Thursday, 23 April 2009

A Prudent Tax System

Kenneth Clarke is on Newsnight (20th April) telling us that the Conservatives would be prudent with our taxes. He doesn't know how he is going to raise taxes when asked by Jeremy Paxman. Ken is looking for prudence and tells us we should not be confident about the economy until there is something to be confident about. It's the opposite of FDR's (see the 'recession or depression' blog on the 11th April) speech which tried to get the economy going by lifting confidence.

What does prudence mean? Does it mean sacking Government employees? Does it mean cutting the role of government? Does it mean cutting MPs' expenses? It is a vague statement which says vote for us and we will lower taxes. Our tax system is not fair. A naive opinion would be that tax is present in order to redistribute wealth in the direction of the poor. What actually happens if that the rich pay proportionately less tax than the poor. We live in a strange system that allows our pop stars to live in tax havens and pay a much smaller percentage of tax than those with low or middle incomes.

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