It did not take long in the current election campaign for the Conservatives to trot out the old myth of Labour being the party of high taxation while the Tories are “tax cutters by instinct” (Tories redeploy the ‘bombshell’ against Labour tax plans, 4 May).
It may be true to say the Tories favour unfair cuts in direct taxation, but this certainly cannot be said of their less progressive and equitable “instinct” of increasing indirect taxation. Let’s not forget it was Margaret Thatcher who raised VAT from 8% to 15% only weeks after denying there were any plans to do so during the 1979 election campaign, and it was George Osborne who raised it from 17.5% to 20% following similar denials in 2010.
Thatcher was fond of saying that Labour would spend until it ran out of other people’s money. However, looking at taxation as a proportion of GDP since 1979 shows that under Thatcher and Major (1979-97), on average the annual total tax burden was 35.23% of GDP. The total tax burden under Cameron and May since 2010 has similarly averaged 35.2%, while under Blair and Brown it averaged 35.1%, slightly less than the Tories.
Similarly, under the Thatcher and Major governments, spend averaged 43.5% of GDP and since 2010 has averaged 43.1%. Over the 13 years of the last Labour government spend averaged 39.5% of GDP.
So, far from Labour being the tax and spend party it is the Tories who have taxed at a higher rate than Labour and spent at a higher rate than Labour over the past 38 years.
Terry Kelly
Widnes, Cheshire
• Paul Mason’s call for a radical progressive tax policy (A Labour tax bombshell is a very good idea, 5 May) is welcome. He’s also right that the beneficiaries of Labour’s tax-and-spend policies can’t be limited to “the poor”. However, he ignores the extent to which people in poverty have suffered under the Conservatives and to which their numbers are likely to increase on current policies. His list of priorities includes pensions but not working-age benefits.
Likewise, all the talk has been about the future of the pensions triple-lock without any mention of the current freeze of most working-age benefits (affecting many in paid work as well as out of work). This is one of many damaging benefit cuts, imposed by the Tories, the more so as inflation rises post-Brexit. At least there was a promise of no more such cuts in the present parliament. But that parliament is no more, making social security vulnerable once again. At a minimum the Conservatives must be challenged to renew that pledge as well as lift the benefit freeze immediately to help avert potentially the worst increase in poverty and inequality since the Thatcher years.
Ruth Lister
Labour, House of Lords
• Paul Mason is surely right to say that the money to save the NHS and schools has to come from new taxes. There seems to have been remarkably little publicity for the announcement that the questionably named financial watchdog NHS Improvement is considering borrowing billions of pounds from private investment companies. The agency hopes that hedge funds could pay for new buildings, equipment and IT. This sounds awfully like another step towards privatisation. Apparently the rationale is that this move would make the most of low interest rates. Why should any payment of interest be contemplated when the sums could be raised interest-free by government? Labour should be shouting at every opportunity that if people want a properly funded NHS (and education system)there is only one way to vote.
Dr David Griffith
London
• There is one area of taxation that bothers me. I am 80 next month and for the past few years I have needed the expertise of the NHS, which will no doubt continue for the rest of my life. During my working lifetime, when I was fit and healthy, I paid national insurance but now I am exempt from doing so because of my age. Why? Surely all pensioners not on benefits should continue with a flat rate payment.
As we keep being told that there are more and more of us and we are the ones using the system, surely we should be sharing the cost if we can afford it? Also, a new Labour government should make sure that it is hypothecated. I have been told that very few people of my generation vote Labour, so I cannot see that this would adversely affect the party’s election success.
Furthermore, why has there always been a ceiling on national insurance payments? At the moment it is too low to stand beneath it.
David Beard
Burlescombe, Devon
• Thomas Piketty is not the only person to advocate tax reforms. In a global economy no one country can impose taxes unilaterally. It simply leads to money disappearing thanks to the absence of monetary controls, the financial sector and the use of tax havens, which our own governments sponsors. A few ultra rich can never provide enough taxes. But we need a fairer system. Of course we should introduce the Tobin tax to raise taxes from the one sector that can afford it. But outlawing tax avoidance and tax havens (believed to be sitting on $13tn) so everyone pays their fair share is necessary if our democratic societies are to survive. We should also cap the outrageous earnings in corporate and financial boardrooms and in sport which are not justified and stop allowing them tax breaks as well. All this needs a new breed of politicians who look at the future rather than work for the financial and corporate sector.
Peter Fieldman
Author of The World at a Crossroads
• Theresa May promises not to increase VAT, but signals rises in national insurance and income tax (PM paves way to end key tax commitments, 1 May). Although VAT is called a regressive tax because the poor spend more of their income than the rich, at least we all pay it equally. Not so the other taxes.
For the rich, income tax is optional – they can shelter their income offshore in trusts or take it from their companies as dividends, taxed at a lower rate than earned income, or as capital gains such as share options, taxed a much lower rate. And the rich pay national insurance at 2% on taxable income above £45,000 instead of the 12% that lower-paid “working families” pay. Then there are companies whose staff are self-employed, who don’t pay the employer rate of 13.8% that proper employers pay, and the self-employed themselves whose complaints about paying more caused such a stir recently.
We could hope Mrs May will fix these inequalities, but I’m not rushing to call the accountant.
Richard Cooper
Chichester, West Sussex
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