The Apollo Project
Liberal Ideas for the 21st Century
Wednesday, September 21, 2005
Lowering the temperature on tax
by Phil Grant

No clever headlines or striking lead paragraphs – this is going to be an attempt at cooling down.

Charles Kennedy made a very sensible observation on Monday regarding Liberal Democrat discussions on tax policy.
“I don’t think people are going to resile over the course of the next three of four years in the Liberal Democrats from the idea that the very best off in society should pay that bit more than the most disadvantaged in society for the same public services we all share.

“I would be flabbergasted if this party suddenly was to tear up that view.”

It would be an eccentric Liberal Democrat indeed who did not take the view that there are substantial public goods that ought to be funded from taxation, and that taxation should be progressive. Vince Cable doesn't believe otherwise, David Laws doesn't, and nor does anyone else from the "Orange Book" wing of the party, whether or not they have expressed an interest in the flat tax.

Cable, as it happens, has all but ruled out the flat tax, but even the standard flat tax package is progressive since it makes a substantial amount of income entirely tax-free, taking the lowest-paid out of income tax, and reducing the effective rate – if not the marginal rate – paid by medium-low earners. There are good arguments against it, but its advocates don't become bad liberals because they support it.

We'll get a more constructive debate from recognising the common ground we have.
posted by Apollo Project @ 2:14 pm  
  • At 21 September, 2005 16:59, Anonymous Anonymous said…

    indeed, it seems bizarre to think that a flat local income tax is progressive while denying the same is true at a national level, regardless of the tax free level. I am against a national flat tax as I think it would lead to a fiscal shortfall, but there is no a priori reason why it is illiberal

  • At 21 September, 2005 18:39, Anonymous Valerie said…

    We'll get a more constructive debate from recognising the common ground we have.

    Well said...

  • At 23 September, 2005 13:13, Anonymous Gareth said…

    The flat tax myth needs debunking. It will either lead to a massive fiscal shortfall or will be levied at a rate (35% plus) which is hardly progressive.

    The problem with Cable is that in concertedly knocking the 50% he (a) makes his position untenable if he loses a Conference vote; (b) is not putting forward any alternative and has not made the 'fairness' argument.

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"What is Liberalism?: I should say it means the acknowledgment in practical life of the truth that men are best governed who govern themselves; that the general sense of mankind, if left alone, will make for righteousness; that artificial privileges and restraints upon freedom, so far as they are not required in the interests of the community, are hurtful; and that the laws, while, of course, they cannot equalise conditions, can at least avoid aggravating inequalities, and ought to have for their object the securing to every man the best chance he can have of a good and useful life." C-B.


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