Coalition news: lowest taxation since the 50’s

Posted by RDN under Economic affairs / On TV & Radio / Politics & campaigns on 15 September 2010

Evan Davis lightly mentioned in Programme 1 of his Evan Loves Tax (BBC Radio 4) that on current plans the Coalition might (intends to?) end its first term with a 36 percent tax-take (as against total GDP). I always thought the Con-Libs were conducting an extraordinary coup, but this confirms it, if true. Here are two cheers. 

[This piece ought to be read with this pinch of salt: Nick Clegg told CNN (26 September, 2010) that the Coalition would end up with a tax-take of about 41 percent rather than Evan Davis’s 37 percent. If he’s right, the tax-take will be about that inherited by Labour from the Tories in 1997, and which they promised they would maintain for a couple of years.]

The dreaded Mrs T never achieved that (36 per cent) level of take, let alone the rate of reduction implied. (That is what I take from two salient documents, one from the IFS and the other the IEA.) In short, the Coalition is headed toward American tax assumptions and miles away from Franco-German, let alone Scandinavian, ones.

I would be even more thrilled if it weren’t for my anxiety that such matters ought to be discussed or at least pre-announced, as a matter of democratic accountability. I do of course see that the Coalition has probably just been learning the lessons readily to be gleaned from Tony Blair’s Journey (subtitle: A handbook to post-modern political reality): (1) Don’t waste your honeymoon; (2) don’t consult, lead. But these are lessons by which to bamboozle suckers, not build consensus and be transparent, which is supposed to be the New Tory mantra much more than it is mine.

It is additionally odd, you might say, that taxation is so popular, as Evan also let us know with the Comres poll conducted for the show. This suggests that redistribution of national wealth may be quite a sellable proposition.

That seems like a proposition to comfort the left. High taxes, big welfare state etc.

 But we need to remind ourselves that the state does not have to spend or control whatever level of redistributed wealth we go for, even if it forces the exchange through taxation. That was the lesson that John Major started proving with his reforms of the welfare state, and which Tony Blair began to sell as he fought to find words for the new State-Lite assumptions he thought were becoming the modern thing.

The Comres data also suggests that the poor really don’t get it. They of all people resist the thought that they do quite well out of the benefits that taxation brings. That may – just – be because they see the damage that Welfare Dependency brings them, though I doubt it. It’s more likely that they have an exaggerated view of their Welfare Entitlement. The core of this problem is the “Social Justice” mantra by which the middle class socialists constructed a language by which the poor are not allowed to be grateful to their benefactors. To put that more coolly: the poor were robbed of any sense of obligation, and that really did scupper them.

If we put all this together, I think we see a future in which there mey be a good deal of state redistribution which funds the poor (and maybe even wider society) to have the benefit of social services which aren’t owned or even controlled by the state. So, yes, it’s socialism, and Big Society, and volunteerism, and market provision.

One comment

  • Written by -10 on 07/01/11 at 5:00 pm:

    “If we put all this together, I think we see a future in which there mey be a good deal of state redistribution which funds the poor (and maybe even wider society) to have the benefit of social services which aren’t owned or even controlled by the state. So, yes, it’s socialism, and Big Society, and volunteerism, and market provision.”

    So, something like the French or German health service then? Where the market operates in competition and provides a service, but those who can’t afford it are funded by the state.

    I would certainly support this model in health and education. It’s not like we don’t already use it in housing, energy and food (via benefits, of course).

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