Tax increases are a real alternative to spending cuts

The public want honesty on tax. So why won't politicians give it to them?


We often say we want our politicians to be honest. Yet the nature of politics has in the past made honesty difficult for progressive politicians.

This is most apparent in debates over tax and spending. In Britain austerity has meant deep spending cuts but, perversely, generous income tax cuts too – as if the two are completely unrelated. When taxes have been increased it has been done stealthily and by tinkering around the edges.

The reluctance on the part of politicians to talk honestly about tax dates back 23 years. When the former Labour leader John Smith decided in 1992 to set out the party’s tax and spending plans in detail – i.e. to be honest with the electorate about what to expect from a Labour government – he was battered by a Tory poster campaign warning voters of a ‘Labour Tax Bombshell’.

An obedient press also toed the disingenuous Tory line: ‘Give more to the tax man with Labour,’ boomed the Daily Mail. ‘Kinnock’s middle-income massacre,’ declared the Express.

Perhaps the press was paying attention to the United States almost a decade earlier. In 1984, Democrat presidential candidate Walter Mondale pledged with unusual candour to raise taxes. “Let’s tell the truth…Mr. Reagan will raise taxes, and so will I. He won’t tell you. I just did.”

Mondale subsequently took a hammering at the polls, largely on the back of Republican attack ads which took his words and span them out of their original context.

The lesson politicians of the left took from these two episodes was that honesty on taxation does not go down well, especially if honesty means admitting to future tax increases.

Yet this long-standing fear of a tax backlash may be out of date. Though the spectre of John Smith may still haunt the Labour party, public opinion appears to have moved on.

To take just one example, according to ComRes polling from last year almost half of the electorate would be willing to pay more income tax if the money went to the NHS. According to polling by YouGov, 42 per cent of the public favour giving public services more money and investment even if it does mean higher taxes. This contrasts with just 14 per cent who wish to prioritise reducing taxation even if it results in public services having less money.

The public also appear to sit to the left of the political consensus in terms of the type of taxes they favour. The coalition has raised the personal tax allowance and increased VAT. The first move offers greater benefit to those higher up the income scale while VAT falls more heavily on low income households.

Yet polling by the Equality Trust from last year suggested that 96 per cent of people believe the tax system should be more progressive than it currently is. In other words, they would prefer things to have moved in the opposite direction to the tax policies of the coalition.

And yet because politicians won’t talk openly about tax, the case for progressive taxation is never made.

The current General Election campaign is a case in point. Because politicians refuse to publicly countenance any increase in income tax, the focus is always on which government departments the next government will slash and by how much.

Not only is this a huge concession to the right (income tax is bad whereas cutting is good) but it also risks leaving politicians open to accusations of broken their promises if taxes do rise (which they will if the next government is to meet bourgeoning NHS and pension costs). Broken promises lead to a further diminishment of public trust in politicians.

In recoiling from the dreaded T word, politicians are behaving like it is 1992. Meanwhile the public have moved on, and I suspect they might like a bit of honesty on tax, even if it hasn’t always worked out well in the past.

James Bloodworth is the editor of Left Foot Forward. Follow him on Twitter

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