Ed Miliband is singing the right tunes:
Ed Miliband has ruled out proposing fresh increases in personal taxation or cuts to middle-class child benefits as he promised to say more this week about how quickly and deeply Labour would cut the deficit before the coalition spending review on 20 October.
He continued: "I'm not proposing rises in personal taxation beyond those set out by Alastair Darling, definitely not, but what I am saying is if, for example, the banks can pay more or you can clamp down on tax avoidance, you should do so". Miliband has spoken of doubling the bank levy.
We don’t need tax increases overall now — they have the same economic impact as cuts.
As Darling made clear — we do need a more progressive tax system.
And it’s clear the Tax Gap is now part of the agenda.
As are taxes on banks.
I but that agenda.
Dammit, I could have written that agenda.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Hi Richard,
You often ask for a more progressive tax system. Can you give some rough numbers?
At the moment we have:
– tax free band
– 20%
– 40%
– 50% with removal of tax free band
– 50%
Seems hugely progressive. The main problem is in the negative side, the effective tax rate between being on benefits and working which seems to give a 95% marginal tax rate. Are those not working being paid too much or those working being taxed too much?
@Noel Scoper
But it works out the rich pay least – so the rates are simply not what happens
This doesn’t benefit the people who really need the benefits. It really is that simple.
“We don’t need tax increases overall now — they have the same economic impact as cuts.”
Doubtless true in terms of macroeconomic impact, but not so in the effect on the individual. I would prefer to be one of a large number paying more tax than one of a smaller group losing my entire income when my job is cut.
@John Diggers
But the benefit is for the sake of the child
Why discriminate between children?
If you marginally increase higher rate tax then all higher rate taxpayers subsidies children what a great idea!
@Mark Wilson
Entirely understood
But – right now we don’t need cits or new tax – we need spending to create new economic activity
When we have unemployment under control then we raise taxes – not cut
That’s where we converge in our thinking
@Richard Murphy
Doesn’t sound like we have go very far to converge.
I came across this blog while looking for some background to support a personal thesis that there is a strong case for a substantial rise in inheritance tax: a thread from some years ago indicated that you have no issues with IHT in principle. Briefly, if there is a consensus that baby boomers, of which I’m one, are in the process of disadvantaging succeeding generations through both the property market and unsustainable pensions, then shouldn’t this be equitably addressed by an increase in IHT?
Sorry if this strays beyond the boundaries of this thread, just wondered how more informed commentators might view this?
@Mark Wilson
I entirely agree with you
The nonsense written about IHT is amazing – like “keeping the family home for the next generation”
You mean at 60 children get their first home, having waited a lifetime to move into 3 Acacia Drive?
This is just about greed
And since wealth disparity is even greater than income disparity in the UK the need for comprehensive capital taxation is high
Annual land value tax would stop a large proportion of property value from being handed down. As for the rest I can’t see the problem in treating inheritance as unearned income and taxing accordingly.
@Richard Murphy
The small problem is getting the message across to the Daily Mail types that it is more in their children’s interests for society to be stable and fair than for them to be left chunks of loot. Theoretically, as greater numbers would benefit than lose that message should succeed in a democracy, but as we all know life ain’t quite like that. If the inheriting classes (I’m a member) could be thoroughly demonised in the press the way the public sector has been, there would be a chance, but the press does tend to be controlled by people with a vested interest in inheritance…….
We perhaps need to avoid emotive words like greed, though. It certainly applies to the Murdochs and their kind, but we are mainly talking about normal people who firmly believe that passing on wealth is their duty, and have no concept of the divisive effect on society. Changing attitudes would need to be a gradual process, but we are nowhere near the starting line yet.