David Cameron Talks...Britain Suffers
David Cameron talks a good talk. That's why his rich backers in the UK are so pleased with him, and the top rate tax reduction in April.
However like Mitt Romney's billions of campaign dollars, they will fall on the stoney ground of a British Electorate which will not vote Lib Dem ever again, and is seeing the economic injustices and imbalance as creating a US , laisez faire ghetto-and-condo society.
In April the new lower rate comes in for top tax payers. In fact I am not against a lower rate for those earning up to £60,000 a year: it actually isn't a lot of money in London and also these are people in positions of responsibility often in the public sector who at least declare all their income. However of course in the same month, the very poorest subsistance families and those WORKING families on a single minimum wage will have their kids clothes, their holidays, their christmas presents stolen by Dear David and his rich chums, all in the aid of "balancing the books and getting people back into work".
This is where his rich pals and former Eatonite fund managers can't paper over things: it was his rich, yuppie funny-money backers who caused the recession. It was them who leant money and took their cut and made a housing market boom based on a house-of-cards of credit. But it is they who don't have to pay, and in fact will pay less after April. It is many of them who are defering their bonuses based on some recovery from abject failure in 2012 into the April tax year. Britain is becoming an obscene party for the rich as the expence of a public, with the Tories trying very hard to blame labour for the catastophy.
Labour of course did over spend or rather spend in relation to the up phase of the "economic cycle" lasting for another term. So did many other states, and several conservative governments. They tried this trick in the US too, blaming the president who sat on top of the Bush approved bubble and a congress and senate legislature largely strangled by the super rich backed fascists and oligarchs in the Republican party and right of the democrats.
However raising taxes at this top rate doesn't always work of course: they are the very high earners who can employ accountants and find tax effective mechanisms, and they have enough power within their organisations to negotiate further bonuses, share options and foreign employ to avoid tax. But this is not the whole picture: now there are many more highly paid middle managers, engineers and technocrats. So there is a rich seam to be taxed above around 55K and of course a new super rate could be imposed above 80K for example, to claw back in some cash from those overpaid GPs for example. This also forces more people in the private sector into actually buying shares or indeed setting up their own private companies to supply their expertise and take a profit while enjoying the business tax-write-offs.
Effective taxation means maximising revenue. If you raise top rate too much, then you don't bring in so much tax. However as there are far more salaried high earners who don't have ready access to "mechanisms" then let them eat Dan Cake.
The Great PR Fraud of the Century
All governments try to blame the last outgoing who now sit in opposition. The problem is though that Labour despite having a very good opportunity for winning the next election, are losing the PR battle because the Tories are much better at it.
The tories know who they represent " the hard working types who want to get on" which is the same types who think there is no need for minimum wage OR benefits and that is kind of implied as in Labour then getting the " wasters who want to turn up and take the cash and deliver poor services" which the tory voter believes in, and many of those struggeling on low incomes also see as time wasters. We could come in a situation like in the USA where white-trash vote republican because of this aspiration-desparation effect. Their lives will get worse under a right-wing slow down but they will still aspire and blame big-bad-government.
Labour have lost their way and the big PR machine for the rich the Tory party is, will slowly convince enough people that labour are the route of all ills, and not their rich backers who favoured the laisez-faire, puny-weak governance of stock and capital markets. I hope the press do not forget this.