The Policy Blender

Excellent - we should burn one down in Harry's honour.

I'll bang a few elixirs back this evening in the young Gryffindorian's honour...

www.conservatives.com/ has got the Cameron gloss already…

You mean it doesn't work? (Try the link, I think there's a typo in it...)

Oops! Try this

Our friend Jonathan Freedland writes today in The Guardian: "Enough of this love-in: Bush was a compassionate conservative too... David Cameron's record - and his neocon friends - reveal a man of the committed right beneath the glossy, liberal veneer." Remember neocons are scary. And they live under your bed. Be sacred, good people. Woooo.

This is the same Guardian that yesterday had Polly Toynbee telling us that "tax and spend is where the political fight is" pointing out that everyone wants to be taxed and have the government spend their money for them…

The Guardian undeniably has its merits, but sometimes I wonder what planet these guys are on…

The same planet as their readers, the planet where Bush is the bad guy, cause he attacked Iraq on the grounds that some guys who were a similar colour to people in Iraq flew some planes into some buildings. Or oil, or any of those other reasons that the Guardian will continue to maintain were behind the war in Iraq.

And I have to say, if there's no tax at all, there's nothing for the Government to spend, so there's not really a government, is there? So how much tax we're charged and what it's spent on is politics, and therefore 'where the political fight is'. It's a remarkably obvious and rather dull thing to say in itself, but it's not wrong.

So they're all on this planet, they're just running out of new, interesting things to say. Should we expect David Cameron to provide them with new interesting things to say in the next few weeks? I hope so, for the sake of the Conservative Party, and for politics in general in this country, because another strong Labour Government might actually be a disappointment, even for a moderate lefty like me.

"I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

- Winston Churchill

Why quote Winston on peacetime politics? He won a war, was a national hero and the saviour of a nation and he still lost the 1945 general election. Here's a quote about him, from the man who won. "Fifty percent of Winston is genius, fifty percent bloody fool. He will behave like a child."

It is true that if you can't attack what someone is saying you can only attack the person saying it...

That's if you're after arguing for argument's sake, of course.

I think it's also true that if you can't argue something for yourself you can quote someone else doing it. Though I'm sure you're capable of arguing something for yourself.

Plus the quote seems to be against excessive tax, not against tax altogether. So we can get rid of the quotes and the insults and just talk straight. Are you proposing that anyone who believes there should be any tax of any kind is wrong? Do you believe the nation would be more prosperous if there was no tax at all?

Otherwise, Polly Toynbee is merely boring, rather than stupid (and I guess, by extension, so is the Guardian). But if you're proposing no tax at all, she is both.

I realise that last bit needs to say 'you tihnk she is both, and we still have an argument' - cause as it is, it assumes that by proposing it you've proved it. This is why I wasn't in the debating society at University. That and the fact that my band rehearsed on the same night they debated.

Of course I'm not against tax; otherwise I wouldn't have stated my support for tax benefits for married couples in a thread below.

In that thread, I mentioned that "tax is rubbish". Like capitalism, it's not a perfect system, but it's the best we have. The best system we have for raising revenue for public spending that is.

Tax is necessary because it maintains a direct financial link between the electorate and the executive who spend money in their behalf. In this way it supports representation and therefore democracy.

Although it is important, the taxation system has been abused by politicians of all parties for thousands of years. Tiberius granted a tax exemption for the poor and tax credits in the form of wheat for the homeless. Caligula excluded Jews from this exemption. Both moves were political albeit that one was noble and the other not.

Tax shouldn't be complicated. The current taxation system is really complicated so if you don't understand it you pay a higher rate. The only real beneficiaries of our hugely complicated tax system are the super-rich, who can employ expensive tax accountants to find the loopholes caused by the complexities to make them pay less in percentage than the very poorest taxpayers. And the expensive tax accountants gain too, obviously. And the politicians gain, because on paper they look like they are punishing the better off, which is always a vote winner with the less better off, even if it isn't actually the case in practice.

That’s not to say that uncomplicated tax systems are always fair. The medieval tithe was incredibly simple and incredibly unfair. It crippled some communities, particularly following bad harvests.

The exception to the rule that complications are generally bad is the mechanism that would have saved some of the communities that were destroyed by the tithe. A threshold ensures that those who don't have enough to get by don't get shafted by the taxation system.

But thresholds, too, are abused by politicians. The justification for a threshold prevent the taxation system from abusing the most disadvantaged in society should by definition not extend to protecting those who are slightly less disadvantaged, and slightly less disadvantaged than those still. Again, the beneficiaries are the politicians, who can claim to any group in society that they are not victimised by the state to the same extent that someone with slightly more than them is.

Having a threshold in a taxation system demonstrates that even the state can be compassionate. It is the role of any society to support its disadvantaged, as much as it is to encourage the success of its most promising.

With this in mind, it would seem reasonable to take those who we deem financially disadvantaged enough to grant tax credits to out of tax altogether. Currently the (first) tax threshold is around £12,000. That's a little low. Let's make it £20,000, or even £25,000. That should give everybody a decent career start, and a chance to make a life for themselves without the state removing part of the fruit their labours and spending it on someone else instead.

Obviously, the state will still spend revenue on social security, for those disadvantaged to the extent that they cannot work at all. But surely it's more efficient to leave the money in people's pockets than to take it from their wage packet, pass it to civil servants and then give it back again in kind. To this extent, the tax credits system looks like a massive work creation project for civil servants - moving money around in circles. Why tax the people that tax is supposed to benefit? The lunatics are running the asylum over at Her Maj's Customs and Revenues.

Doubling the tax threshold will clearly have a net effect on revenue. This could be recovered by taxing the super rich people a fair amount. And getting the rich to pay their fair amount can be done by getting rid of all the rules that relate to exemptions or credits (all the people those are philosophically designed to help are helps by being under the raised threshold) and any other rule that says people should pay a different amount of tax depending on circumstances. The effect of such rules is simply to make people look for ways around them. This, as I've already established, is something that the rich are better equipped to do as they have more resources at their disposal.

I'm taking, of course, about flat tax (yawn, here he goes again). The stigma attached to flat tax is simple - the rich gain. For the reasons discussed above, this is not true as a general principle. Sure, some people will be better off as a result of paying the same percentage of tax as everyone else, but they are still paying more. 20% of £75,000 is more than 20% of £15,000. And at the end of the day, our chap on £100,000 a year is probably currently paying less in tax than our chap on £40,000 - if he's savvy enough to be paid 100k a year, he's savvy enough to maximise his take home pay (again, see above expensive accountants example).

So net yield will go down, but not by that much because we'll finally get the uber-rich to start contributing too. And we'll be spending less on administration. I mentioned earlier that currently money is taken off people, passed around amongst the civil servants and then given back in kind. Civil servants, and the buildings they work in and the support networks installed around them, do not work for free. The entire structure is funded by revenue from taxation. This means that there is a net loss from tax-in in terms of revenue to tax-out in terms of social security.

I sat next to a flat tax advocate at a dinner last week. He owns an accountancy company. I asked him the obvious question, the one about turkeys voting for Christmas. He replied that far from being out of work, his firm would be able to get on with their actual job: giving financial advice, rather than engaging in the bureaucratic activity of chasing ever-moving tax avoidance loopholes.

I know it's not popular, and I know that people don't like the idea of the rich not being taxed disproportionately more (I believe that Chris used the phrase 'exploiter' with reference to somebody that earns proportionately more than him to support his view that they should be taxed disproportionately more than him).

But that's my view. Tax is necessary, but it is currently unjust and its in-built complexities act as a disincentive for people to contribute to social security and focuses energy on maximising avoidance rather than maximising gross income. The former hurts the state, and by proxy the poor, the latter swells the exchequer, and by proxy helps the poor.

you did ask

I did, and I have a sore finger from rolling up the entry with my browser wheel. But it still doesn't explain why Polly Toynbee is stupid. We still need tax, and if we need it, we need to spend it.

I'm not sure I'm suitably qualified to explain why Polly Toynbee is stupid, though my point was and remains that people don't want to be taxed more and Polly is on a different planet if she thinks that the political fight is there to be won on a tax and spend platform.

It's quite clear that's not where the fight is at all, because New Labour have stealth taxes instead of income tax increases and have re-named spending 'investment'.

If you want a quick and dirty barometer for the political culture of a time, you can do worse than look at the public pronouncements of New Labour. What they do is another matter, and it's quite obvious that they are tax and spenders when it comes down to it. But outwardly could you imagine Blair saying "I want to increase tax and spend more public money"? Faced with a question that should end in that as an answer he'd say "well, look, you know, it's about investing in services…"

It means the same thing to him, of course, but it also proves that tax and spend is undeniably not where the political fight is.

So I guess, yes Polly is crackers.

Sorry about your finger.

Let's try another tack. If they're obviously taxers and spenders, and they've got through three general elections unscathed, practically unopposed...

Ah, ok, I see your point. The political fight is probably in not pinning your entire campaign on whether we keep the pound and whether johnny foriegner should go home.

(I conceded with an insult to try and save face - did it work?)