News from British and Canadian Conservatives

Thursday, October 11, 2007

Tax Con not Tax Cut 2

Gordon Brown's last budget went down in history as a "Tax Con, not a Tax Cut", after he announced a series of tax cuts which, when the small print was included, acutally raised taxes substantially. However, now Brown's the PM, and he's told us that everything will be different. No more spin. Honest Government that we can rely on.

So why is it that, this week, the new Chancellor of the Exchequer has been at it again?

  • The Inheritance Tax cut turns out not to be a cut, just a rebranding.
  • The Capital Gains Tax cut will raise an additional £350 million for the Treasury by dramatically hitting the sale of business assets including small businesses when the owner wishes to retire. A retiring shop keeper will pay 80% more tax than before the "tax cut"!
  • Council Tax is to continue rising at double the official rate of inflation for the foreseeable future.
  • Business Rates could also rise, as Councils are to be given the opportunity to increase them by up to 5% - is there a corresponding opportunity to reduce them by up to 5%?
The Capital Gains Tax moves are the most damaging, I suspect. They will force many retiring businessmen into poverty, which is hardly an incentive for new, upcoming entrepreneurs to invest in new businesses. These new business start ups are the life blood of a vibrant economy and are the Microsofts of tomorrow. Moreover, the reduction in CGT on second homes serves only to prolong the boom which has already destabilised the economy and forced a generation of young people off the property ladder in many parts of the country. Sooner or later, the bubble has to burst and the more the government gerrymanders the system to delay the inevitable, the harder that fall will actually be.

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