Articles tagged with: Polly Toynbee
The consensus seems to be that New Labour is as dead as Cameron’s Conservative modernisation project. Desperate times have reawakened ideology from a generational slumber, so we are told. Labour are a party of social justice, prepared to openly advocate higher taxes for the rich. The Conservatives seem to be shifting rightwards in opposing this. All of which delights Polly Toynbee. Only one dark cloud on her horizon: “the VAT cut will help the poorest least”. Presumably, she would prefer the Liberal Democrat plan to lower the basic rate of income tax from 20p to 16p in the pound. However, this analysis ignores the point made by Tom Copley: “indirect taxes, favoured by Thatcher, always hit the poor hardest”. Thus, lowering indirect taxation helps the poorest the most. This is because a larger proportion of the incomes of the poor are taken up meeting VAT than is the case for the rich. In essence Labour are reversing the direction of taxation under Margaret Thatcher. She raised indirect taxation, Darling lowered it. She cut direct taxation on the rich, Darling promised to raise it in 2010. So ideology is back. But the consistency of the VAT cut with this return to ideology seems to have been missed. Consequently, we might see it as the last stealth tax. There have been a range of redistributive stealth taxes deployed over the past 11 years and we should add yesterday’s VAT cut to this list.
