Tax take
For decades the UK has been told that low tax was the key to entrepreneurship, its attractiveness as a site for foreign investment and growth.
None of this is true, there are lots of dynamic countries with fast growth and high tax rates.
Remember George Osborne slashed corporation tax in the middle of the worst period of austerity in government history because it would bring in more money and make the UK an attractive place to do business. Rishi Sunak increased it because it will bring in more money and make no difference to the UK’s attractiveness.
But that didn’t seem to make anyone wonder why they are told time and again by the wealthy and those who want to win elections, that cutting taxes brings in more money and boosts growth. Even though it doesn’t.
Campaigning to raise taxes to fix the Army or the courts or the NHS is still political suicide.
This rigging of the debate means the UK is always trying to do more with less and trying to punch above its weight. The result has been to rob Peter to pay Paul.
Increasing funding of the NHS has been paid for not with taxes but with dramatic cuts to defence spending.
But even so the tax take is now 37%, an historically high figure for the UK, with more rises on the way. And already the pressure is growing for a Tory government to cut taxes, when it it obvious the country desperately needs to spend more on a whole host of things; defence, education, infrastructure, care and the NHS.
This pressure to cut taxes comes even though higher defence spending is a boost to the economy and improving education and infrastructure would do more for growth than low taxes ever did.
It is perfectly possible to have a dynamic and wealthy society with tax rates of 40%+.
With an ageing population, a war in Europe and low growth rates the Uk needs to have this debate.
But it never will.
Boris Johnson didn’t invent cakeism.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.