Thoughts on politics and life from a liberal perspective

Tuesday, 4 January 2011

Lib Dems get all of the blame and none of the credit

This comment (by timak on a Lib Dem voice post about whether VAT is regressive) is quite instructive as an indication of how very often the Lib Dems get the blame for things that are not really their fault whilst getting no credit for the influence they have had in government. I have quoted the comment in full below:

I used to believe the Lib Dems were on the side of social justice, progress politics and equal opportunity before I started to read this site.

40,000 families own 70% of this country, both in assets and investment terms.

If they sell or trade these assets they are taxed at 28% (above 10k per annum) as a capital gain, this is naively assuming the assets are not held in a more tax efficient structure.

If I want to buy £100k worth of the assets, as a lower rate tax payer I would have to earn £140k (£35k for 4 years) as tax plus NI comes to 35% of my salary. If I were a higher rate payer this would be nearer £200k.

The person selling the assets would have to pay a maximum of £25k in tax on their £100k profit whilst I’d be paying £40k-£100k in tax to earn enough money to buy the assets.

Why do we tax income and not unearned wealth?

So essentially the Lib Dems are being blamed here for the entire tax structure of the UK despite the facts that:

a) The Lib Dems have only been in government for just over 6 months.
b) They are a minority partner in a coalition.
c) Before that they had not been in any form of national UK power since WWII.

Whilst simultaneously the comment gives no credit for the fact that the 28% capital gains tax rate that is referenced is only at that rate because of the Lib Dems. It was at 18% before the election and as part of the coalition negotiations it has gone up by 10%. That is by any measure a progressive and socially just thing to do. OK, so it's not all the way up to the 40% the Lib Dems would have liked but it is a lot higher than it was and almost half way to where we wanted it to be which considering we have less than 20% of the MPs in the coalition is a pretty good deal.

But there is no credit for this at all. Just criticism for what the party has not done, much of which would be politically impossible.


eastender said...

oh didums, who said politics had to be fair. You choose to be in government now you have to take the flak that goes with it

Anonymous said...

Unfortunately the Lib Dems were helped by far left moronic `projectionists` (that's if this person voted Lib Dem at all) that think that all you have to do is `change the tax system`.

Perhaps it'll be better if we got by without these votes as they simply neuter the only long-term project in town - using liberal conservatism to do what Labour were afraid to do - to get rid of the deficit so that we don't have the sword of damocles hanging over us and have a freedom to do more of what we want - ie build a liberal capitalist economy/society that protects those that do/can't and sidelines those that simply can't be bothered to get up and do stuff.

It's a tough message - if you want to have goodies you have to pay for them.