Monday, March 03, 2008

Some people don't like it

Many thanks to Mark Wadsworth for making the Libertarian Party one of his Twats of the Day selection, over our abolition of income tax policy.
I have lined up three twats from across the political spectrum, just to show I hate them all...

  1. And finally, The Libertarian Party. They propose to cut out wasteful government spending, which is about a quarter of total spending or £130 billion. A very good start, BTW! But instead of wanting to get rid of the most damaging taxes (VAT and Employer's National Insurance—yield about £125 bn) they say they would scrap income tax, which all things considered, is nowhere near as damaging and is much 'fairer', in the grander scheme of things than VAT and Employer's National Insurance. So it's just a headline-grabbing gimmick from people who don't understand economics.

Mark hasn't bothered to read the rest of our manifesto—apparently, although he is attacking us, we should read his manifesto before we defend ours (the petulence of his "please, Miss, I dun wrote mine first" attitude is quite entertaining)—so he is taking the policy on its own.

Which is, of course, a fucking stupid thing to do.

No policy should be taken in isolation from the rest of a manifesto; as I have constantly emphasised over my three years of blogging, any radical idea cannot be taken in isolation. If a policy can be taken in isolation, it is either a gimmick (and not thought through) or it is mere tinkering at the edges. LPUK don't intend to do either.

As you would know, Mark, had you bothered to read our manifesto, we will abolish VAT as well. But we intend to replace it with a local sales tax and set at local level; this will encourage tax competition between local councils, thus keeping tax levels down.
  • Replace VAT with national and local Sales Taxes.

  • Local Sales Tax to fund and be set by County Authorities, and to replace Council Tax.

  • Business to business transactions paid between bank accounts of registered companies will not be subject to Sales Tax.

  • National Sales Tax rate initially set at 17.5%, as a direct replacement for VAT.

This measure should also encourage far more participation in local politics. Unfortunately, I don't think that Mark quite realises just how much we want to shrink the state (I also look forward to his campaign against those US states which have no state income tax too, obviously).

As for Employer's National Insurance... well... LPUK health policy is still under review, although you can find our outlined aims here, but I, personally, would favour the abolition of NICs anyway. Any health payments certainly wouldn't be going to the state in any case; NI is just a Ponzi scheme (as is the public sector pension arrangement). Does this sound at all familiar?
Ponzi was bringing in cash at a fantastic rate, but the simplest financial analysis would have shown that the operation was running at a large loss. As long as money kept flowing in, existing investors could be paid with the new money, but colossal liabilities were accumulating.

As with NI, the money was not actually invested: it was simply used as income and the liabilities were paid out of that income. The Ponzi scheme was a massive fraud, and so is NI. As with tax—or, as I prefer to call it, extortion with menaces—if it wasn't the state doing it, the whole scheme would be illegal.

Mark also mentions land value tax (LVT) with a rabid enthusiasm, and he has looked at its implementation. And that will be very helpful to LPUK, thank you, as we have actually included, in the manifesto which (I shall stress again) Mark couldn't be bothered to read (shall all the LPUK members just send you an email when we've read your manifesto, Mark, so that you can finally get around to reading ours?), a proviso for implementing an LVT.

So if it's all the same to you, Mark, we'll keep developing our manifesto and you can get UKIP to implement yours. And if people think that they have something to offer in this regard—ideas, expertise or whatever—do feel free to wander over to the LPUK forums, where you can help flesh out the LPUK manifesto.

Who knows?—you may even want to join the party...


Andrew Ian Dodge said...

Its better to be talked about than not talked about...

Mark Wadsworth said...

"petulance" actually.

Whether sales tax is national (VAT) or local is neither here nor there. A bad tax is a bad tax, whatever you call it. Your VAT idea is the same as UKIP's and I am busy arguing with them over it.

I also note from your manifesto that you favour taxing 'consumption' over 'incomes' - however you structure this, it has the same disadvantages as VAT - it damages economy, leads to distortions and is regressive. In any event, in a service economy, consumption and production is the same thing.

Yes, there are US states with no state income tax, but they still have federal income tax, so that is a non-argument.

What's the link between NI (effectively income tax) and health spending? You know that we are agreed that the state should not be the provider. I have no particular objections to funding a basic level of vouchers out of general taxation.

And so on.

But thanks muchly for the link, of course!

Anonymous said...

Hey DK, you get my vote for (a) general honesty (b) ability to combine wit with vitriol in balanced(ish) measures; and (c)refreshing self knowledge. That's enough pats for today, I'm not your mother.

Anonymous said...

Ouch! Herding cats and dog fights.

Anonymous said...

"As for Employer's National Insurance... well... LPUK health policy is still under review"

That's a pathetic line and - given what you have written in the past - a deliberate attempt at deception. NI contributions have nothing whatsoever to do with healthcare. They are simply a form of tax. For the record, it seems clear to me in a country with significant unemployment that the NI system is one of the more damaging taxes – at least income tax only kicks in after the personal allowance (disgustingly low though it is) has been exhausted.

And it ill behoves someone that whinges about criticism of a policy considered in isolation to rely on the defence that another major plank of policy has yet to be formulated…

TN said...

DK, The LPUK is starting to garner my interest but it would be useful if the manifesto was available in a one shot PDF so I can read and scribble notes. I know I could do it from the website pages, but I've been nannied for so long now...

Devil's Kitchen said...

Poons, ]I shall address this.


You should know what my views are. However, it is nolonger solely me in charge of this manifesto and we woould rather it was discussed properly, cheers all the same.

But, for a hint as to where the logjam is, I suggest you look at, say, the US and the French systems.


Roger Thornhill said...

IIRC 2006 NI receipts £85bln, NHS spending £90bln.

Also recall Brown pushing an extension of NI bands to pay for NHS "improvements".

wonkotsane said...

VAT is shit and a local sales tax would be just as shit. Like Council Tax, it doesn't have any link to the amount you can afford to pay. VAT is supposed to be a commodity tax but it's applied to essential items which makes a mockery out of the concept of a commodity tax - that people who buy "luxury" goods should pay a tax on them because they theoretically have more money to spare.

More income-linked taxes are the answer.

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