Thursday, October 19, 2006

Tax (Ye Gods not again!)

So George Osborne says precisely what we all knew he was going to say about the Tory tax Commission's report: namely that it'd very interesting, provides an intellectual framework for Conservative policy but that he is not prepared to offer specific, uncosted tax cuts now. This is received at Conservative Home as an abject surrender to the principles of leftism.

I see their point - it's absurd to suggest that there is no scope for cutting spending. Public spending is grotesquely inefficient, and many of the programs are redundant, irrelevant or counter-productive. The proposal to abolish Stamp Duty on share transfers is likely to stimulate financial activity, which should increase revenues from other sources: lower Corporation Tax would probably have a simiar effect, since the benefits to the Company would be passed on either to employees or shareholders in a taxable form.

However, it would be leaving a massive hostage to fortune (more accurately Gordon Brown) to produce specific tax-and-spending plans anything up to 3 1/2 years before the next election. A new spending round is under 'review' as we speak - if the Tories propose cuts to a specific program that is later cut by the Chancellor they look stupid and redundant. Surely it is possible to accept that the wisest policy at present is to allow glimpses of an underlying philosophy without publishing an exhaustive policy statement based on data that will be obsolete by the time of the next election?

Refusing to identify specific cuts now is not the same as accepting that this level of tax and spend is the correct one.

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