The new political battleground

By Carol Barrie on Sep 17, 08 03:16 PM in Tax

Events this week, and in particular comments from the Liberal Democrats at their Conference in Bournemouth, have only served to further confirm that tax is now the clear political battleground between the parties.

Cynics might say that at least this has given the NHS a period of 'respite care'. Better for the physical health of the country you may suggest; but what about its economic health?

Two suggestions so far by the Liberal Democrats have been a high speed rail link to Birmingham funded by a motorway tax and cuts in the rate of income tax funded by higher taxes for the 'better off' a clampdown on tax avoidance and 'Whitehall' cuts.

If the current credit crunch has taught ordinary householders in the UK anything, it has been that the Country cannot survive long term on ever increasing levels of debt. It has to cut its coat to the available cloth.

Politicians, however, seem to have this concept of deciding what they want to do, and then trying to find the way in which goose can be plucked to pay for those plans with the least hissing and commotion.

Would it be too outrageous to suggest that politicians should also start to think this way and move away from trying to pluck the goose by ever increasing stealth taxes? In other words, they decide on what is a reasonable and acceptable level of taxation on the population and then see how to get the very best value from that money.
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The world is shrinking! If UK businesses feel they are paying too much tax in the UK they will simply relocate to another more hospitable regime. The same is true of the entrepreneurial wealth-creators and inventors who have been the backbone of this economy for so long. The UK economy cannot afford to lose businesses or entrepreneurs who create jobs and wealth.

Even retired 'Brits', many of them taxpayers, who could contribute to the overall tax-take in the UK are voting with their feet and looking for warmer climates and more hospitable tax regimes.

If the British public realised just how much of their hard earned income was being taken in one form or another by Government, there would be a mass revolt. Income tax, national insurance, corporation tax, council tax, value added tax, insurance premium tax, landfill tax, airport taxes, fuel taxes, stamp duty land tax, inheritance tax, capital gains tax and road fund licence. Unfortunately there is no comprehensive research showing just how much of the income of a typical household goes back to the Government. Perhaps such research is long overdue!

What is needed is a straightforward simple tax system which is fair, understood and transparent which encourages businesses and wealth creation. This then needs to be coupled with a social security system that protects those who cannot protect themselves and encourages personal responsibility.

Politicians then need to be held accountable for the promises which they make to the electorate.

This Government's promise 10 years ago was not to increase income tax. What price this promise - when they have just increased national insurance instead!