This is what makes me a lefty of course:
But guaranteeing a decent standard of living for those at the bottom of the heap should be the mark of a decent society.
I\’ve no problem with that idea: agree with it.
Having done so there\’s a few interesting little questions that we need to grapple with.
1) What is a decent standard of living?
2) How do we provide it?
3) How do we pay for it?
And the answers to those are what make people think I\’m a rightie even while I insist I\’m a lefty.
For my definition of a decent standard of living isn\’t in fact all that high. Not the decent standard of living that everyone else should pay for for you it isn\’t. In that sense I\’m rather Grandgrind.
How we provide it, I would much rather one simple payment to everyone, taxed back at higher income levels, rather than the current mish mash of what, 34 different possible payments is it? Further, once that basic citizens\’ income is paid, there\’s a decent tax free allowance above it. So that it makes sense for those doing the work to go and do even four hours somewhere at just about any wage. They get all of whatever is paid, whatever is considered to be the value of that work they do.
And it\’s how we pay for it that really makes me a righty in the eyes of the British Left. For the higher we make the amount of money being reshuffled then the more we have to go to a classically liberal system of taxation. If we have a highly progressive tax system trying to pay for high redistribution then we\’re going to kill off all hopw of economic growth. We\’re going to do right by the poor and unfortunate today at the cost and expense of all our children and grandchildren in the future.
The only way out of this is to pay for lots of redistribution through a less progressive tax system than the one we already have. That is, after all, how they do it in the Scandies. You know, the only places that manage high redistribution and economic growth?
Within the constraints of the tax system we currently have that means a high VAT on almost everything, the income tax system isn\’t hugely out of whack and much lower taxation of corporates and returns to capital.
Yes, this would be a more regressive tax system than we have: as is true of the tax system of Sweden just as an example.
So, the Worstall plan.
A cbi of £7,300 a year per adult. A £13,000 or so tax free allowance per adult. 40% income tax on all income over that. Abolition of corporation tax, NI, all and every scheme such as the old age pension, disability allowance, unemployment pay, housing benefit, the lot.
One complicating wrinkle: income tax becomes a consumption tax. That\’s how we tax returns to capital: you put money into your savings, that comes off your income before taxable income is calculated. You take money out of your savings (ie, spend capital) then that is added to your income to create your taxable income. One further complication: if you insist on retaining an inheritance tax then it\’s income (or capital) to the recipients, not taxed as an estate.
No, I\’ve not done the sums. Thjis might well blow a massive hole in the budget. But then that\’s what makes me a lefty: we need some fiscal stimulus, don\’t we? Might as well get it by reforming the system properly.