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Clegg: Tax Cuts Financed by a Cliché Tax

John Rentoul

DPM 26Jan IFG Speech 0628 300x200 Clegg: Tax Cuts Financed by a Cliché TaxNick Clegg is one of the worst offenders against the Banned List of clichés and jargon. His speech today on “supporting working families” (Government news release) or on “tax” (Liberal Democrat party release) was a stinker.

We cannot “return to business as usual”, he said; the UK’s weakness was a “damning indictment” of the way our economy had been run; we have got to be “hitting the reset button”, “filling the black hole” (you cannot fill a black hole, a point of such density and intense gravitational pull that not even light can escape), “wiping the slate clean”, and those three were all in one paragraph.

Not only that, “we must also rebalance our economy”. As soon as any politician starts talking about rebalancing the economy, you may safely change channels, knowing that they are not saying anything, except, possibly, “Wouldn’t it be nice if we were still Top in making things in this country and had an empire and stuff?”

After a refreshing defence of uprating out-of-work benefits, which nevertheless flatly contradicts his stated desire to increase incentives for people to move from welfare to work, it got worse.

The pressure on family finances is reaching boiling point.

Pressure does not reach boiling point; higher pressure raises the boiling point. So what he meant was that, as the pressure on family finances increased, the kettle was less likely to boil. Possibly. Or not, because he went on to say that “Household budgets are approaching a state of emergency”. Therefore, the sluggish economy increases the case for tax cuts. So he agrees with Ed Balls, who thinks we need an urgent stimulus.

Except, of course, that is not what he is arguing for. He wants a tax cut for people on middle incomes paid for by money from the magic tree. Otherwise known as:

Tackling industrial-scale [Banned List klaxon] tax avoidance as well as at the allowances and reliefs which favour those on very high incomes.

He went on:

That is how we can raise the average taxes paid by the very rich without any further rise in marginal rates.

As you may have gathered by now, that is the precise opposite of the policy he proposes. He wants to raise the personal allowance, the threshold above which you start to pay income tax, further and faster towards the goal of £10,000 a year. This has contradictory effects – it benefits the lower paid but it also benefits a lot of well paid people, especially two-earner couples. But it also has the effect of raising marginal tax rates on the “medium rich”.

Pay attention.

At the moment, in order to prevent the better paid from gaining from a bigger personal allowance, the allowance is phased out between incomes of £100,000 and £112,000. This means that, in effect, the marginal rate of income tax (the rate applied to each additional pound of income) rises from 40p in the £ up to £100,000 a year to 60p in the £ until the allowance disappears. Then the marginal rate returns to 40p between £112,000 and £150,000 a year, when the 50p rate comes in. The effect of Clegg’s tax cut, raising the personal allowance at the bottom, is to increase the width of this hidden 60p tax band. If Clegg realises his inconsistency, I suppose he hopes that the Conservatives, who care about incentives at this sort of level, won’t notice.

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  • http://twitter.com/mswinhoe Mark Swinhoe

    Is ‘damning indictment’ really a cliche?  Simply a collocation, no? Otherwise entirely agree, Clegg is politically bankrupt anyway.

  • http://www.facebook.com/people/Geoffrey-Harrison/665801094 Geoffrey Harrison

    You really need to pay attention yourself.

    Like so many people you seem to think that the tax system should operate asymmetrically.

    That is that all tax rises should only ever hit upper earners and all tax cuts should only ever benefit lower earners.

    If the Chancellor raises the tax threshold then he raises the threshold and fiddling of the kind you propose is fundamentally dishonest.

  • http://twitter.com/elbapo john bailey

    I actually am stasrting to respect clegg a little more after this. It would make an ingenious game of political cliche bingo, which could liven up speeches no end. I think I have a full house already. Or – imagine the potential for drinking games at conferences

  • http://twitter.com/GuidoFawkes Guido Fawkes

    Some of us think income inequality is much under-rated.

  • AlanGiles

    Talking of cliche’s does anyone remember “For the many not the few” or “hard choices”.

    They frequently escaped from the mouth of our former spiritual leader Blair, but I doubt Mr Rentoul would worry too much about them

  • Lynnelc

    I would give a lot to be anywhere near benefiting from a raising of the tax threshold -instead of managing to live  on a pension of £113 a week.
    Many pensioners must wonder at those who can not manage on £26,000 a year.

  • maggiemay9

    I too watched Nick Clegg wearing his Deputy Prime Minister hat or was it his Liberal Demorcrat hat or just his normal I have a dream Nick Clegg hat this morning on BBC TV.  Anyway the end result was I ended up being totally confused, annoyed and bewildered by such an inconsistent and ridiculous display of maybes or maybe nots, sometime or somtime nots.  Perhaps I should just log into confused.com.
    Margaret Y

  • maggiemay9

    I too watched Nick Clegg wearing his Deputy Prime Minister hat or was it his Liberal Demorcrat hat or just his normal I have a dream Nick Clegg hat this morning on BBC TV.  Anyway the end result was I ended up being totally confused, annoyed and bewildered by such an inconsistent and ridiculous display of maybes or maybe nots, sometime or somtime nots.  Perhaps I should just log into confused.com for clarification.

  • Kejoy

    In South Africa ‘Silence’ is always ‘Defeaning’, speakers always deliver ‘Keynote Speeches’.  There is a myriad examples of lazy writing.


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