.com/5gm2gm
As you may know, LVT as a cause is very much alive within the online party and the stalwarts will be along to echo your question shortly…
http://www.libdemsalter.org.uk/
Myself, I think the strategic emphasis for LVT eggs needs to be on persuading the media to talk about LVT and soften the political culture up to it, rather than persuading political parties to adopt it. Especially us, because our adopting something is no guarantee that it’ll even gain widespread factual coverage, let alone acceptance.