Let it never be said Samizdata does not listen to its public. I am sure the sainted editors would prefer me to add at this point that we reserve the right, however, to listen carelessly and ignore your views if it suits us. Be that as it may, I was at the Adam Smith Institute’s Tax Freedom Day celebrations this evening, and one of our readers, having said some very complimentary things, made a rather brilliant suggestion that I am now going to steal.
Inflation, we are told, is at a long-term low, because of that nice Mr Brown’s prudence. My friend points out however, that part of Mr Brown’s prudence has been prudently to exclude from many of his more interesting taxation devices, the items forming the Retail Price Index. He proposes a new index, of all those items whose prices the Chancellor controls because their consumer price is largely duty, or because they are practical necessities for most people whose price is directly set by the government. The latter are excluded from RPI by definition and the (plausible) suggestion is that such prices have risen very fast indeed.
The Gordon Adjusted Price (“GAP”) index would explain where your money goes, and why so many people find their pockets emptier despite notionally higher incomes and low inflation. It might make visible some of those hidden taxes. I have a hunch that the cost of living is actually falling in Britain, but the cost of government more than takes up the slack. Is it true? The GAP might provide a measure.