“These modes of taxation, by stamp–duties and by duties upon registration, are of very modern invention. In the course of little more than a century, however, stamp–duties have, in Europe, become almost universal, and duties upon registration extremely common. There is no art which one government sooner learns of another, than that of draining money from the pockets of the people."
“All taxes upon the transference of property of every kind, so far as they diminish the capital value of that property, tend to diminish the funds destined for the maintenance of productive labour. They are all more or less unthrifty taxes that increase the revenue of the sovereign, which seldom maintains any but unproductive labourers; at the expense of the capital of the people, which maintains none but productive."
So wrote Adam Smith over 300 years ago. Still the problem persists today, and even though Nicholas Gibb wrote this report into Stamp Duty two decades ago it is still pertinent today. Quite simply it is a call for the abolition of Stamp Duty.
In this article Eamonn analyses Ed Miliband's speech to the CBI and argues that Ed's solutions to encouraging economic growth are very much along the same lines as Gordon Brown's. Eamonn proposes instead that in order to re-skill Britain we need politicians to let business people get on with the job of wealth-creation, whilst cutting the burden of regulation and taxation.
Former Education Department special adviser Stuart Sexton says that parents should be empowered to seek out the most appropriate school for their children, and schools should be incentivized to meet their demand. But how, when many people cannot afford to become active ‘customers' in the education market?
Give parents an Education Cheque to cover the cost of their children's education. Let them choose the school they want. Let schools strive to satisfy parents, as customers. And let them use the parents' education cheques however they want in running and developing their schools. In other words, let the funding for schools come bottom-up from parents, not top-down through layers of Whitehall and local government.
International evidence suggests clearly that increases in capital gains taxes above a very modest level result in decreases in revenue. Similarly, if capital gains tax rates are set above a relatively modest level, then their reduction will involve an increase in revenues. This paper uses new evidence from Ireland, Sweden and Switzerland combined with existing analysis from America, Australia and Britain to try and identify more precisely the revenue consequences of CGT increases in the UK. It looks at both revenue losses from capital gains tax and from other taxes.
Britain must get off the back foot in EU negotiations and positively advance its own vision of what the EU should be like. While other countries vigorously promote federalism, Britain is reduced to being a permanent critic - the Grumpy Old Man of Europe. Instead Britain should be linking with other countries to advance its vision of a common market, open trade, cost-consciousness, better decision-making, and deregulation. These goals would be as good for the whole of Europe as they would be for Britain. Instead of a fruitless debate about pulling out of the EU, we should be striving to end protectionism and make it a paragon of open markets, free trade, and efficient administration.
Ian Powell (pictured left), the newly appointed chairman of PWC, Britain’s largest accountancy practice, warns that our competitiveness is seriously damaged by a combination of increased regulation and uncertainty over taxes. Accountants are one of the main beneficiaries of excessive regulation – many businesses are obliged to employ them to advise on how to comply with the plethora of new regulations issued by national and EU authorities.
In the longer run, however, over regulation shackles GDP and, in turn, accountants’ fee income from audit and consultancy services. It is therefore highly significant that PWC’s chairman is saying enough is enough. Referring to the threats posed to the UK economy Powell observes, “The quantity and scope of regulation combined with the level of uncertainty and complexity in this country’s tax system are particular causes for concern”.
Meanwhile, yet another hedge fund - Krom River – announced it was relocating from London. In this case, the winner was Zug in Switzerland (pictured right). Mounting tax bills and Switzerland's more conducive regulatory regime, which was recently overhauled, were given as the principal reasons for the move. [Cont'd]
Big bureaucracies are notoriously difficult to reform. They have their own ways of working, and even though these might be 50 years out of date, the time and cost of moving to new ones can be seen as prohibitive by all who work in them. State bureaucracies have it harder than most, because they do not face direct pressure from customers, and do not see their finances ebbing away when they provide a poor service, since most users have no real alternative.
Governments should aim for zero inflation, since even moderate inflation leads to higher interest rates, business failures and ultimately higher unemployment. 5 years before the Bank of England were granted nonminal indpendence, Charles Hanson called for monetary policy to be given over to them, as successfully deomonstrated by New Zealand.
Britain in 50 years time still be independent, still a monarchy, and still close to America, but will no longer be influential, and may no longer make waves in science, technology, art or culture. These are among the findings of the new survey conducted by MORI for the Adam Smith Institute. It presents a detailed picture of how the British public see the unfolding century. The report covers issues such as progress, living standards and the welfare state. The young are noticeably different from their elders. They are more optimistic.
The Adam Smith Institute is the UK’s leading libertarian think tank...
