Eat the Rich: A digestif?
Tax is back on the political agenda. But, as always, the parasites in Westminster just don’t get that they are talking about our money
Around a year and a half ago I wrote about the problem with eating the rich: eventually you starve. But it seems that a starvation diet is the dish of the day judging from some of the comments about Google this week. The complainers whine and sniffle about ‘fairness’ and the ‘right amount of tax’ but fail to explain exactly why a corporation’s money should become the property of the state.
Of course, we have a compact with the state where a degree of our money goes towards providing services and such like, but it is a compact that seems to have been corrupted down the line and instead of being a symbiotic relationship, the state has become a parasite.
A corporation provides jobs which are taxed, goods which are taxed, and dividends which are taxed; so why shouldn’t it also, on top of that, be allowed to use the system to avoid paying more tax than it needs to? The very globalisation of tax territories makes it ridiculous – no, dangerous – for politicians to blather on in an insulting manner to corporations over money those companies earn.
Take Google. It is very likely that we will see it move its European headquarters over to the UK in the near future and that’s on top of the money that it’s putting into the silicon roundabout in Old Street. But what if it decided, after the abuse it has received, to not move its European HQ? What if it packed up completely?
Now Google is big enough to take care of itself and deal with the insults, but the problem is that politicians just don’t get it. No one in the public sector appears to. All they see is that these companies have money; money they want. There doesn’t seem to be any thought as to what a company may do if it has had enough and the jobs, national insurance, income tax, and subsidiary job creation disappears.
And the same ignorance happens with income tax. Nick Clegg has being busy, this week, bleating on about how the Conservatives could not be relied upon to deliver “fairness” and why he couldn’t understand why the Tories didn’t ask for a “bigger contribution” from those “at the very top”.
I will resist the urge to once again trash the absurdity of talking about “fairness” – but it is indicative of the logic that those on the left, and indeed some on the right, apply when it comes to taking our money. And the most ridiculous thing about this is that there now appears to be evidence that lower taxation does bring in more money.
According to the Treasury, it took £11.5bn in income tax this April, a 10 percent increase on the previous year. This coincided with the “millionaire’s tax” – the reduction of the top rate to 45 percent from 50 percent because there appeared to be evidence that the former top rate was actually losing the government money.
Now there could easily be other reasons, as the Institute of Fiscal Studies points out, such as deferred bonuses and dividends, but I honestly believe that cutting tax does bring in more income. And don’t expect Labour to follow that logic.
A Labour source jumping on the IFS’s suspicions told the Telegraph: “high earners have moved income from last year to this year in order to take advantage of the top rate tax cut”. The unnamed idiot added: “By announcing a tax cut for the richest people in the country over a year ago, George Osborne lost much needed tax revenues, all at a time when people on middle and low incomes are really feeling the squeeze.”
But where did the unnamed idiot expect the revenues to come from if the 50 percent rate was still around? There’s plenty of legitimate ways of paying people without incurring the rate and I share Treasury suspicions that the top rate was actually costing more money than it was bringing in.
The sheer naked politics behind the rate aside – yet another ‘crime’ that Gordon Brown really should be answerable for along with bankrupting the country – this is the fundamental problem. Labour and the Lib Dems, and indeed some in the Tory party, genuinely believe that what you earn, what companies earn, is not your money, it’s theirs to spend how they see fit.
Time and time again I have said this, and in this centurion article, I will say it again: it is not government’s money, it is ours. We earn the money that government spends.
If the Conservative Party genuinely wants us to remain a country punching way over our weight then it is about time it grasped the nettle. It should stop trying to placate those in the public sector who would never vote for the party anyway and embrace the private sphere.
Ultimately, the Tories must encourage people to spend, and indeed save, by cutting back on the confiscation; encourage companies to come over here and create the jobs, direct and ancillary, that new work brings by lowering corporate rates.
We may just be a small island off the north-west coast of Europe, but if we can grasp this opportunity to seriously put one over our economic rivals then we can really begin to build our recovery.
Simon Miller is a contributing editor to The Commentator. Follow him on Twitter @simontm71
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