Wednesday, 7 March 2012

Boris, and what you won't read in the Evening Standard

One of the many sensible things that the Liberal Democrats said before the last election (what a long time ago that seems now) is that the burden of taxes needs to be considered thoroughly.  For example, the idiocy of the Council Tax, which is based around notional property value in 1991 and which has not been updated to reflect current differentials, local declines and falls and the impact of the super-rich tax avoiders whose ability to scam the stamp duty regime means that their contributions to the general good are disproportionately small.  Add to this the reality that Council Tax receipts do not cover even half of local government expenditure and you get very close to a system that is neither equitable nor efficient. 

Were a significant portion of local revneue to be raised from direct taxes on either people or property within the boundaries, this would provide some incentive for more participation and scrutiny of local government.  It would also give powers back to the locality, rather than giving the centre the current highly-geared ability to reward its political allies and stuff the rest of the country.  So this is clearly going to be unpopular with the Tories, who believe that local government is merely a means for getting third-rate apparatchiks large allowances and filling up pages of under-resourced local newspapers with perpetual drivel about a mythical drift back to the 1950s.

So the Budget and the London Mayoral election have become a battleground.  Rumours are that there could be a deal to be cut within the Coaltion on the 50p tax rate and the grotesque spectacle of the top end of the property market underpaying for local services.  The huge number of high-end properties, particularly in London, standing under-used and occupied by people whose other tax status is mainly offshore, should make this end of the market a prime candidate for taxation (houses, unlike the fleet-footed tax evader, cannot move around) and a means of funding services and infrastructure that are otherwise free-ridden by the peripatetic parasites.

These are, however, Boris Johnson's acolytes, so his equivalent of Pravda, the "Evening Standard" is up in arms about the mere attempt to establish some equity in the tax burden.  Perish the thought that the level of affluence in London and the South East is so much greater than in other parts of the UK, or that much of the movement is asset value is deserved as much by the recipient as a win on the national lottery - as the South-Eastern NIMBY culture gets into overdrive.  The "Standard", from a reasonably promising start when it was decoupled from the rabid extremism of the "Mail", has mutated into a despicable pro-Johnson farrago, reflecting its market research and its phobia of addressing the inequality and deprivation that exist on its own doorstep.

The idea that reforming tax, and ensuring that land, as well as labour and capital, makes an equitable contribution to the fiscal pot, should be so radical is clearly a product of the Thatcherite delusion that nominal asset values (i.e. house prices) should always rise and that they are a good thing.  The proposal to revalue Council Tax bandings was scuppered by the mid-market tabloids under Labour.  So perhaps the Coalition can take the opportunity to review the whole tax burden, squeeze the non-contributing, non-domiciled rich, and ensure that there is equality of impact in terms of people's sacrifices.  It won't happen this year, as the Tories want to dig in to London and Boris's grasp on reality and ethics is nearly as tenuous as the rest of them - but unless something gets done soon then there will be more trouble from those of us who don't like being lectured on our need to sacrifice while those above keep their fingers in the till.

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