Tuesday, 8 December 2009

Tory tax policy seeks to nourish society, unlike Toynbee's short-termist alternative.

Polly Toynbee's latest ‘class war’ piece is a conceptually threadbare piece of writing. I get the impression that whilst she still feels compelled to bang the tribal political drum she is now barely convinced by her own arguments.

Despite what Toynbee might contend, the Cameron Conservative message that a Tory government will prioritise poverty is getting through. It has remained a consistent thread through various policy documents. The simple truth is that the Guardian columnist instinctively recoils from an approach which tackles the causes of poverty as well as its symptoms.

Thus measures which encourage responsibility, help people into work or remove tax penalties on married couples and savers are presented, not as attempts to nourish society, but rather, in Polly’s world, become unconscionable attacks on the poor.

Toynbee argues that each of the shadow chancellor George Osborne’s tax plans is intended to benefit the seriously wealthy. Her claims do not bear scrutiny.

It is true that the Conservatives plan to raise the threshold of Inheritance Tax to £1 million. Indeed, I have argued that this commitment should not be included in the general election manifesto. During the next parliament there will not be a propitious moment to cut taxes. The emphasis should be restoring fiscal responsibility.

However it has been made clear that the threshold will not be a pressing priority. Certainly there is not, as Toynbee appears to allege, an existing pledge to reverse the 50p tax rate immediately. Although its efficacy is questionable, the top tax bracket was ostensibly introduced in order to tackle the deficit. It will remain, until the economy begins to show definite signs of health and stability. At the earliest, its abolition is four years distant.

The Tories have not, as Toynbee suggests, committed to tax penalties for those who are not married. The intention is simply to remove existing disincentives which effectively discourage the formation of stable families.

Whilst an attempt to engineer a return to some arcadian 1950s notion of the ‘nuclear family’ is neither desirable nor possible, it is not right to encourage, through the tax system, the dissolution of families. To argue that married couples should continue to be penalised, and to invoke redistribution as the rationale, is an untenable argument.

Government policy on tax cannot simply be dictated by mathematical calculations. It should aspire to a more complex calculus which seeks to balance the books whilst providing the framework within which society can flourish.

Toynbee’s is rather a depressing analysis which omits this grander vision. Her preferred means of achieving equality is simply to expropriate money from rich, middling and even struggling working people, in order to feed an over centralised state, which in turn will distribute left over funds to an underclass of dependents. It is actually a model for social stasis.

The Conservative alternative certainly does not repudiate the need for redistribution. On the contrary, it prioritises the needs of the poorest. But it also aspires to reward people where they take responsibility for themselves. It is ever cognisant of the need to nourish society’s roots and make it better, so that people’s lives will improve and ultimately the state will have fewer dependants.

1 comment:

Kevinho said...

While I share Toynbee's suspicions that Cameron's real priority is his Old Etonian chums, you are right that she is a bit of a demgogue.

I really think the most important thing we could do in terms of tax policy would be to get rid of progressive taxation. Instead everyone could be taxed at a flat 25%, say. The reason? The real challenge is to get the rich paying tax in the UK again, and they will only do so if the rate of tax they are expected to pay does not increase as they get richer. If the contribution of the richest rises from 0% to 25%, the gains could well offset any losses from the loss of the higher bands.