Lib Dems move the tax deck chairs around

I hardly know where to start with the latest Lib Dem announcement on taxes. Apparently they want to pretend they can just cut 2p of income tax (£20bn) and introduce higher taxes on polluting cars and hit the rich with super taxes (disguised as an ending to Capital Gains tax allowances). Of course as the BBC reports he is not prepared to say who the "very wealthy" are. And it's alright for Ming, he is wealthy enough just to dump his Jaguar. Many of those on low incomes are those with the most polluting cars and they cannot just change their cars overnight.

The trouble is when you move away from income taxes to sales taxes (which is what, in effect, the polluter tax is) then you run the risk that the tax yield will decline. IF the aim of the greener tax regime is to get people consuming less - as it should be - then you obviously want consumption, and thus taxation, to fall. And of course if taxation falls you then need to cut services. The Institue of Fiscal Studies has commented that :

"One dilemma they face here is that the more successful
environmental taxes are in getting people to pollute less and getting
people to drive less, obviously the less revenue you get in. That means higher tax rates for everybody who still ends up paying them."

As for taxing the rich, well the examples we have had of this is that the rich are those most able to find loopholes and move their money overseas at the threat of higher taxation. So the inevitable consequence of this proposal is a lower tax yield and cuts to services that will hit the very people you should be trying to help; the poor. What happened to the pledge to have a local income tax? That was going to cost everyone in Kingston a fortune.

George Osbourne, Shadow Chancellor, has commented:


"They are based on such flimsy costings - they
could only be produced by a party that knows it is never going to have
to introduce a real budget. It is not a serious piece of work."

Given the party now believes that lower taxation is good I presume we can now look forward to Kingston Lib Dems cutting back on their exorbitant spending and getting Council tax down? Where does this new belief in lower taxes sit with them blowing £6m on Kingston theatre?

I am afraid this whole proposal just looks like spin. As David Cameron said today: "I don't think making the top 1% richest poorer makes the 10% poorest richer." How right he is. You would have thought the Lib Dems would have learnt the Conservative lesson that going in to elections trying to cut taxes does not win elections!