.comment-link {margin-left:.6em;}

Monday, March 06, 2006

Vulcans on the starboard bow

Although David Cameron came to Wales at the weekend and told critics of his policy reforms that he was prepared to accelerate the pace of change even further, things are not so hunky-dory in the Conservative Party.

This morning's Mirror newspaper reports that the Tory economic chief, John Redwood, has already contradicted his leader's tax plans:

The right-winger, dubbed The Vulcan by bitter ex-wife Gail, produced a pamphlet backing controversial flat taxes.

It would mean everyone from binmen to billionaires pays the same rate.

His call comes weeks after Mr Cameron ruled out the scheme and will be seen as a direct challenge to the leader's authority as he seeks to move the party to the centre.

Redwood was recently put in charge of developing Tory economic policy.
In rejecting Mr Cameron's olive branch, he is opening up the prospect of a rift in the party.

Mr Cameron has pledged that the Tories now believe in putting stability above tax cuts.

But in his pamphlet The Bad Bet - Economic Failure of the European Union, Redwood calls for massive tax cuts and flat rates of about 20 per cent for individuals and firms.

Treasury sources said cutting taxes to a flat rate of 20 per cent would cost the economy nearly £50billion - the entire education budget.

Cameron is discovering to his cost that herding dinosaurs in thunder is not an easy task at all.
Although this might seem a bit geeky, the fact is that, although a good line, in fact it is not thae case that "Binmen and Billionaires" necessarily pay the same rate under a flat tax.

If you set the tax threshold at £14,000 (as some have proposed) is means that very large numbers of people pay no income tax at all- including your Binman. This is why it is possible to argue that flat taxes can be progressive.

While I don't expect to convince you about flat tax in a single post, I do think that given the massive fiscal drag
of the current tax/benefit system, we have GOT to start thinking about simpler taxation- even if a single tax rate is beyond us. BTW the 50% top tax rate will probably REDUCE the total tax yield, since it then makes the very wealthy shift their income off shore. I would far rather that Billionaires paid 25% of all their wealth than 50% of about 3% of it.

All the best
I am not convinced about this at all, however this post was not about flat rate tax but about the chaos in the Tory Party.
I know Mr Morgan refered to the Siambr as the bridge of the star ship enterprise but isnt this a bit to much.
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?