How do you like your tax cuts?
Take a look at the graphs below (from the Washington Post), and look past the obvious Republican vs Democrat arguments:
Obama and McCain Tax Proposals
According to a new analysis by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, Democrat Barack Obama and Republican John McCain are both proposing tax plans that would result in cuts for most American families. Obama's plan gives the biggest cuts to those who make the least, while McCain would give the largest cuts to the very wealthy. For the approximately 147,000 families that make up the top 0.1 percent of the income scale, the difference between the two plans is stark. While McCain offers a $269,364 tax cut, Obama would raise their taxes, on average, by $701,885 - a difference of nearly $1 million.
If one of the political parties in the UK were to present tax cut plans to us, quoting 2% vs 0.3% which one would you vote for? Now look at the way the cuts are spread over the income bands, now tell me which one looks the fairest to you? Which one actually supports the average family and those that need the money most?
I know Philippa would argue, from her tax experience, that such a large tax rise for high earners would have a detrimental impact on investment into this country, particularly within the financial sector. However, I can't help but see this kind of adjustment of the tax regime as being just what the UK needs right now...
Comments
From a personal point of view I would love the tax rates to favour families on middle to lower incomes but we need money from the higher earners in this country right now. My opinion only. Lots of people would feel differently...
One minor question is: How does a tax increase of $701,885 on an income of $2.87M equate to 11.5%? I work it out at 24%, but without reading the Tax Policy Centre article I am probably missing something. Also, is it really worth hitting the top 0.1% of earners with a 24% increase in taxes? It will alienate a tiny number of people, probably real wealth creators, and generate very little actual revenue. Its only purpose seems to be to tell the electorate "Vote for us and we'll sting the nasty rich". While I would like to see the wealthy take on a bigger proportion of the care of the underpriviledge, I don't feel this is the right way to do it. It just seems to be a divisive policy for the sake of divisiveness.
Having just watched the news and see a baby go home at 14 months old, who was born at 22 weeks, I have more concern over the Democrats policy in favour of abortion, and also over their anti-family policies, that, in my opinion, and those of an increasing number of reports, will cause serious destruction to American culture.
But let's hope that blogs such as this continue to raise real issues, real policy differences that people can argue about, rather than people just voting on the candidate who has the best TV appearance.
We could reduce UK taxes at a stroke, by using two measures.
1) Disband all quangos. Although it is difficult to get at Westminster Government figures for the cost of quangos, because the Westminster government does not assemble figures in Quango costs in a coordinated manner, if you dig deep, you will find that their annual cost is over 10bn GBP.
2) Stop paying 10bn GBP contribution a year to the EU - that is a Westminster government figure - and reap the benefits of lower regulation and move out of the protectionist eurozone so that the 5th largest economy in the world can once again trade fairly with the global economy, outside of EU tariff barriers.