CAN THE BRITS TAX THEIR WAY OUT OF DEBT?
Cameron Says Further Action to Be Taken on Taxing the Rich
By Kitty Donaldson and Robert Hutton, from Bloomberg
U.K. Prime Minister David Cameron said his government will announce additional measures to increase taxes on the rich, while ruling out a so-called mansion tax wanted by his Liberal Democrat coalition partners.
“We are going to take further action to make sure that the richest people in our country pay their fair share towards deficit reduction,” Cameron told the BBC’s “Andrew Marr Show” today as his Conservative Party began its annual conference in Birmingham, central England. He said he didn’t believe that people who saved and bought large houses should be hit “every year with a massive great tax. That’s not going to happen.”
The Conservatives have lost voter support since a cut in the top income-tax rate in the March budget allowed them to be painted as the party of the rich. Cameron’s refusal to accept a levy on the most expensive properties risks increasing tensions with the Liberal Democrats, who say they will only support further cuts to welfare if he introduces new wealth taxes.
The prime minister pointed to moves to stop tax evasion, remove reliefs and increase stamp duty — a tax on house purchases — on large homes as examples of measures his government has already implemented.
He said the rich “are paying a greater percentage on their total income than they ever did” under the previous Labour government. He defended reducing the top rate of income tax to 45 percent from 50 percent on the grounds it was “completely uncompetitive.”
Labour Attacks
The leader of the opposition Labour Party, Ed Miliband, last week used his own keynote conference speech to accuse Cameron of “writing a check to each and every millionaire in Britain for 40,000 pounds” and pledged to keep the income-tax rate at 50 percent if Labour takes power in 2015. He said Labour is now the party best able to represent people of all backgrounds and incomes.
Two polls published today showed Labour extending its lead following its conference. A YouGov Plc (YOU) poll in the Sunday Times found 45 percent of respondents saying they would vote for Labour, 31 percent favoring the Conservatives and 8 percent backing the Liberal Democrats.
An Opinium poll in the Observer newspaper put Labour at 41 percent, the Conservatives at 30 percent, and the Liberal Democrats at 9 percent. YouGov polled 1,782 people Oct. 4 and 5, and Opinium surveyed 1,965 adults Oct. 2 and 4.
Deputy Prime Minister Nick Clegg’s Liberal Democrats want to levy an annual 1 percent charge on houses and apartments valued at 2 million pounds ($3.3 million) or more. Chancellor of the ExchequerGeorge Osborne said the proposal would end up hitting people who are not wealthy.
Modest Homes
“It’s going to be sold as a mansion tax and then after the election, a lot of people in Britain with more modest homes are going to wake up and find they’ve been reclassified as a mansion,” he said in an interview with Sky News today.
He said the rich will have to make a big contribution to closing the budget deficit, though, with a further 16 billion pounds of savings required in the 2015-16 fiscal year, the government will need to consider more cuts to welfare and departmental spending.
In separate announcements, Cameron said the government will freeze local-authority tax in the year starting in April, meaning the average family’s so-called council tax bill will be 72 pounds lower next year than it otherwise would have been.
If councils choose not to hold down the levy, they could face the prospect of putting their planned increase to a public vote, Cameron’s office said.
Dr. Pinna says:
The Brits are now following the French in attacking the wealthy. However, it is too little and too late. The amount of debt involved is too enormous for any special group to pay—for that matter, the entire country cannot pay the debts involved. The people of the West should be prepared to go down several levels in their living standards!
We Westerners will soon be living like the people of Latin America and the people of Africa and those poorer countries of Asia. This is a new world economy and we have nothing to offer the world for their resources.
Europe and the USA used to be farming countries. Unfortunately, farming land has been turned into suburbs, so we can’t go back to that.
Get ready to lose weight.
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