Samizdata

It is hard for us (as libertarians) to understand just how radical even freezing government spending in real terms is. The UK Independence Party policy on government spending is, by modern standards, very radical [pdf document].

The UK Independence Party will tomorrow (3rd October) announce a 33 per cent flat rate income tax for all, including National Insurance contributions, as part of a sweeping tax policy review. The review includes increasing the level that can be earned free of tax to £9,000, scrapping the loathed inheritance tax altogether and reducing Capital Gains to 33 per cent. Party Leader, Nigel Farage MEP, will throw a challenge to Tory Leader David Cameron by setting a clear tax cutting agenda that will attract many members of the Conservative Party.

[…]

UKIP Economic spokesman, John Whittaker MEP, said: “The country does not accept the argument that improvements in ‘front line’ public services require ever-increasing Government expenditure. Huge sums of money have been poured in but have not improved services proportionately to the amount taxpayers have paid and have a right to expect

The last time there was anything like this was 1976-1977 when, under IMF orders, the brakes were put on UK government spending. The situation by the time of the next General Election will be similar (vast government spending and an exploding (13.7% ‘broad money’ growth at the moment) money supply, or in ‘modern’ language an ‘expansive fiscal and monetary policy’, having undermined the economy) – so the UKIP is being farsighted. Clearly they think that economic breakdown can still be avoided (and in technical terms they are correct – although the culture may have decayed to such a point that avoiding collapse is not ‘practical politics’).

As for unifying the income tax and ‘national insurance’ systems – Australia and New Zealand did this long ago. National Insurance is a tax, it is not a ‘contribution’.

A flat rate income tax makes good administrative sense and getting rid of the top rates of income tax would indeed stimulate the economy and benefit everyone bar tax lawyers. Getting some poor people out of the tax system would not boost revenue – but it is a political price one has to pay for getting rid of the 40% rate. Of course I would like to see a lower overall rate than 33% – but one must remember that there would be no ‘national insurance’ tax anymore. Also, if the poor no longer paid income tax, there would be no excuse for Mr Brown’s wildly complex and expensive ‘tax credits’.

Getting rid of the inheritance tax is a logical move already done in Canada and other nations. Inheritance tax just encourages people to spend their capital (and then live off the state) – rather than invest for the long term in the hope that their children will see the benefit.

It is sad that the absurd Capital Gains Tax is to stay – cutting it is good, but it is a mad (and hard to administer) tax that causes great harm.

Converting the wildly complicated and open to fraud VAT into a sales tax is a good idea (and they are correct that this is not lawful under EU law). However, making the new sales tax a local tax would mean an end to the Council Tax (which would be popular) and one could get rid of all national government subsidies to local government as well (which would allow a reduction in the combined income and social security tax).

Overall a ‘good as far as it goes package’ – certainly vastly better than the increasingly ironically named ‘Conservatives’ whose shadow Chancellor said on BBC Radio 4’s Today programme that it was “unlikely” that he would put UP taxes… but would consider it.

The media are going all out to boost Mr David Cameron (the leader of the British Conservative party). The Daily Telegraph newspaper has a front page story about how people are paying tens of thousands of Pounds to have lunch with Mr Cameron or one of his associates and how this proves that Conservatives are becoming popular (this is in the face of a declining party membership, only a quarter of whom bother to vote on the meaningless documents that are put in front of them, and opinion polls that state that about 38% intend to vote Conservative – out of the just over half of British voters who are likely to vote at all).

The Economist runs an editorial about how Mr Cameron should strip local Conservative members of what little choice they have left in choosing candidates, and how he should give up even his token policy of removing Conservatives from the ultra pro-EU European People’s Party group in the ‘European Parliament’ and totally submit to the EU in all things – oh sorry, how Mr Cameron should seek ‘influencei in the EU.

The Spectator magazine has, as its cover, a drawing of Sentator John McCain crowning Mr Cameron as King (which might interest the Queen) and, as its main story, how Senator (death-to-the-First-Amendment aka ‘Campaign Finance Reform’) McCain supports Mr Cameron.

And (of course) the BBC is still boosting Mr Cameron at every opportunity. Today Mr Cameron was given air time to explain that members of Parliament should be stripped of the power to set their own pay, and how elected governments should be stripped of power to give out honours (all those CBEs, OBEs, Kighthoods and even membership of the House of Lords) – both tasks should be done (according to Mr Cameron) outside of politics (i.e. most likely by the ‘great and the good’ who would, no doubt, give MPs even more money and make sure that no non-statist ever got an honour of any kind – certainly it would be an end to the chances of those free market types that Mrs Thatcher sometimes put into the House of Lords).

Whilst no fan of MPs getting paid lots of money (I would have been against the 1911 move to pay them at all) and no fan of how governments (especially the government led by Mr Blair) are alleged to sell honours in return for campaign money – I do find it ironic that Mr Cameron was flanked by ‘Ken’ Clarke when he launched his attack on democratically elected people deciding such things. Mr Clarke is Mr Cameron’s man in charge of producing policies to make democracy stronger and (especially) to restore power to the House of Commons.

This is ironic in its self – as Mr Clarke has a fanatical hatred of the powers of the House of Commons (of which he is a member) and wishes as much power as possible to go to the European Union.

But then Mr Clarke has just been put in charge (by Mr Cameron) of finding ways of carrying out the plan to strip elected people of both responsibility for the pay of MPs and for the honours system.

And Mr Cameron himself (with the strong support of the Economist) is busy destroying (in the name of democracy) what little democracy there is in the Conservative party and has already failed to carry out his leadership election promise to pull out Conservative members of the European Union Parliament out of the (pro-EU and anti-British House of Commons) European People’s Party group.

I can only conclude that Mr Cameron has no sense of irony.

Moonbat Media have some good pictures from Saturday’s demonstration in Manchester by the usual suspects… plus some coverage of an incident where Reza Moradi and a friend were removed by Stop The War organisers because they staged a counter-protest, interrupted Tony Benn’s speech. Check it out.