The Telegraph noted yesterday:
The Chancellor will have no choice but to raise taxes in the autumn to cover the huge amount of state aid spending for families and businesses struggling during the coronavirus outbreak, experts have said.
They added:
Rishi Sunak could be forced to break Conservative manifesto pledges not to increase rates on income tax, National Insurance and VAT to balance the books and make up for lost revenue.
Tax advisers are also warning of a strong-handed crackdown on tax evasion and avoidance, with HM Revenue & Customs handed additional powers to close the tax gap, which currently costs the Government around £30bn a year in lost duties.
I readily admit I did not see who the noted experts were: I won't pay for the Telegraph.
But let me assure them and their readers that the experts in question are not experts at all on this issue.
The question of whether we need tax increases is not one for those with a micro-accounting or legal knowledge of tax. It is one for macroeconomics. And no sane macroeconomics is going to suggest that money be drawn out of the economy any time soon (by which I mean red years, not months) unless the aim is to tip us into deeper recession.
That does not mean that tax reform is not required. The whole Tax After Coronavirus (TACs) project is about that.
And it does not mean that the wealthy need not pay much more: they should, as I will explain soon (the data is being worked on, now).
But to suggest most people - including all those key workers the Telegraph's readers clap each week - should be made to pay for this crisis is not just socially hideous, it's also economically profoundly wrong.
I suggest that the Telegraph cannot spot expertise on this issue. Those asked were clearly not in that category, whoever they were.
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I continue to see austerity and Brexit as elements of a religious faith rather than existing in a rational universe. I am of the opinion therefore that Brexit will happen at the end of the year, and austerity will be re-imposed ASAP. Religious wars are with us throughout the world.
I ask myself yet again ‘What have we done to deserve the likes of this from the Telegraph?’.
Sado-monetarism at is worst. Will we not have relief from this?
Again, it’s all about feelings isn’t it, not facts?
It’s as if society has been conned into believing that even if disaster strikes, society has to somehow end up paying for it; there is no way out.
Even life or a decent life – is a form of debt apparently. It’s like a new dark age.
Fundamentally it treats money as a closed system with no option but to accept the way it is divided up, because what is divided up is all that exists. So when disaster occurs, there has to be temporary re-allocation of funds to solve a problem (how kind!), but that it has to be given back and divided up as is was before. This does not acknowledge what we know especially from 2008, that new money can be created by Government.
But of course, to acknowledge something like this will only remove the spell the public are kept under by the mega rich and those they bribe in politics. It is the democratisation of money that the top 1% fears the most.
I would have thought that as we try to get the economy going after the shutdown, then demand will not outstrip supply, due to so many jobs/businesses going to the wall. Would that not mean that inflation would be low, and any reduction in consumer spending would be
counter-productive? Would it not be better to fund infrastructure improvments, via workers wages?
There is bound to be some uptake in spending – and we can but hope that people can work again
But investment ahs to be in a Green New Deal
Richard, they didn’t say who the noted tax experts were. The only name dropped was in a different context:
George Bull is very credible
I know him
I think he would agree he knows nothing of macroeconomics – indeed, he has told me so
I long gave up with reading the Telegraph.
This is the usual lunacy from the right wing press. The “How are we going to pay for it?” and “Where’s the money coming from?” brigade who are idealogicially welded to the idea that the nations finances have to be run like household’s finances. When will they see the light?
To decide on any fixed policy of austerity,balanced budgets,or heaven forbid a budget surplus, before we see the actual state of the economy is just unthinkable to any sane person. Can they not just wait and see what the lay of the land is before pre-annnouncing crippling ecomomic actions that would be akin to shooting oneself in the foot.Employment has to be the priority here not balanced budgets.
And if one more person mentions hyperinflation, Zimbabwe or the Weimar republic, I may not be held responsible for my actions.
Vincent Richardson says:
“And if one more person mentions hyperinflation, Zimbabwe or the Weimar republic, I may not be held responsible for my actions.”
Vincent, you neglected to mention Venezuela 🙂
Thank you Andrew,
So I did,I will include that one on my list too.