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Written by Tom Clougherty
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Saturday, 13 October 2007 |
It seems that the Conservatives' proposals to raise the inheritance tax
threshold were very popular with the public, and may have been one of
the main reasons for the sudden turn around in the polls. This has led
many people to argue that tax cuts are back on the agenda, that the
size of the state is once again up for argument, and that the
ever-higher public spending consensus has finally been punctured.
Well, maybe. But why was it inheritance tax that made the breakthrough?
Yes, it's a particularly unjustifiable tax, but in the grand scheme of
things it's a fairly minor one. I suspect the reason inheritance tax
has become so (rightly) vilified when others have survived unscathed is
that IHT is one of the few taxes were people actually have to write out
a cheque. Council tax is another one – and it regularly ranks as the
most hated tax of all.
So perhaps the best way of getting people to vote for tax cuts, year on
year, is to make the taxes we pay as visible as possible. So rather
than deducting income tax and national insurance at source, people
would pay a monthly tax bill alongside their bills for gas,
electricity, telephones and so on. They'd soon be demanding a flat tax
that way.
To stop people being fooled by stealth taxes, perhaps price labels
should not include tax – as in America. Or perhaps they could display
both the pre-tax price and the post-tax price. Imagine how people would
feel confronted with the reality that every time they buy something,
the government takes 17.5 percent. Imagine them realising that petrol
should only really costs 30p a litre. Suddenly those billions the
government pours down the drain would seem all too real.
Something tells me cutting taxes and reducing state spending would quickly become very popular indeed.
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