Blog Archives

The faux-conservatives and the squishy tory-liberal coalition

Now I know I like to cite Dan Mitchell from the CATO institute a bit too much. But he has correctly pointed out that the UK is a good model for showing how the laffer curve works.

A funny thing often happens on the way to soaking the rich: They don’t stick around for the bath. Take Britain, where Her Majesty’s Revenue and Customs service reports that the number of taxpayers declaring £1 million a year in income fell by more than 60% in fiscal 2010-2011 from the year before. That was the year that millionaires became liable for the 50% income-tax rate that Gordon Brown’s government introduced in its final days in 2010, up from the previous 40% rate. So, the total number of millionaire tax filers plunged to 6,000 in 2010-2011, from 16,000 in 2009-2010. The new tax was meant to raise about £2.5 billion more revenue. So much for that. In 2009-2010 British millionaires contributed about £13.4 billion to the public coffers, or just under 9% of the total tax liability of all taxpayers that year. At the 50% rate, the shrunken pool yielded £6.5 billion, or about 4.4%.

Image

He also points out the three main points which explain why the laffer curve works:

  • When tax rates increase, sometimes people engage in tax avoidance, lowering their tax liabilities legally.
  • When tax rates change, sometimes people choose to alter their levels of work, saving, and investment.
  • And when tax rates go up, sometimes people resort to illegal steps to protect themselves from the tax authority.

Finally, I love how he refers to the current government as the squishy Tory-Liberal coalition. I now like to call the tory party the faux-conservatives. They could go much further with their tax cuts and reducing the burden of government but they seem to have lost their backbone.

Advertisements

The NHS has been making money, who knew!

The NHS is a taboo subject in the UK, even the most brave MP does not dare speak against it.

I saw a funny tweet earlier today from a labour party supporter:

The big tory lie: ‘We cant afford the NHS’. It has been in surplus for the past 5years and the treasury has clawed back £5bn

Image 

What the left don’t realise is the fact that the NHS making a profit is good news for the UK taxpayer. It is also good because that money can be used to reduce government debt.

I know this may be an unpopular view, but I think the UK could benefit from a private health service if it was part of a true free market. Also obamacare is a disaster before it has even started!

Image

 

Image

%d bloggers like this: