Tax cutting is as much political as it is economic. That means that it is no good just to argue the economic case for cutting the fifty pence tax rate without any consideration of the political consequences.
And the political consequences of such a tax cut – at this point in time during the economic cycle – are enormous.
At a stroke, it would allow our opponents to re-characterise the Conservatives, as being the party of the rich – for the few, not the many. The signal that such a tax cut would give to the public – many on average wages of £20,000, struggling with rising prices, would be that Conservatives were looking after vested interests: not so much a dog whistle – more a full blown trumpet. It is not hard to imagine the response on our doorsteps, and the leaflets from the Labour Party that would result.
For years, – particularly in the dark days of Opposition – Conservatives allowed themselves to lose the low tax argument. Conservatives and tax cuts came to be synonymous with a belief that were not so much the nasty party, but the party of vested interests. That is what made it so much easier for Gordon Brown to slap on the fifty pence tax in the first place – knowing how hard it would be for a future government to undo.
To win the tax-cutting argument, we need to first prepare the ground, explaining why lower taxes are literally about social justice: a fool proof mechanism for empowerment. Then we need to demonstrate that tax cuts are for the the many not the few. That tax cutting is indeed a moral creed designed to help the poor.
So more tax cuts for lower earners – raising the tax threshold even further to eliminate the poverty trap. Cuts in petrol/diesel taxes which millions of motorists will benefit from. Later, when the deficit is under control – some serious income tax cuts – again strengthening the whole country.
I am not saying we should never reduce the fifty pence rate – but it could be implemented once the economy has recovered. It can only come when the public are convinced that 'tax cuts' and Conservatives mean a fair deal for everyone.
I despair at the fifty pence tax rate becoming the main part of the tax cutting debate. This stuff just plays into the hands of our enemies and those who wish to stereo-type Conservative activists or policy.
All this does is make it harder for us to win a real Conservative majority – so as to implement a real long term tax cutting agenda, without the constraints of the Coalition.
Why not use the language of tax cuts for social justice; lower tax cuts for lower earners; empowerment for all. These would make a much better trumpet sound and give us a real chance of demonstrating that we really are the party of social justice – whatever the socialists might say.