News from the New Party

Thursday, July 12, 2007

Nearly liberal

Liberal Democrats reducing taxes? It sounds too good to be true, and of course it is. The plan to knock 4p off the basic rate of income tax is eyecatching enough, especially coming from the last party to hold out for a 50p tax band, but there is of course a catch: or more precisely, a whole raft of them.

The Lib Dems are still threatening us with a Local Income Tax in place of Council Tax. While this is superficially attractive, in practice it is likely to be even more of a burden on the local taxpayer than the current system - and that's saying something. And although the party claims to be seeking to reduce the tax burden, it admits that overall its proposals will be tax-neutral. In other words, the money they won't take off you upfront through PAYE will be taken by stealth in other ways - by "making the rich and people with environmentally damaging lifestyles pay a fairer share", as they put it.

So if you drive a car, the Lib Dems will clobber you. Fuel duty will be pegged to inflation, and road tax for high polluting cars can be expected to soar (and as "hard-working families" everywhere know, a tax on large cars is effectively a tax on children). Similarly, if you like to holiday in the Mediterranean, expect to pay through the nose. Taxes on air travel are also on the cards.

Fuel taxes and local income tax will hit ordinary people hard. So just to be "fair", Sir Menzies is going to hammer the wealthy as well:

"The unacceptable reality is that in Britain today the poorest pay a higher proportion of their income in tax than the super-rich."

Poor old Ming, still having trouble with that "liberal"/"socialist" thing. There is a better way to bring fairness into the tax system: flat rate taxation with a generous personal allowance to keep those on low incomes out of income tax altogether. It's not rocket science, which given the Lib Dems' enthusiasm for fuel taxes is probably just as well.

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