In the vernacular of American teen movies the Conservatives have 'issues' with taxation. Even after a period when mainstream Conservatism came to an uneasy accommodation with once alien notions like gay rights and environmentalism, taxation is still a subject that pushes their buttons. Witness the growing unease throughout the year at Osborne's refusal to promise tax cuts, Cameron’s ambiguous welcome for Redwood's suggested changes in corporate taxation and the horror that greeted any suggestion from Zac Goldsmith that perhaps some things should be taxed more.
How Cameron handles taxation will test his talent for identifying issues that resonate well with the wider public rather than with traditional Conservative supporters. This is important because that last constituency has a distorted sense of priority when it comes to taxes. Despite the best efforts of the likes of the Daily Mail, Telegraph or ConservativeHome I don’t think there is any settled view among 'joe public' that taxes are particularly high. The regularly quoted stats on Government receipts as a % of GDP may be accurate but they are arrived at via a complex calculation that includes business taxes, fiscal drag, adjustments for mortgages etc. There’s actually a very weak relationship between them and the actual experience of many people. However enthralled bloggers, political hacks and party activists may be at the content of the latest OECD or ONS research paper, the average tax-payer will make their assessment by more mundane means and there's little evidence of real concern at that level. When the Conservatives were last in office people rioted about the poll tax and even after that they elected another Tory government – if that level of anger and indignation couldn’t shift a sitting government it’s hard to see how stroppy Daily Mail headlines about ‘tax burdens’ will.
I have similar concerns over the continued use of the phrase 'stealth taxes' - it may resonate with instinctive conservatives who are suspicious of taxation in general (particularly indirect taxation) but it's not clear how it lands outside that constituency. Since we're a reasonably wealthy country anyway I suspect that for many people the idea that record sums can be found for investment in public services with little or no increase in direct taxation is actually a rather neat fiscal trick - "sure the money may still come from me but if I don't really notice it's gone..." This attitude may horrify some but I suspect it's more common than you'd think and particularly so among the very people who's attention Cameron needs to capture.
Despite this the Conservatives still have an opportunity to exploit here. In today's increasingly homogenous political environment few topics function well as political signposts anymore but taxation is still one of them. For all the ridicule heaped on it the 'sharing the proceeds of growth' formulation is actually spot on and not something any reasonable person could disagree with. What's more, given questionable productivity impact of Labour’s investment programme there's a very real 'value for money' issue the Conservatives are well-placed to exploit. They just need to remember that if, like a dog with a bone, they bleat on and on about 'tax burdens' at every opportunity and it doesn't chime with the public as a real issue of concern, they do so at their peril.
How Cameron handles taxation will test his talent for identifying issues that resonate well with the wider public rather than with traditional Conservative supporters. This is important because that last constituency has a distorted sense of priority when it comes to taxes. Despite the best efforts of the likes of the Daily Mail, Telegraph or ConservativeHome I don’t think there is any settled view among 'joe public' that taxes are particularly high. The regularly quoted stats on Government receipts as a % of GDP may be accurate but they are arrived at via a complex calculation that includes business taxes, fiscal drag, adjustments for mortgages etc. There’s actually a very weak relationship between them and the actual experience of many people. However enthralled bloggers, political hacks and party activists may be at the content of the latest OECD or ONS research paper, the average tax-payer will make their assessment by more mundane means and there's little evidence of real concern at that level. When the Conservatives were last in office people rioted about the poll tax and even after that they elected another Tory government – if that level of anger and indignation couldn’t shift a sitting government it’s hard to see how stroppy Daily Mail headlines about ‘tax burdens’ will.
I have similar concerns over the continued use of the phrase 'stealth taxes' - it may resonate with instinctive conservatives who are suspicious of taxation in general (particularly indirect taxation) but it's not clear how it lands outside that constituency. Since we're a reasonably wealthy country anyway I suspect that for many people the idea that record sums can be found for investment in public services with little or no increase in direct taxation is actually a rather neat fiscal trick - "sure the money may still come from me but if I don't really notice it's gone..." This attitude may horrify some but I suspect it's more common than you'd think and particularly so among the very people who's attention Cameron needs to capture.
Despite this the Conservatives still have an opportunity to exploit here. In today's increasingly homogenous political environment few topics function well as political signposts anymore but taxation is still one of them. For all the ridicule heaped on it the 'sharing the proceeds of growth' formulation is actually spot on and not something any reasonable person could disagree with. What's more, given questionable productivity impact of Labour’s investment programme there's a very real 'value for money' issue the Conservatives are well-placed to exploit. They just need to remember that if, like a dog with a bone, they bleat on and on about 'tax burdens' at every opportunity and it doesn't chime with the public as a real issue of concern, they do so at their peril.
Labels: Politics
2 Comments:
I think that’s right but to flesh it out a little, tax cuts read as job losses to the public sector, which is a disproportionately large part of the 800,000 or so who decide the election in the vital swing seats. There’s a dollop of realpolitik here as well . Cameron has concentrated on this small but pivotal constituency from the start,as he should, and there is evidence that he has had some success.
I would argue that Cameron has already placated the calls for tax cuts too much. There have been numerous references to simplifying tax, which is the politically navigable route to tax cuts, and there is scope for considerable wiggle within ,“Sharing the proceeds of growth “. Thatcher signed up to Callaghan’s spending, Blair promised no tax cuts , there are innumerable ruses to evade these rhetorical positions and voters instinctively understand this.
Indirect taxes are not something Conservatives should always be against and historically they have been the preferred tax of the wealthy for obvious reasons. In a modern context they provide revenue and maintain choice. On the other hand they are reggressive ,deter growth , distort the market and fall back in depressed periods . More seriously they break the link between government money and taxpayers money by obscuring the point of taxation. Some reform is certainly needed for the last reason but this would be a gradual process.
BTW On Orwell like everyone else I had read most of it twice by the time I left school. His ‘clear pane’ image suggests 'meaning 'lies behind the text which we look ‘through’ not at. This is an almost Victorian view of language. He was closer to the truth with New Speak which directly equates words and allowable concepts.
In my not very humble opinion
Thanks NM - and for once I don't think there's much disagreement between us. The UK's never really been that comfortable with the common US notion of 'our tax dollars' and an almost aggressive scrutiny over how they're spent and I'm not sure that's a bad thing.
On Orwell - I read that essay once or twice a year and it's my style bible. Can't say I always live up to it but you can only try...
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