Brown's Big Con

So he got his soundbite then "2p off income tax" - hurrah.

Despite my questioning yesterday about my political party loyalties I am still a conservative, I still believe in a low tax economy, I still believe in individual responsibilities and freedoms, and those freedoms include keeping as much of the money that you earn as possible. So I'm happy about the 2p income tax cut then? Well, no not really.

The abolition of the 10p rate cut has totally negated the benefits this will bring to the lowest paid people - who need the tax cuts most. There should never have been a 10p rate in the first place - it was a con to make people think there had been a tax cut. Any removal of this rate and the simplification of the tax system is a good thing. But this should have been matched by a raising of the lower threshold. Instead we now have a situation where those earning less than £17,000 per year will be worse off. This can never be right.

I know the apologists for Brown's leadership manifesto... sorry budget will point to the fact that tax credits will make up the shortfall. Big bloody deal. Tax credits don't help - tax cuts do. Tax credits introduce complicated forms and means testing into the system. People shouldn't have to go through multi page forms to be able to keep the money they have worked hard to earn, and if I can be a bit stereotypical but honest a sizable number of people who are earning less than £17,000 a year will not be confident with form filling and would rather not fill out these intrusive questionnaires. So the very people who most need the money will be the people who are least able to navigate the systems to ensure they get it. Good trick that.

Anyway many people don't trust the systems to work - there have been so many tax credit blunders - see here, here and here. So instead of forcing people to rely on a complicated system that doesn't work terribly well, why not make the simplification of just cutting taxes and allowing people to develop the economy through their spending choices.

To steal a statement from Dick Cheney (the first and possibly last time I will ever do this) - no nation ever taxed its way to prosperity.