Douglas Carswell's Blog

The budget; keeping things in perspective

Will there be a mansion tax?  I hope not.  Is the 50p rate of income tax going to be cut?  I hope so.  Will families be free to keep more of what they earn by raising the income tax threshold?  Yes, please.

These are all important questions, and they could make an important difference to many people.  But by focusing on them, aren't we in danger of being side tracked by the tactics, rather than asking the big strategic questions? 

Add up the total amount of revenue being briefed and debated.  A mansion tax is expected to generate £1 billion, the 50p income tax rate £2.4 billion.  Add in the £11 billion revenue the Treasury would lose by not taxing people on their first £10,000.  The total amount of tax being argued over is less than £15 billion.

Most of the headlines have been about approximately 2.6 percent of the total tax taken by the government last year.

The £15 billion being briefed about equals less than the amount by which government tax receipts rose over the past twelve months alone.  It amounts to a mere fraction of the £81 billion rise in the tax take that has happened since Gordon Brown's last year in office. 

Back in 1997, government collected £316 billion in tax.  This year it will take not far off double that amount, £575 billion.  By 2015-16, the state will take £119 billion more in tax than it takes today. 

Too often the debate about tax has been largely symbolic, politicians using it to send messages about where they stand.  We need instead to debate the fiscal fundamentals. 

Why, we ought to ask, are we prepared to keep handing over ever larger sums of money to public officials in Westminster and Whitehall in the first place?

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