More Balls about Tax

How refreshing that the economics debate has moved on. It used to focus almost exclusively on the rate of income tax, the 'penny on, penny off' debate that dominated for a decade or so. For the past year we have seen a genuine disagreement: about whether it is the rich or the poor who should shell out more of their incomes in tax. With the absence of a growth strategy, and no other thinking about responses to the economic crisis, the argument now turns to who should be the beneficiary of the tax cuts which are, apparently, our only hope.

Ed Balls is calling for a cut in VAT, encouraging us to spend more. As Osborne rightly responds, in a country that imports more than it makes, much of the tax thus diverted from the Treasury will not stimulate small businesses here, but increase growth in China. This gives the Tory backbenchers a wonderful opportunity to argue for tax cuts for their rich voters: ditch the 50p tax rate and reduce yet further the rates of corporate taxation. they bray from their leafy shires. This is justified on the basis of the entirely unsupported assertions that somehow allowing the rich to avoid paying back to society will encourage economic growth. But where is the evidence that they are less likely to buy Chinese goods than the poor? When the rich want their benefits evidence-based policy-making makes a swift exit.

This is a lovely opportunity for the mainstream parties to return to their familiar class-war tactics while missing the big picture. For a more imaginative Shadow Chancellor this might be a good time to think about taxing assets rather than incomes. We could see the bankers' bonus in that light, but far more productive in terms of loosening up the economy would be a tax on land. Andy Burnham proposed this more radical and creative option during his bid to become Labour leader; Miliband has not had the courage to adopt it.

Meanwhile, to the Tories you must ask what is the point of cutting corporate taxes when it is the small businesses that will create the jobs. In spite of the domination of the air-waves by corporate business, ONS data show that companies employing fewer than 50 people account for 97% of jobs in the UK, with less than 0.16% of people working in companies of more than 500 people. If the government is really interested in stimulating job creation rather than rewarding its paymasters it would adopt the Green Party policy of a banded economic tax related to the size of the company.
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A Woman's Place is in the Home (Office)

For all Britain's women politicians the state of the cabinet is a deeply depressing one. You don't have to be a rabid feminist to be concerned about the fact that only one portfolio was found for a woman and that it is the brief conventionally labelled 'home'. The after-thought of the token Asian female without portfolio just rubs salt into the wounds.

Having Yvette Cooper, clearly Labour's most competent and popular politician inside and outside the party, in the Foreign Office was some comfort, but now she, too, has been moved out of the three main offices of state, as though all that foreign travel might have been too much for her children.

What has made people most disatisfied about politics in recent years is the cronyism and apparent old boys' network. If the representative assemblies of our land were to be truly representative (meaning more that half of their members would be female, as well as having a fairer scattering of ethnic minorities), some of these concerns could be assuaged.

It is clear that couples where both aim to be politicians have difficult choices to make about their children's care. Neil and Glenys Kinnock and Tony and Cherie Blair were two couples who faced this decision - and in both cases the man became the politician. How refreshing it would have been if Ed Balls had been able to rise above his personal ambition and recognise that his wife has the makings of a much better politician that he does.
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A Load of Old Balls?

Puns like this could be everywhere by the end of the week, if they pundits are right and disastrous results for labour lead to a cabinet reshuffle that goes almost to the top. Gordon Brown's bag-man Ed Balls is a tabloid headline-writers dream - my colleague the Green Bean Counter worked with him at the Treasury many years ago and says they have a large collection or pre-made plays on his name they are no doubt willing to share.

Now Darling himself, whether fairly or unfairly, has been caught up in the gutter politics of allowances he is unlikely to survive. I was slow to catch onto the expenses scandal, considering it a distraction from the real issues and an example of political displacement activity. But it seems to be more of a touchstone for a general resentment with the unequal nature of our society and a token issue for the backlog of fury and disillusionment that the economic and financial crisis are causing.

The journalists and the public have the wrong target, but their anger is valid. The rage against the unfair distribution of resources may be expressed in terms of moats and duck-houses but has been seeded by the fury at the realisation that the elite class in this country have created a framework of laws and regulations that has enabled them to extract the value of the economy that the working people of the country have created.

My accountant friend informs me that 'flipping' your primary residence to avoid Capital Gains Tax is quite within the rules, and that people who are privileged enough to have two houses do it all the time. (I do live on the edge of the Cotswolds, remember.) The public revulsion is not that people have done anything illegal but that the laws that make this acceptable are laws designed by the rich to benefit the rich. The Capital Gains Revenue that should have paid for hospitals and schools was legaly, but immorally, avoided. Tweet