Stones in ponds
The ever excellent IFS is trying to throw a stone into the pond and cause some ripples, while the political classes are desperately trying to ignore it and reality.
First it points out that “Without tax rises or a significant increase in economic growth, UK public service and benefits provision will not simply tread water, it will deteriorate.” Just think about that for a moment and remember the right wing nutters who are proposing tax cuts based on a few months slightly better borrowing figures.
But the IFS goes much further and the conclusions are much more politically difficult. The tax system needs root and branch reform, because income from working is penalised relative to the taxes on owning a business or having lots of capital. Especially homes which are a source of huge, totally untaxed wealth while stamp duty is just a disincentive to move home for work.
In short the young working age population is taxed heavily, the wealthy, the elderly and the ones with property are not. The whole economy, as a result becomes less productive, less dynamic and less fair.
This is screamingly obvious and has been for years, The Tories in particular have fought to heap taxes on workers and let the rich sit on their wealth.
Look at the campaign gathering momentum to abolish inheritance tax (IHT), utter madness and another huge give away to the wealthy.
Abolishing IHT will make things worse but I assume it will happen.
It will win votes, it will also further bankrupt the country, benefit only the very wealthy, and force tax rises on the young and the poor; but it will win votes.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media