Wednesday , December 12 2018
Home / Adam Smith Institute / At last, an accurate description of Gordon Brown’s personal income tax policies

At last, an accurate description of Gordon Brown’s personal income tax policies

Summary:
Or rather, an accurate critique of it from the Labour side. Clive Lewis tells us of what we consider the most pernicious of Brown’s personal taxation policies. The manner in which he deliberately drove that income tax system ever deeper into the wallets of the poor. For this is indeed what he did, insisted that people ever lower down the income scale must be paying:He accused Tony Blair and Gordon Brown’s New Labour of “leaning on those further down the income scale”, while leaving “almost untouched” the “huge fortunes of those at the very top” – citing cuts to corporation tax, and fiscal drag, which brings more people into higher tax bands by leaving thresholds unchanged.Leave aside that taxation of the rich part and concentrate on that of the poor. This is the part of the system - and

Topics:
Tim Worstall considers the following as important:

This could be interesting, too:

Don Boudreaux writes Quotation of the Day…

Tim Worstall writes We can’t afford social care already so let’s promise ourselves more

Kai Weiss writes Tax Competition: A Practical Way to a Low-Tax World

José Niño writes The Deep State Wants Your Guns

Or rather, an accurate critique of it from the Labour side. Clive Lewis tells us of what we consider the most pernicious of Brown’s personal taxation policies. The manner in which he deliberately drove that income tax system ever deeper into the wallets of the poor. For this is indeed what he did, insisted that people ever lower down the income scale must be paying:

He accused Tony Blair and Gordon Brown’s New Labour of “leaning on those further down the income scale”, while leaving “almost untouched” the “huge fortunes of those at the very top” – citing cuts to corporation tax, and fiscal drag, which brings more people into higher tax bands by leaving thresholds unchanged.

Leave aside that taxation of the rich part and concentrate on that of the poor. This is the part of the system - and Brown made it worse - which we’ve long regarded as actually being immoral. Not just inefficient, or not likely to work well, or constrained by reality, but actively immoral.

For we agree with Adam Smith, that the better off should contribute more than in proportion to their income. Which means to us that the poor not contribute at all as a function of their income. If we have taxes upon apples then people who buy apples, whatever their incomes, should be paying the apple tax. But not income taxes upon low incomes.

What Brown did was that fiscal drag. Wages tend to rise faster than inflation. So, rises in the personal allowance which are only at the level of inflation drag ever more into that fiscal net - fiscal drag. You can see Brown’s performance on that here. At least once he didn’t raise the personal allowance at all and that at a time of strong wage growth. That’s reaching ever further down into the poor to pay for the British state, not what we think should be done. The effects in real terms - before that background of rising incomes - are here. Incredibly, in those real terms, Brown reduced the value of the personal allowance.

There are many things to criticise over Brown’s tenure as Chancellor. But this is the one we think unforgivable, his deliberate - and obviously complicated and disguised - insistence that the army of Labour voters to be bought by the beneficence of the state be paid for on the backs of the poor. Even if it’s only Clive Lewis who has woken up to this so far that is an advance for the Labour Party, that one understands it. Even if only the one.

Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

Leave a Reply

Your email address will not be published. Required fields are marked *