Ted Yarbrough is studying law, and blogs as Texan Tory. He has written a thesis on Thatcherism’s effect on British culture.
If there is one accomplishment from 2013, and roaring ahead into 2014, that Conservatives can take pride in, it is the remarkable and unpredicted economic turnaround of the United Kingdom. The UK now has record employment growth and is the fastest growing economy in the developed world. It is on pace for a balanced budget by 2018. The legacy of this government, if it is able to see through its changes, will be less people on benefits, more people working, a very competitive nation that attracts investment because of less red tape, a fracking boom and lower taxes. Take note that the reduction of regulations would be a first in the modern government era.
Labour, by contrast, offers the British public absolutely nothing. The Autumn Statement embarrassed “Red” Ed Balls: their predictions on the economy have been about as accurate as preachers who claim to know the date of apocalypse. After opposing everything from welfare caps to spending cuts to tax cuts Labour’s grand solution is….a 50p tax rate! That policy is economically illiterate and is about as pro-business as Kim Jong Un is pro-democracy. There is no point to a 50p rate other than punishing those earning high incomes for the crime of being successful and generating money into the economy. And this policy won’t even achieve greater tax revenue. It will discourage investment, too; for proof look no further than France. So let’s all work to make sure that team Ed never gets close to Downing Street.
However, if Conservatives do win in 2015, what should their next step be? I understand Osborne’s desire to “fix the roof while the sun is shining”. A balanced budget would do much to restore Britain’s credibility in the world and show it has a government that is serious with its taxpayers’ money. But what should happen when the roof is fixed?
I argue that the best way to ensure financial stability is a secure government with a fair and simple tax system. A simple and fair tax code would empower people by taking the mass confusion and hassle out of the tax system and allow more people to keep more money in their pocket. What I propose is this: a tax bill of 0 per cent from those in the bottom 20 per cent of earners, the top 20 per cent of earners will pay 20 per cent of their income in taxes, and the middle 60 per cent will pay 10 per cent. Deductions can be taken for children. Businesses will pay under a similarly easy and fair system. The largest corporations will pay 20 per cent of their income, medium-sized businesses will pay the 10 per cent rate, and the smallest businesses and start-ups will pay no taxes. This system would encourage people to work harder to earn higher salaries in the “meaty middle” that drive the economy while adding a big boost to the poor. With a 20 per cent rate the wealthy and large corporations will continue to pay the largest amount of taxes while being able to keep the majority of their money to invest in the UK. Tax dodging must be strongly against the law and prosecuted. This system closes loopholes for good.
Many of you might then be asking, won’t this dramatic tax decrease destroy the goal of a permanently balanced budget? What about the aim of fiscal responsibility? Hopefully, by the time a budget like this could be put in place, Britain would be running a large budget surplus. Any shortcomings however could be imposed through VAT taxes and sales taxes, but so much currently handled by Westminster could be decided locally. Ultimately, the goal of future Conservative governments should be to phase out VAT and sales taxes to empower the British consumer and continue to take the fight to cost of living. (Which, by the way, is getting better).
How would a government spend the tax revenues from the fairer tax system? I propose it be spent as follows in order to protect basic British interests: ¼ of the budget goes to NHS, ¼ to military, diplomacy and foreign aid, ¼ to infrastructure, and other government economic investment projects and ¼ to pensions, welfare to the neediest and other government social programmes to help the most vulnerable. (For education I favour mostly local control with Westminster funds being received from infrastructure and social investment budgets with an emphasis on returning schools to local, private, religious and free management). Any excess tax revenue should be spent reducing the national debt. This would help ensure a more stable, fairer, Britain.
This plan is likely to enrage the usual cheery commenters below, but I ask you to think about this practically. Would you want the government taking half of your money? Even if that answer is yes, what track record do governments have of being good stewards of taxpayer money? All that welfare, has that lifted people out of poverty? Would there be Benefit Streets if welfare was capped at £18,000 as Iain Duncan Smith has advocated? Has inequality, the sacred cow issue of the left from the US to the UK, gone away? What track record does a large thieving central government have? It has a record of failure. Consider that the Atlee created welfare state took Britain from being among the world’s great power to receiving an IMF loan and being the “sick man of Europe” in the 1970s. The bigger the government, the less freedom you have, the less money you have in your pocket and the less you are viewed as an individual rather being seen part of a group on a spreadsheet (north, south, rich, poor etc.).
Government is not magic. There are some things it can provide well, such as defense or infrastructure projects. There are other things, such as the NHS or the Monarchy, which the British people believe is an important role of the government. There are many other government decisions that can handled at the local level, which more accurately reflect the needs of peoples and is more democratic. But, ultimately, who can make the best decisions for your life? You can. Imagine how much more money could be spent employing people if companies could spend less on taxes. Imagine how many more miracle drugs or iPhones could have been invented if companies knew for certain how much would come out of their pocket. And don’t just consider companies. I’m listening right now to Julia Hartley-Brewer on LBC discussing how people can’t have children because the cost of living is too expensive. That is heartbreaking. How many more children could people have if they kept more of their own money? A smaller, fairer government that empowers the individual should be all Conservatives’ wish for the future.