Ed Balls and tax mad Neanderthal economics
Just as Britain really starts to emerge from recession and get on its feet again trust the Labour Party, which got us into the mess in the first place, to come up with something utterly ruinous
Anthropologists believe that Neanderthal man disappeared something in the order of 30,000 years ago. But if our not so sophisticated close relations went extinct they do at least seem to have left some economic policies worthy of their name for posterity.
Enter Ed Balls, Labour shadow chancellor and the man who would run our economy again, having proudly played a part in ruining it the last time he had a chance.
Balls has announced that if his party ever get back into power they'd make it a priority to hike the top rate of tax back up to an enterprise-destroying 50 percent from 45 percent today -- a rate that we would cut instantly to 35 percent, and then only for starters.
The TaxPayers' Alliance (TPA) was quick off the mark in response, and they were in taking-no-prisoners mode:
"Reintroducing the 50p rate would be an unmitigated disaster for Britain. It flies in the face of the evidence, which shows that cutting the top rate has brought in more cash to treasury coffers and boosted the economy.
"Ed Balls has rightly identified the need to balance the books, but the best way to do that is to cut spending, not hike taxes," TPA Chief Executive Jonathan Isaby said in a statement responding to the announcement which was made to the Left-leaning Fabian Society.
The Confederation of British Industry (CBI) was also scathing about hiking taxes as a way to promote growth and cut debt.
"We don't believe that introducing a 50p income tax rate is the right way to raise the money because this puts talented people off coming to the UK to invest and create jobs," Katja Hall, CBI Chief Policy Director, said in a press release.
The TPA and the CBI are obviously right. There is a vast body of evidence showing that high taxes destroy growth and frighten off investment. One only needs to look across the English Channel to France with its new 75 percent tax rate.
High tax has made France one of the most sclerotic major economies in the world, and it has prompted an exodus of wealth, along with hundreds of thousands of young people, many of whom have sought refuge in Britain.
If Ed Balls and the Labour Party are now in competition with France for the most reckless and ruinous tax policy in the Western world, that is just one more reason to keep them out of power for as long as possible.
People in Britain will continue to debate the rights and wrongs of government economic policy over the last few years. But we do seem to be surpassing all expectations in cutting the jobless rate, establishing solid growth and raising, slowly but surely, real wages.
The last thing we need is some shallow social populist like Ed Balls wrecking things by playing the class warrior, and all because his predictions about Britain's economy have now been refuted by experience.
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