by Stephen Tall on February 14, 2012
Over at The Spectator, Jonathan Jones looks at the US and UK approaches to their forthcoming budgets — cutting the deficit, taming debt, etc — and his fourth and final point concludes:
Obama the Lib Dem. It’s striking how similar Obama’s tax priorities are to those of the Liberal Democrats, even though the specifics differ either side of the Atlantic. Obama wants to extend the payroll tax cut for ‘160 million hardworking Americans’, which he says is worth ‘about $40 in every paycheck’ for ‘the typical family earning $50,000 a year’. The Lib Dems have been pushing to raise the income tax personal allowance to £10,000 ‘saving working people £700 a year’. Obama wants to close loopholes and reduce tax deductions for high earners, as well as increasing the capital gains tax rate from 15 per cent to 20. The Lib Dems have already succeeded in raising capital gains tax from 18 per cent to 28, and Danny Alexander is now calling for a lower rate of tax relief on pension contributions for high earners. As I say, the similarities are striking.
“The similarities are striking.” They are indeed because the Lib Dems (like Obama) have identified a sweet spot in tax policy.
The position is simple: reward the lowest paid to ensure that work pays, and fund it by taxing the wealthiest in society (NB: not by jacking up higher-rate income tax but by ending tax benefits which accrue only to high-earners).
It’s an excellent match of economic liberalism and social justice that can be supported by any of the flowering groups in our party. Heck, we might even win back Daniel Radcliffe’s support if he realises we’re just like Obama really.