Conservative (Ms) Communication & Catastrophising Keynesians
Wednesday 19th October 2022
The Tories have always been hopeless at articulating the simple fact that -
Low tax rates help create a vibrant economy, increasing the overall tax take, which in turn can fund essential services - like the NHS.
Ms Liz and King Kwasi illustrated those poor communication skills perfectly over the last month. King Kwasi was Growing-Going-Gone and it looks like Ms Liz is going soon. I have just checked and she is still there as I write. Perhaps not as you read!
Every head of a publicly funded institution, most journalists and the Twitterati are suddenly all armchair economists - it takes one to know one!
Keynesianism rules the (air)waves and anyone daring to argue publicly for a low tax, high growth economy are treated with opprobrium.
Suddenly, the idea of borrowing an ‘unfunded’ £60 billion pa to fund tax cuts is the greatest sin since the invention of religion. Few recognise that this sum is 0.024% of the current national debt i.e. it is a fractional increase which doesn’t touch the sides.
Virtually all Kwasi’s tax reductions have been expunged.
My greatest fear is that UK Growth will be the victim of this debacle.
Surely, stimulating growth is still a good idea.
Small and medium-sized enterprises are crying out for fewer impediments to profitable success.
Yet, the new Chancellor - effectively now the Head of Government - seems also to be working on watering down the Free Enterprise zones, ditching any plans to reform Business Rates and shying away from much-needed Planning Reform. If you don’t believe me; look at the latest spin coming out of The Treasury suggesting these measures would ‘cost’ the taxpayer- it’s clearly rubbish but The Treasury are always in charge.
The UK property market generally and Prime Central London in particular, is completely (m)ucked-up by distorting taxes.
Dynamic tax modelling clearly shows that Stamp Duty and CGT changes could massively increase the overall tax take from this sector, whilst allowing a fluid market.
Here is the slogan the Tories need:
‘Tweak the tax rate - to boost the tax take’
I am still not sure they get it so we are doomed to be run by the Treasury forevermore - and to a Labour/SNP Government.
At least we would be rid of that ludicrously illiberal Home Secretary - Suella Braver-person. Just seen - we already are. Who next?
Until next time,
PB
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