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Hardly headline news in ordinary circumstances, but this coalition finds itself in anything but ordinary circumstances. Chancellor Osborne appears to have ruled out making the tax system fairer - specifically, by raising more from the wealth that is concentrated so greatly in the hands of so few. Furthermore, he seeks to close the gap between the Treasury's income and expenditure not by investing in the pillars of tomorrow's growth, nor by taxing idle and largely unearned wealth, but by cutting yet more from the welfare budget.
In doing so, Osborne confirms that he's on the side of the privileged, not those whose living standards and future prospects are squeezed by the continuing economic depression. Osborne is of course entitled to play to his party conference gallery, but he governs as part of a coalition with the Liberal Democrats, and for us, fairer taxation of wealth is inevitable, not least given the failure of spending cuts and cheap money to revive the economy and restore balance to the government's finances.
Who gets their way over wealth taxes and welfare spending will probably define the coalition's fate - not to mention that of the wealthiest and most vulnerable in society.
Liberal Democrats have long argued that alongside lifting the income tax threshold to take the lowest earners out of tax, the tax system must be reformed to address inequalities of wealth that blight society and hamper economic progress. The Tories have been more than happy to go along with the former, raising the income tax threshold as promised in the Coalition Agreement. But when it comes to the other end of the tax spectrum, the Tories simply haven't changed their spots; had it not been for those pesky yellow bastards, the top rate of income tax would have been cut to 40p not 45p, and now we have the Chancellor ruling out yet again taxes on wealth that are backed not only by his Liberal Democrat Cabinet colleagues in Vince Cable and friends, but by many in his own party.
There is a clear need to tax the largely unearned and unequally distributed wealth locked up in property. Failing to do so at a time when living standards stagnate for those not fortunate enough to live in a house worth £2m is bad politics, bad economics and bad judgement.
For some, a wealth tax is needed to placate Lib Dems opposed to further cuts in the welfare budget - to a social liberal, there is no such trade-off, as wealth taxes are both fair and economically efficient in their own right, whilst arbitrarily removing even more support from welfare recipients is neither.
Overnight it appears as though Osborne's determination to cut welfare spending has hardened, and the Prime Minister is sticking to his guns on bus passes and winter fuel allowance for the elderly regardless of need, preferring instead to take aim at under-25s in receipt of housing benefit - again, regardless of need. Cutting the welfare budget in this way defies intergenerational justice.
If Osborne refuses to tackle concentrations of wealth, then the gloves are off. Nick Clegg and the Liberal Democrats should not hesitate to affirm ourselves as the party of fairer taxes and ask, if not through taxes on property and assets, how the Chancellor plans to stick to his own promise of making the rich pay their share.
Follow Dr Prateek Buch on Twitter: www.twitter.com/prateekbuch
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And that despite our great efforts,we're going to ask the poor to get poorer to help us all out.[We've talked about[well,some of us have]trying to extract more from the rich,but it's simply not possble,no matter how much we talk.So we'll just have to take money of the defenceless poor without tax lawyers and accountants and schemes-you know the way it is.
Wonder if the tories are going to make policy about the corrupting and anti-democratic £2billion lobbying industry,or even closing the the revolving door between politics and commerce.
UMMMMM.....
Is there a pattern here?
We are all in this together....
Aren't
we????
[And of course,why do they not slam the revolving door shut and remove the lobbying industry?]Maybe there's a pattern there.
When the UK had lower taxes we had more jobs and better grwoth, not up for debate I am afraid.
Lets spend £100 million on tyring to bring in an extra £35 million from successfull citizens. Real smart.
The UK state spends 47% of the GDP. The UK state since 1950 has NEVER spent more than 39%.
Do we have better more jobs? Do we have better schools? Do we have more equality?
The more the state spends the worse everything gets. The UK is copying greece, and it is not working.
People who moved in to their family homes in London decades ago would find themselves subject to taxes even though they are neither rich nor possibly even middle class. Property is subject to asset inflation, it may increase the value of the asset but it does not increase the liquidity of those who happen to own it.
A mansion tax is just as likely to hurt the working classes and lower middle classes as it is the rich.
The Government is spending 47% of the GDP, more than any other time in post war UK.
We need to cap state spedning and cut corruption and wars, "simples."
and reason? Quote of the century: There is no excuse for penalizing those, who though no fault of their own are living in million pound mansions.
“the hands of so few.”
Never, in the field of human economics, have so few fought so valiantly to retain so much. We will fight them on the logic, on the morality, and on the justice. But we shall never be Big Society.
“idle and largely unearned wealth”
Plant some stored seed grain. Or we may not see another harvest.
“he's on the side of the privileged”
Not sense. Since if this ship sinks, we’ll all be swimming in it.
“entitled to play to his party conference gallery”
Just as Marie Antoinette’s cake cart catered for courtiers.
“those pesky yellow bast**ds”
Currently as chromatic as an angry bird’s custard.
“income tax would have been cut to 40p not 45p,”
Why not lower? If deferred advantage had been gifted. Whereby long term venture investment had been a condition.
“a clear need to tax”
suggests deduction without benefit. Why not make taxation synonymous with investment? Its is less egregious to contribute if some return, for what might otherwise be seen as pure loss, is associated.
“a wealth tax”
could become a hedge investment. The government needs funds. Why not obtain them direct from source, and dispense with the profit margin of the financiers?
“concentrations of wealth,”
are one thing. Concentrations of unproductive wealth, are self depleting agglomerations of abomination.
It is simply the politics of envy that drive such childish approaches to economics.
Taxing based on property values will only raise marginal amounts and penalises people who are fortunate or who have worked hard.
It is likely that the majority of people with valuable property will not have enough cash to pay such taxes and even if they do it will mean that they have to reduce spending in such a way that employment in other sectors will suffer.
People will low income will be forced to sell their property - probably at less than market value because the buyer will know they are under pressure to sell.
Mansion tax - a recipe for disaster
It distracts attention from failed and corrupt governments, it has been sued for many years. Hitler used the culture of envy to get people to hate jews.
The state is spending 47% of the GDP, higher than ever since WWII. They are clearly just wasting large amounts of it.
The state needs to cut corruption, pull out of wars and the Racist EU, then we will maybe think about tax rises.