For a quick SCARY laugh…

 

This may be aimed at the numerous irrational Americans, but there is something in the video for us to pause and think about…

What’s Laffer got to do with it?!?!

There will be no reduction in the tax burden for five years, states Chief Secretary to the Treasury Danny Alexander in an interview in the Observer.

‘The tax burden is necessary as a significant contribution to getting the country’s finances in order. So, it will have to stay at that level for quite some time’.

When asked whether or not a reduction in the overall tax burden would be possible once the nation’s books were back in order, Alexander adds: ‘You are asking me to make decisions for five years down the line now and I am not going to do that. What I want to see is a rebalanced and fairer tax system. That is what I think is most important’.

Now the economic times are dire, yes – but that really was a counsel of sheer despair. It’s hard to give Alexander credit for his glass thoroughly half drained future outlook… Perhaps the coalition is running the risk of being bitten by its’ own negativity?

MPs concerned with their left flank constructed a budget with “progressive” stamped all over it. When that notion was challenged, by the IFS, they then had to elaborate- claiming that they have no intention in cutting the tax burden or moving towards that direction for at least five years. So, they can only prove that they are being “fair” by being redistributive. Anyone who suggests there is another way surely must want to stamp all over the faces of the poor…

But surely the answer to Britain’s deficit and other problems is not a constraint on public sector spending. The answer may just be sustained growth.

Fortunately/unfortunately, whatever, Britain’s economic success is linked to global demand, and developments in the U.S., in China and of course, in European economies such as Germany (with enviable levels of economic growth). Wealth is also not just created by governments but by the individual and enterprising companies, propelled by what Keynes called “animal spirits”.

However, the government does have control over the tax system. It can keep tax levels high to make a political point, you know -“fairness,” but only at the cost of inhibiting growth. A high tax take and tax rates, more recently known fondly (!) as banker-bashing policies will just have the bankers quietly running to the arms of other nations, think Switzerland and the East…

Maybe, just maybe, Alexander needs to get acquainted with Art Laffer, (still alive) the economist of the Laffer Curve fame. The curve points out, among other things, that the best way to increase revenue was to get the rich to pay less tax… No, NO, LET ME FINISH – the curve points to incentivising wealth creation by lowering taxes, domino effecting growth in a positive way and leading to increased tax receipts…

The other option, which the coalition has chosen to embrace, is to raise the taxes up so high that bankers will simply move abroad. Good riddance you say? No. No it’s not. If the top 1% is paying 23% of our tax revenues, how is it in our interests to drive this money away? Does that not leave us with 23% of the money short? Think about it…

Or let us let Camberwell’s most famous son put it: ‘I left for eight years when tax was put up to 82 per cent. The newspapers said: “Michael Caine’s leaving: let him go, the stupid, overpaid, loudmouth idiot, who cares where he goes?” Well, you didn’t get 82 per cent tax from me for eight years and a quarter of a billion dollars worth of movies were made outside this country instead of inside it. Now, that is just from one stupid, loudmouth moronic actor. Imagine what happens with companies that disappear.’

The last of the ‘honest’ MP? Or just plain cocky?

‘Every party says what they need to get power. This is politics,’ declared Liberal Democrat councillor Duwayne Brooks in an interview last Friday, with a bunch of us student journalists at City University London.

London mayoral nominee Brooks, 32, defended – among other issues – the coalition government’s new plan to hike tuition fees up to £9,000, despite the Liberal Democrats pre-election pledge to scrap tuition fees.

‘You say what the voters want to hear, what you think will make them happy. This is politics, and it’s what everyone’s been doing for a long time. In terms of what was said during the elections – everyone mislead everyone. Power is power, everyone wanted it.’

As it stands, tuition fees are £3290, however with the three-fold increase, students face owing £27,000 for fees alone. ‘Many students will never earn enough to pay back their loans, the average pay for a graduate in London is £21,000. It’s very unlikely a graduate will earn over £25,000, and even then it’s £7 a week. That’s less than life insurance.’

The unapologetic Brooks highlighted that prior to the two coalition parties being elected neither the Liberal Democrats nor Conservatives had any idea as to the extent of the Nations’ financial problems.

He said: “At election time you’re always going to get someone saying ‘A’ to you, but when they get into power they realise that there’s no money left. That’s just how it is. At the end of the day, its all about money”

During the interview, Brooks candidly touched on several hot topics concerning ethnic minorities, drugs and welfare reforms.

On the government’s recent proposals for welfare reform, Brooks stated: ‘the problem with Britons is that they’re too damn lazy! There are families where no one has ever worked, why should they? They get money anyway. It’s too easy in this country – if everything is this easy, then why would you ever work for it?’

I don’t see how someone who hasn’t had the same things I have had growing up can come and take my job, then there’s something wrong with me.’

Brooks first came into the public eye in 1993 as one of the friends of murdered black teenager Stephen Lawrence. Since then he has been heavily involved with the repealing of the Stop and Search initiative as well as the LibDem’s Safer Communities Programme.

Brooks was speaking about this last Friday, and therefore has no idea of the riots at the Student Demos at Millbank Towers earlier today – it seems that even if the government thinks many students won’t pay back their debts, the students don’t see it that way and are prepared to take action, violent or otherwise…