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Taxes to increase for 50 years?

There has a been a Treasury report indicating taxes will increase for the next 50 years. If that does indeed come to pass it would be, to state the bleedin’ obvious, a Bad Thing. However that is really not what I want to comment on, but rather…

Last night the Conservatives said the 3.2 per cent increase was equivalent to just over £40 billion in today’s prices or 11.5p on the basic rate of income tax. [...] The Conservatives said the Treasury figures exposed the true cost of Mr Brown’s policies, in particular the failure to ensure that taxpayers were getting value for money for the extra spent on schools and hospitals.

Now talk about having your cake and eating it too, or more correctly having our cake and eating it too. Such remarks by any Tory commentator are obviously predicated upon an assumption of wishful thinking and a mayfly-like memory amongst their intended audience. Does anyone remember ‘Dave’ Cameron’s plans to confiscate and redistribute wealth? Or add more expensive ‘green’ regulations to govern people’s lives in order to pander to the voodoo science of the enviro-mentalist lobby? The notion that the Tories are a lower tax/less regulatory alternative to Labour is preposterous if the words of the party’s leader mean anything whatsoever.

So how can a ‘Conservative’ spokesman keep a straight face and claim that rising taxation is a facet of Labour governments when ‘Dave’ have been going to such lengths to make it clear his Tory party represents continuity with Labour’s ideology of authoritarian centrist regulation? If all the UK does is continue to alternate between largely identical Tory and Labour governments, Britain really can look forward to fifty years of increased taxation and the economic and social decay that will bring.

Fortunately I do not see either party lasting anywhere near that long as dominant political forces.

18 comments to Taxes to increase for 50 years?

  • guy herbert

    Well they are correct in their diagnosis – it is the off-balance-sheet financing of roaring public sector capital spending under PFI which is the cause, and that’s why the Treasury would like to think we’ll be paying for 50 years. The Tories’ failure is not to explain the problem properly, and not to have given a clue what they might do about it.

    Nationalisation or cancelling the insane contracts by statute seem like the only options.

  • Fortunately I do not see either party lasting anywhere near that long as dominant political forces.

    Agreed, but I suspect that would be becaue of an implosion of UK PLC and the absorbtion of the UK into the EU regions as an impoverished outlier (1STG=0.13EUR) than any hope of voter rebellion. The frogs are already in the pot and the temperature has risen such that higher brain functioning has ceased to be present in any meaningful way.

    All is not lost, but the lies need to be communicated.

    I have just entered “Second Life” and I am wondering if this could be a platform to promote the Libertarian message and even wake up the playstation generation to the horrors of Statism.

  • Brad

    Fortunately I do not see either party lasting anywhere near that long as dominant political forces.

    But only after what? A painless transition to a libertarian wonderland and pure markets or a painful economic implosion? Speaking for the U.S., we seem to get more Statism as people perceive their lives are worsening. By and large people are living well with high comsumption, relatively low taxes, and mind-numbing debt. Soon, people will start feeling the pinch when needs become more expensive and fear as to how their future expenses will be paid (e.g. medical). So they will buy the next increase in taxes and regulation, hoping they will fall mostly on the other guy, and yet more. Only then, after they have given much more freedom for (economic) security will they see what a house of cards it is.

    I cannot help but believe that people will not wake up until it is much too late, and the severe misallocations that have taken place will rebound immediately with catostrophic consequences. Certainly the old political formulas will wash away, but not before painful lessons have been learned and irreparable damage has been done to everyone, especially those who have built equity sanely and with purpose.

  • But only after what? A painless transition to a libertarian wonderland and pure markets or a painful economic implosion? Speaking for the U.S., we seem to get more Statism as people perceive their lives are worsening.

    Who said anything about painless? You need to have lived in the UK in the 1970′s to see why things need to get worse before they get better.

  • Perry E. Metzger

    The great Milton Friedman used to make a point of saying that the question was not why most people live in repressive environments — that has been the norm for most of human history. The question is why, in a few small places for short times, freedom flowers.

    I think Margaret Thatcher was in an unusual position at the end of the 1970s. In most instances, I would have expected the result of the 1970s crisis in the UK to have been the takeover of the state by even more radical statists, either fascists or communists of one stripe or another.

    The fact that this wonderful anomaly struck and someone willing to dismantle a small fraction of the state apparatus took charge should not, I think, be used as a model for the future. Worse does not always lead to better. It often just leads to even worse still.

    It is much more frequent that economic collapse leads to the rise of folks like Hitler (or more mildly FDR) than for it to lead to renunciation of the state. The reason for this is straightforward — after centuries of indoctrination, most of the public believes in the state the way that medieval peasants believed in the mother church. If the state fails, it must, in the reasoning of most people, be a lack of sufficient force being applied — the answer must be more regulations, more intervention, and more repression. The idea that their faith itself might be defective is not even on the table.

    I will opine, pessimistically, that I do not see this changing soon. I wish I had a magic formula to offer that would lead to a libertarian world, but I do not. My hope is that, within the next century, technology may give us new opportunities to escape this cycle, but I hold out little hope for the next decade beyond holding actions.

  • Nick M

    Perry (Metzger),

    You really can depress me, especially when you’re right. I have very dim memories of the 70s – three day weeks, major department stores lit up by candle-light and a few other things like that. So, it’s gonna have to get that bad first? I hope that won’t be the case but I suspect we’re going to have to hit rock-bottom again…

    There are two things that really worry me. The first is the number of Government employees doing utterly pointless tasks – outreaching and co-ordinating mainly – and I fail to see how growing armies of them does anything for the economy.

    The second is farcical credit. DfS are currently offering 700 quid sofas on 3 year “free”-credit deals.

    One day the reckoning will come for a nation made up of Blairite drones doing nothing to the purpose and buying things on tick.

    It really scares me.

  • The Wobbly Guy

    Folks, it’s human nature. People will want something for nothing, and not realise they’re the ones paying the price. Never underestimate the stupidity of the people.

  • The Last Toryboy

    I don’t know, Perry (Metzger). Poor economic performance leads to extremism (however that is defined) as people get sick of the status quo and are willing to resort to tactics usually considered beyond the pale. Desperate times lead to desperate measures, and all.

    Have a little faith. Hitler is only one example, albeit a famous one. In Spain at least hardcore libertarianism (which I don’t necessarily agree with) was the extremism they picked. It could be anything, not necessarily fascism.

  • Just look at the history of the last 200 years. Clearly we have had crises aplenty, yet also quite clearly they do not always lead to more statism… the tides come in, the tides go out. Yet the underpinning assumptions (“meta-context”) that individual liberty matters has probably never been so widespread in modern human history at this point in time. Moreover a reasonable analysis of the implications of what technology (i.e the internet) makes possible suggests to me (the whole dis-economies of scale thing) that we are headed for a long term era in which individuals can empower themselves in ways enforced collectives simply cannot match. It will be a rocky ride of course but I reckon 20 years from now people in what then passes for the mainstream media (which will look pretty different methinks) they will actually be agonising over the impossible to ignore fading trappings of Westphalian sovereignty, the EU will have fractured into irrelevance and UN will be in its death throes… Sure, states will still exist but they will simply not be able to do many of the things they do today due to the twin pressures of globalised flows of capital and the end of the asymmetry of information favouring big states (and big corporations that support states).

    The future will not be ideal or any sort of utopia but I think it will be better (i.e. freer). A lot better.

  • I am glad you think that, Perry dH. Yes, the media is changing and the people will not be so easily forced. The issue is if people need to be forced in the first place.

    It is not just media, but education. People tend to listen to what reinforced their views and if their views on leaving education are one way, it will take alot to shift the majority.

    Luckily, we are, perversely, “blessed” by such an appalling Government and an abysmal “opposition” and the eternal blessing of geography in the UK. The turn will not happen by itself, via some form of osmosis, but it will need action and energy to counter the entropy we are experiencing. The boilling frogs need waking from their torpor.

  • I’m not too worried.

    Ayn Rand got it mostly right. When governments get greedy, Atlas does shrug–he just doesn’t bother with the 80-page speech. Capital just slips quietly offshore. Powerful stupid governments either lose power, because capital incorporates in greener pastures, or else stop being stupid.

    Global capitalism will march on, with or without the US or UK. All dreams have to end sooner or later, but I don’t recall the balance of power ever favoring global financial markets versus government, at least not to this extent.

  • Paul Marks

    “50 years”?

    The Welfare State will have either been rolled back by reform, or it will have collapsed – long before 50 years time.

    Of course whether it will be reform or collapse is the big question.

    As for the United States (where government spending on what used to be called “health, education and welfare” is NOT vastly less than other Western countries).

    Taxes “relatively lower” – I suppose so if one is comparing them to the huge level of taxation in some other countries (such as Sweden – which avoided the vast waste of capital of both world wars and post WWII conflicts and so operates, to some extent, in a different context to the rest of us). However, Federal, State and local taxation (even as a percentage of G.D.P.) is very close to an all time high (although taxes were higher during World War II).

    The Bush tax rate cuts produced more revenue (as cuts in the higher rates of various taxes normally do), but the left still want them reversed – not understanding that this would mean that the government got less revenue (or at least not as much new revenue as they expect – and a drain on government spending from the economic damage that higher tax rates would do).

    However, the comment above was quite correct. There are lots of Americans who support the sort of politics represented by Mrs Clinton in the North (a classic “social gospel” Progressive – the government is God) and John Edwards in the South (a classic Popularist) – ever greater and ever more Welfare State schemes.

    Well they will have their last big attack in 2008 (40 years on from the international “youth quake” of ultra collectivism). Well if the left win in 2008 they will have their last great orgy of taxes, welfare state expansion, and regulations – and the economy will decline (it will be helped over the cliff by the credit-money bubble finally collapsing, which it must do at some time or another).

    The key question is “what happens then”?

    Will the majority of Americans think (or be led to think) “on this 80th anniversary of the election of F.D.R. [2012] we must have a more active government to get America moving again” – in which case there will not just be more economic decline, there will be an economic and social collapse and, given how society has changed over the decades, things will get very nasty indeed.

    Or will a majority of Americans come to the conclusion that “big government does not work”?

    Oddly enough I suspect that most Americans will come to the second position and that there will be real reform after 2012 (assuming there is not after 2008 – and I do not even think that this election is very likely to go to the left).

    I am not normally accused of being an optimist, but I do not think that the United States is finished yet.

    As for the United Kingdom……. well those alive will see which way it goes (I make no predictions).

  • Nick M

    Paul,
    You’ve made your “2008″ is the last hurrah for US big government before. I think your analysis is basically sound except… Over the years the left has changed it’s spots often enough. I don’t think they’ll be finished regardless of what happens in 2008 or 2012. Where there is a third way, they can find a fourth. The “left” is not just a collection of fellow travellers whose bandwagon got rolling with K Marx esq. It is a general mindset which goes back to the first time Ug started banging the rocks together. It is, indeed, a meta-context.

    Perry,
    The UN is already well past its death-throes. The ECG has flat-lined though the corpse is still warm. Does anybody give a toss about UN resolutions? The lie of the UN concept is now laid bare. Power resides where it always has, with the powerful. The sooner the US and UK leave the whole sorry mess behind the better.

  • Michiganny

    We all need to plan for the future. To have any hope, we need to make predictions. Failure to do so is foolish. However, failure to pretend even for a moment that our crystal ball works fifty years out is just as foolish.

    It cannot be done. Look at what the United Kingdom went through from 1906 to 1956. Do you think any political hacks correctly got two world wars, the decline of manufacturing, the end of the British Empire right? I get the impression those altered tax rates a tad.

    Thank goodness a Treasury spokesman said, “In no way does this report set in stone tax rates for the next 50 years.” What a relief.

  • I rather thought that it was Parliament, elected by the people, that set the levels of taxation.

    The Treasury is “ultra vires” on this.

    Might that be maladministration?

    Best regards

  • lurker mk.3

    Ever rising taxation levels, and ever diminishing liberty, are a facet of any government that fails to keep its population away from personally destructive behaviours: financial profligacy, substance abuse, laziness. The debilitated, broke, mentally unstable addicted creatures which then spring up where once were men then heckle, pester and agitate (and being jobless they are uniquely positioned to engage in such activities) for ever more benefits to subsidise their feckless lifestyles. When do-gooders steal yet more from the pockets of the provident to transfer to the degenerate, we see more and more become incentivised to engage in such lifestyles, and so the rachet continues. Thanks a bloody lot, Sexual Liberation, Drug Law Non-enforcement, and Experiment Encouragment for this Tyranny. Thanks a bloody lot Libertarians.

  • Wrong on every level. The decay of civil society is above all down to the regulatory state replacing long standing social pressures and norms with politically derived regulatory formulae. Hell, the welfare state, not exaclty a central plank of libertarian thinking, in effect subsidies self-destructive behaviour.

    Every time fools such as yourself calling for the state, of all people, to “keep its population away from personally destructive behaviours”, you end up with exactly the opposite effect.

  • lurker mk.3

    Deleted

    (Btw, I’ve got this comment saved and will post it eslewhere, so don’t you pull any of those libertarian censoring tricks on me).

    What a strange threat. Actually the reason I am deleting your comment was not because it was vastly off-topic (though it was) but rather because you think you can demand to set the editorial policies on this blog. Yes, feel free to post your remarks elsewhere other than this particular bit of private property (a concept you clearly have difficulty with)