Brian Monteith: Smart money’s against tax plan

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Soak the rich! Tax them till the pips squeak. What’s a few thousand, or a few million to them? They can 
afford it.

That’s not what Nick Clegg, the Deputy Prime Minister, said, but he might as well have.

For although he would put it in far more silky tones, almost sounding reasonable about how the (stinking) rich and (obscenely) wealthy should make a “fairer contribution”, the tapping into the envy and petty jealousy that many folk have towards those that are better off than themselves was nauseating.

It was, frankly, the type of sloganeering that most depresses me about politicians.

A calculated piece of headline grabbing done to get the Liberal Democrat leader through his next party conference, appealing to the rank and file by attacking a minority – dividing the country by turning people against people, the have-nots against the haves – when he knows full well he will not deliver on the policy but will have saved his own neck until the next crisis.

And this is called leadership? Interviewed on the radio Clegg’s own treasury spokeswoman had to admit she hadn’t heard of the new policy of a temporary emergency wealth tax.

What a prize fool she must have felt, she certainly sounded like one, and all to make Nicholas William Peter Clegg feel better. Not the behaviour of a gentleman, methinks.

Not only was this a cack-handed example of grandstanding embarrassing his colleagues and being demolished within hours by the Chancellor, it did not even do what it says on 
the tin.

Clegg has said that a temporary tax on the wealthy was what was needed – but when he gave some detail to a friendly London paper it turned out the methods he was thinking of would require declarations of assets, form 
filing, record-keeping, administration, appeals processes, more administration – all before a penny was collected. Temporary? Aye, like the Liberal’s Rent Act of 1915 that lasted until 1989.

You see, if you wanted to bring in a temporary measure you would not bring in a new tax and all the necessary paraphernalia, including laws and regulations, and consultations with accountants and lawyers – you would simply raise one or more of the existing taxes and then reduce them when they were no longer needed or working.

In fact, this is exactly what the past Labour government did when it increased the top rate of tax from 40p to 50p – saying it was only a temporary measure until the recession was over.

The trouble was that the higher tax rate was becoming counterproductive, with a study estimating it was losing the government money rather than raising it as it simply encouraged people to change how they were paid or move away from Britain.

So what did the Coalition government do? Why, it reconised it was a temporary measure and that its time was up – and it reduced the rate, that’s right, cut the tax to only 45p.

And who voted for this? Why, of course, the Deputy Prime Minister did. That’s the same one who’s now saying – just before his party conference – that the wealthy need to be taxed.

Okay, you say, the man is a prize ass thinking he can fool the public when we can all see he’s a slippery hypocrite advocating one thing but doing another, but he has a point – we should be taxing the rich more.

Really? How much should the high earners really pay in tax? Have you any idea how much they pay already?

How much do the top one per cent of earners contribute in total to the Government’s income tax revenues? Five per cent? Maybe ten per cent? Maybe fifteen times their size?

No, none of these. The top one per cent of earners pay 25 per cent of all income tax the government gets. And you think it should be more?

And what share of income tax do the top ten per cent of earners contribute – a group that includes most GPs, headteachers and union bosses? Maybe thirty or forty per cent?

No, the top decile of earners pay 55 per cent, more than half of all income tax revenues. And you wonder why these people are fed up with all the waste they see in government and why so many try to legally reduce their tax bills?

The lowest ten per cent of taxpayers pay only half of one per cent of all revenues – so when it comes to fairness there’s no doubt the rich are, in fact, paying more. And then some.

The real problem about this idea of making the rich pay more is that the wealthiest people are also the most mobile.

They can live anywhere, go anywhere and have bank accounts anywhere. They can move quicker than the government can announce a tax hike and introduce it. And they do.

You don’t even have to go to the Caribbean – the flat taxes of countries like Estonia and Russia mean you can still have a European lifestyle. Not surprisingly, they also have higher economic growth.

If turning the British people against each other is the best a Liberal Democrat leader can do then his members must know that the time has come for him to go.