Daily Mail hack calls for Trump-style tax cuts. We should cut austerity instead

Stephen Glover has this IFS report all wrong

 

Daily Mail hack Stephen Glover has combed through a sobering report by the Institute for Fiscal Studies (IFS), which projects more austerity and less NHS spending, and decided the main problem is that taxes are too high.

He writes today:

“According to the Institute for Fiscal Studies (IFS), in the year 2019-20 the tax burden will rise to its highest level for 30 years as a proportion of national income, which would take us back to 1986-87, halfway through Margaret Thatcher’s economic revolution.”

At this, Glover yelps: ‘Is it too much to hope that the Tories might act like Tories and CUT taxes?’

He goes on to praise US President Donald Trump’s proposed tax cuts, and welcomes the prospect of Britain becoming a Singapore-style tax haven, as floated if the EU denies us a trade deal post-Brexit.

So far, so Tory. But as the IFS said, the higher tax burden comes amid a Thatcherite belt-tightening – supported by Glover – which is failing in its own terms. As the think tank said upon releasing the report,

spending cuts are playing a greater role than tax rises in reducing the deficit […]”

Contra what we hear, conservatives can’t have and eat their cake. You can’t cut taxes and the deficit at the same time. Worse than that, as the same IFS note says, austerity isn’t even cutting the deficit. Here are some facts:

After nearly seven years of tax rises and spending cuts:

  • The deficit this year will be higher than in all but 13 of the 60 years before 2008, and remains the fourth highest of 28 advanced economies;
  • The national debt is at its highest level as a fraction of national income since 1965–66 and is higher than that faced by all but five other advanced economies;
  • Real spending on public services has fallen by 10 per cent since 2009–10 – by far the longest and biggest fall in public service spending on record.”

So despite the greatest ever slashfest of public services, the deficit (which we were told caused the 2008 crash) is still higher than it was before that meltdown.

How, pray tell, would cutting taxes for the better off help this? Make no mistake, that’s what Glover and his ilk mean by ‘lower taxation’. Here’s what he says about Trump’s tax plans:

“In the United States, Donald Trump will introduce tax cuts for the rich and middle- income earners as well as for companies, which currently pay a very high rate of corporation tax by international standards.

[…] there is every reason to hope that comprehensive tax cuts will restore vibrancy to the stuttering American economy.

‘Rich and middle-income earners as well as for companies’ – got that?

Meanwhile, he says Singapore

“has a per capita income almost twice that of its former colonial master. Singapore has much lower income tax rates than we do, as well as lower company taxes.”

It’s also propped up by hundreds of thousands of migrant workers, (many of whom are treated like slaves), making it an odd model for anti-immigration Tories post-Brexit.

As I’ve suggested here before, paying taxes is how we fund public services. The more money you have, the more you should pay in.

This government’s refusal to raise taxes on the wealthy to fund public services, and its decision to ‘balance the books on the backs of the poor’, is why Britain’s in this mess to begin with.

Adam Barnett is staff writer for Left Foot Forward. Follow him on Twitter @AdamBarnett13 

See: Five must-see graphs from the IFS green budget

See: VIDEO: Donald Trump ran for president as a racist. This Muslim ban is not about security

3 Responses to “Daily Mail hack calls for Trump-style tax cuts. We should cut austerity instead”

  1. Michael WALKER

    As I’ve suggested here before, paying taxes is how we fund public services. The more money you have, the more you should pay in.

    Ahh the mantra of the economically illiterate.

    So you are proposing that we tax all people resident in the UK on their world wide assets?

    It won’t work. As an A level economics student could explain.

  2. Michael

    The point is, that tax cuts for the wealthy go to the people least likely to spend the money. All they can do is either leave it in the bank or speculate (gamble) with it, fueling inflation and Ponzi schemes. Tax cuts for low earners go to people who will spend the money, and thereby generate growth in the economy. This is Basic Keynes. but you need a bit more than A Level to understand this.

  3. Ivan D

    Prejudiced illiterate reactionary garbage as usual. No wonder the left is on its knees.

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