Monday, October 16, 2006

The joy of tax

Tax has been occupying my thoughts more and more recently. As a new addition to the global workforce, I notice the hefty slice taken out of my income rather more than the incremental taxation paid on goods and services that you suffer as a student. As I believe I have noted before, the most important thing to acquire in the rpesentational side of politics is a narrative. Cameron has acquired a change-based narrative despite giving jobs to Ken Clarke, Iain Duncan Smith and John Redwood. If he is not careful he will acquire the "all style no substance" narrative as well.

The Labour Party have many narratives, many of them becoming increasingly bleak, but the one they need the most is the "whatever else they've done, they've done a good job on the economy" tag. It was a lack of confidence in their basic economic competence that dished the Labour Party throughout the 80s, a lack of conffidence that was richly merited. Similarly, the stain of Black Wednesday still tarnishes the Conservative brand. As a side point, the Labour Party can consider itself fortunate to have lost the 92 election for this reason - the image of the first Labour Chancellor in 15 years blinking in the press flashbulbs outside the Treasury would have booted them straight out again for a generation.

Yet there are signs that the narrative is changing even here. Just as you can throw pebbles into a lake for a long time before you see them breaking the surface, the economic bad news has taken a long time to filter into a national consciousness. But stories on companies re-locating to avoid high taxation levels; of massive fiscal drag; of 'Tax Freedom Day' stretching well into June: all these stories go to make up a new narrative. This is that the failings of the Labour Government on prisoners, schools, hospitals and foreign policy are equalled by their failings on the economy - and for the same reason.

An overweening desire to intervene permeates this Labour Government; a belief that only through Government action and primary legislation can anything be done. On home affairs this has led to micro-managed chaos in the NHS, on foreign affairs it has led to under-funded and over-stretched armed forces doing too much with too little and on economic policy it has led to vast quantities of taxpayers money siphoning through leaky Treasury pipes in an attempt to pursue social policy objectives through massive spending.

Nowhere is this more apparent than in the extraordinary inflation in size of 'Tolley's Tax Code' nearly doubled in size since 1997. Tax, as best explained by Nigel Lawson, should be simple, low and compulsory. It is the particular genius of Gordon Brown that he is batting none from three.


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