There were mixed receptions in Liverpool after the budget announcement today, and this blogger is concerned.
Standing just off camera whilst the BBC went live from the Albert Dock, I saw the budget as it happened and the piecemeal tv moment reactions which took place.
There really is nothing like tv land; where hanging around is the order of the day, only to speak for a few minutes and not really even getting much reaction to the budget in.
Though as soon as the cameras stopped rolling, the business leaders on Merseyside started to try and stick their oars in properly – as they will, no doubt, across the rest of the country.
The Director General of the British Chambers of Commerce David Frost, has already responded:
“A major concern has been raised over the income tax hike for the highest earners. The strength of the UK has been as a low tax economy giving us a competitive advantage and able to attract the most highly skilled workers.”
Other conservative economic commentators have also noted that the ‘tax hike for the highest earners’ (which sees the highest tax band upped from 45% to 50% for those earning over £150,000 pa) will stifle new entrepreneurs – something which the government would like to see more of.
This is all quite scary stuff. The right wing is already shooting down one of the most sensible statements coming out of the budget.
True, upping the taxation rate by 5% will not make a dramatic difference to the exchequer, though in principal, it makes perfect sense. Taxing the most affluent members of society is always a must from my perspective, even though my elders say I will live to rue those words if I’m ever in a position to earn money which is taxed at a higher rate.
I hope, for my sake, that I never become one of those disgruntled bastards that I used to serve pints of lager too in a little country pub. The tight-fisted, no-brained nonces would continuously moan about being ‘taxed up to the hilt’ and how we are, today, taxed more by Labour than the Conservatives ever took in the 80s.
Firstly, it is simply not true that we are ‘taxed up to the hilt’ in modern Britain. If one looks at the total tax revenue as a percentage of gross domestic product (GDP,) taxation has roughly remained the same since the 1980s. Given the rate of inflation and growth in GDP output since that time, this is no small miracle.
Indeed the Organisation for Economic Co-operation and Development (OECD) found that tax as a percentage of GDP was higher at the height of the Thatcher 80s (at 37.6%), than in the Blair 200s (at 37.1%).
Secondly, one must remember that you have to be earning an extrodinarily large amount of money before higher rates of taxation effect you.
These right wing middle aged lager louts are probably on salaries with a large number of zeros after the initially obscene figure, so of course they are being taxed quite a lot. Which is only correct.
For comparrison, they ought to take a day away from their Porsches and million pound rural homes to see how the lower tax band types live.
However, the 50% taxation band for those earning over £150,000 a year is strangely making this blogger say Thank God we have a Labour government right now.
Though this tax hike plays right in to the right wing rich type lager louts’ hands, it is a necessary step to take, and I can not see the Conservatives having made this step.
If anything the tax hike is perhaps a purely political step by Labour to see if the tories will contimplate abolishing the hike, though it is also a return to some sound left wing thinking, which the Labour party is supposed to stand for.
From this bloggers perspective, a society of equality is built on the fair and correct distribution of wealth. To appease those who get taxed a lot, I also believe one must see the advantages of a high rate of taxation – in the schools, health service, emergency services and transport links of the country. Sadly, this is not at current what we have.
Therefore, todays budget is a mixed bag.
It has seen the Labour party swing slightly to the left with its higher taxation – though whether this allows us to see a visible benifit in our public sector, I do not know. (it probably wont now will it… knowing New Labour)
It has also laid down the gauntlet to the Conservatives. Whether they step up to the plate, remains to be seen.