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Sunday, July 12, 2009


Copy via Guido of a NOTW article flying a kite that the Tories will drop their promises to their minor inheritance tax cut & married couple tax allowance increase.

DAVID Cameron has SHELVED plans to cut taxes for struggling families, the News of the World can reveal.

The Tories pledged to slash Inheritance Tax — their flagship policy — and Stamp Duty as soon as they came to power.

But they have now mothballed the moves for as long as SIX YEARS.

And other plans to give tax breaks for married couples have also been put on the backburner, possibly even for A DECADE.

Conservatives will blame Labour’s handling of the economy for the delay. It is part of a drive to find multi- billion spending cuts to curb soaring national debt.

Shadow Chancellor George Osborne set out plans to raise the threshold for INHERITANCE TAX from £300,000 to £1million in 2007.

The eye-catching pledge transformed Tory fortunes in the opinion polls, setting them on course for No10.

In a major speech to the Tory party conference, Mr Osborne also promised to scrap STAMP DUTY for first-time buyers on homes worth up to £250,000.

In a letter to Gordon Brown just days later, Tory leader Mr Cameron said the cuts would be introduced as soon as they took power. He asked the PM for permission to hold talks with civil servants so they could get working on the plans right away.

He wrote: “In particular we will want to give officials the opportunity to prepare for the implementation of our IMMEDIATE PLANS . . . to reform the tax system.”

Cameron was so keen to get cracking he asked the PM for a reply by the end of the day. But now, instead of introducing the plans right after the election, the Tories will put them off until the end of the first Parliament — as late as 2015.

A Tory spokesman confirmed: “The cut in Inheritance Tax will not be brought in straight away. It will be in the first Parliamentary term.”

This is very bad not just because they are popular but because they are good for the country. The country's problem is that we have such a massive parasitic state sector & the way to fix the economy is to drastically prune it not to keep high taxes & thus keep smothering the small productive sector we have. To quote Milton Friedman "I am favour of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible" because individuals usually spend their money more economically efficiently than government.

What the Conservatives should be doing is pruning government drastically, particularly on the regulatory front where the economic damage to those regulated is 20 times greater than the substantial cost to the taxpayer of employing them. Then putting the money into carefully crafted tax cuts which would include these & substantial corporation tax & possibly business rate cuts. That alone would get us out of recession & into strong growth. I will now quote from Gordon Brown "this is where the serious debate lies—that what can happen depends on growth." Brown says he thinks it more important to "invest" in growth than to balance the budget - and so it is - the only problem that what he calls "investment" isn't it is merely increased spending on the parasitic sector. A large amount of borrowing is survivable if the economy is growing because it gets ever easier to pay off with real wealth. The Conservatives tax cutting promises & the much more serious ones I have suggested would produce strong growth & growth, alone, can get us out of this mess. Reagan went for tax cutting even though it increased the deficit & it worked, despite opponents denouncing it as "voodoo economics" giving the USA a major growth spurt. I would much rather have the budget balanced than not but a growing economy should be the first & overriding priority.

Another quote from Nigel Lawson which David Cameron would do well to consider.
a sensible opposition party should be more concerned with re-election than with election to office. Election will occur as and when the people lose confidence in the incumbent government. Re-election depends on results.
On that basis, or almost any other, Cameron is going to become PM. e will inherit a horrendous mess, worse than it now appears because the borrowing is cosmetically enhancing our economy but that cannot continue. To get re-elected next time he cannot simply make cuts & hope to plow on in the old way hoping the electorate will keep blaming Labour for the mess. Perhaps they should but in another 5 years time they won't.

Cameron should use his first hundred days for massive cuts in the bureaucracy, for putting through the tax cuts he has promised & for cutting business taxes & going for growth. It is politically possible to do it on day 1 but becomes ever more difficult thereafter. A final quote from Machiavelli, who understood more on the subject of getting rid of the damaging part of government than any spin doctor.
Prince David Cameron ought to examine closely into all those injuries which it is necessary for him to inflict, and to do them all at one stroke so as not to have to repeat them daily; and thus by not unsettling men he will be able to reassure them, and win them to himself by benefits. He who does otherwise, either from timidity or evil advice, is always compelled to keep the knife in his hand; neither can he rely on his subjects, nor can they attach themselves to him, owing to their continued and repeated wrongs. For injuries ought to be done all at one time, so that, being tasted less, they offend less; benefits ought to be given little by little, so that the flavour of them may last longer.
100 days of cutting subsidies, regulations, fakecharities, civil servant numbers, civil service recruitment, planning committees, regulators, quangos, the Health & Executive, all the investigators who prevent us building nuclear power stations, the BBC, Ofcom, all the eco-fascist parasites & for good measure the EU would produce rioting in the streets of Chelsea but not elsewhere, national solvency, a fast growing economy & the Tories in power for 50 years.

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