Questions for the Lib Dems
- 9 Jun 06, 09:19 AM
No-one can complain that the . Have they, though, been wise?
On Thursday, they promised to make dramatic income tax cuts costing around 拢18 billion, paid for by a dramatic increase in green taxes - approx 拢8bn - and taxes on the wealthy - approx 拢10bn.
After speaking to the boffins at the Institute of Fiscal Studies I'm left with the following questions :
1: If the green taxes work - that is, they limit polluting behaviour - won't they raise less and less over time?
2: Why do they say they're helping the poor when the poor don't pay tax and therefore won't benefit from tax cuts? Since the poor do, however, pay green taxes to drive cars, won't they need to be compensated for the switch?
3: If you take these announcements together with the Lib Dem policy of replacing the council tax by local income tax, won't the real gainers be the politically sensitive middle group, whilst the rich will suffer and the poor won't gain?
4: Even so, will they ever persuade people of this? Whether you are a winner or a loser from the Lib Dem reform package will depend on an awful lot of variables (how much you earn, where you live, the size of your house, whether you have shares and other property, how much pension saving you do, whether you drive, whether you holiday abroad etc). The Lib Dems got in an awful mess trying to explain their local income tax changes at the last election. Won't this prove even harder and provide more nasty bits for the other parties to isolate?
The detailed plans aren't out till next month so answers may not come till then - but at least they've given us something to think about.
One last question. Given that the party desperately wants to contrast their serious policy development with what they call the Tories superficial spin, did they really have to have Ming marching in to music and cheering before a promo video of his colleagues telling us how marvellous he is?
