Labour's 15% Death Tax - Declare The Pennies On Your Eyes

Now my advise for those who die

Declare the pennies on your eyes

"Cause I'm the taxman

Yeah I'm the taxman

And your working for no one but me

 

Beatle fans will recognize those famous lines from their song Taxman which was penned by George Harrison in response to the extortionate rates of taxation in 1960's and 70's Great Britain. The country was being (mis)governed in those days by an alternating mix of a dripping wet Conservative government led by Edward Heath and a rabidly socialist one led by Harold Wilson.

It was the Wilson government and his ex-Communist Chancellor of the Exchequer, Denis Healey, that took punitive taxation to whole new levels.

"I warn you that there are going to be howls of anguish from those rich enough to pay over 75% on their last slice of earnings" was one of his more infamous quotes.

His most famous quote of all that "Labour will squeeze the rich until the pips squeak" has gone down in the annals of British political history even although Healey claims he was misquoted.

He was unfazed by the warnings that his tax proposals were putting the party's electoral chances in jeopardy and declared that the party and the country must face the consequences of Labours policy of the redistribution of income and wealth. "That is what our policy is, the party must face the realities of it".

The rest is history, Labour won the election, income tax was increased to 83% and combined with a 15% surcharge on investment income and dividends this led to a 98% marginal rate of personal income tax. The rich fled in their droves into tax exile, the government ran out of other peoples money and they were forced to go begging, cap in hand, to the International Monetary Fund for a loan.

(Labour taxes here. Tax exiles here.)                                           

It was an abject lesson for everyone, including the most dedicated Labour voter, on how socialist policies always end in economic collapse, bankruptcy and hardship for the majority of hard working people.

One would have thought that future Labour governments would have learned from the disaster of their predecessors, but despite a new generation of young, wealthy, privately educated political operators, backed by a media savvy PR machine, they made exactly the same mistakes.

In order to fulfill the requirements of their socialist ideology, the 1997 Blair/Brown government raised tax rates and opened the floodgates of spending. They introduced over one hundred new taxes, one of which removed over one hundred billion pounds from the private sector pension schemes, destroying them in the process.

Using stealth as a weapon, they used fiscal drag to ensnare more working people than ever into the 40% tax bracket and when National Insurance contributions are added they have an effective rate of 52%. This doesn't include the employers contribution paid on their behalf.

Out of the remainder of their earnings the people were forced to pay a compulsory Council Tax, VAT @ 18% on all but a few goods and services, car tax, a television tax, a fishing rod tax. There's excise duty on vehicles, fuel, alcohol, tobacco and betting. VAT is added after excise duty resulting in a tax being taxed itself.

Using a tool called the fuel and alcohol duty escalator, duty was increased on fuel and booze by 1% above inflation every year, adding VAT to the new price increases the cost further.

Stamp duty is charged on the transfer of shares, securities and land. House sales above a certain price attract stamp duty.

Airport Departure Tax was introduced and is now one of the highest on the planet.

Kicking the bucket opened up new avenues for the government to confiscate the fruits of other peoples labour. Estates over two hundred and fifteen thousand pounds are subject to a mind boggling 40% Inheritance Tax. This is money that is left over after the politicians have already taken their cut.

In addition to all this there are Corporation taxes, Capital Gains taxes and a myriad of other schemes the government use to separate the people and industry from their hard earned money.

Despite all this taxation the Blair/Brown governments ran out of other peoples money and bankrupted the nation yet again, saddling it with insurmountable levels of debt for future generations to pay off.

It isn't just a theory that high government spending combined with punitive levels of taxation leads to economic collapse, bankruptcy and hardship for the majority.  It has been demonstrated by socialist governments past and present, both at home and abroad. One would think that these expensively educated scholars armed with the mandatory Politics, Philosophy and Economics degree would understand this.


Obviously not. In a recent radio interview, the Deputy Leader of the Labour Party, Harriet Harman, announced that should her party win the forthcoming election, they would raise middle class taxes in order to finance yet more government spending. In the same week the Shadow Health Secretary, Andrew Burnham proposed a 15% death tax to finance elderly care.
(A Death tax story here)

The Liberal Democrats want an inappropriately named 'mansion' tax regardless of the fact that many middle income people live in ordinary residences that increased above the tax threshold due to the unprecedented house price boom of previous years.

This level of taxation is unsustainable as the country has reached the point where there are more people riding in the wagon than pulling it. Unscrupulous politicians stir up class hatred and feed on people's envy as a solution, but taxing the so called 'rich' is only viable until the last 'rich' man has had his pips squeaked. The threshold for being classed as 'rich' will be set so low that anyone earning above the minimum wage will find themselves in the 40% bracket.
(Taxing low paid workers story here)

The truth is that the British government doesn't have a revenue problem but a spending one. The political class steadfastly refuse to live within their means as this will require spending cuts to their various client groups with a potential loss of votes.

A bigger worry for the political class is that cutting taxes will lead to a prosperous majority and this is a transfer of power from them to the people, they will become less relevant and the people will control the agenda as opposed to the politicians.

Politicians will continue to ignore the rules of fiscal arithmetic that the rest of us have to live by and continue to spend more than they earn in revenue in order to extend dependency.

Prosperity for the majority puts the fear of God into the political class and their armies of bureaucrats. Dependency on government is the life blood of the modern politician, it gives them a hold over the people and political power for as long as they can get away with it.

Listen to the Beatles sing Taxman here, turn up, the volume and sing along out loud.