When the government needs mind boggling amounts of money as it will do for quite some time it has the choice of cutting public spending or raising taxes. Just as a family in debt has to choose between spending less money or (if possible ) earning more by doing overtime etc.
There are several problems with raising taxation levels imo.The people of this country have been subject to many many rises in taxation since 1997, many househoulds surely are just about keeping their heads above water as it is and yet more taxation could be the straw that breaks the camels back. It is generally accepted that overall taxation is around 50% of a persons income (assuming they pay basic rate tax) there must be a point where there is little incentive to bother going out to work.
It is easy for people who arent rich to simply demand that the rich pay even more tax than they already do. They still wont worry about paying the electric bill or buying food like the rest of us. The problem with that is that these people tend to be the wealth creators, the engines which drive a countries economy.They also are more likely to move themselves or their money to somewhere where they will pay less tax. Labour introduced a 98% tax band for the rich in the 70,s and soon afterwards many wealthy people cleared off and lived elsewhere so the exchequer recieved three fifths of break all from their incomes. Anyone remember the Stones moving to France, Rod Stewart moving to L.A.etc?
During the New Labour era government employee numbers have risen by around 600,000. Thats 600,000 more salaries, pensions and employment admin costs that the taxpayer has had to fund. there is also the fact that public sector salaries have mostly risen way above inflation levels and in many cases are higher than private sector levels.
We now have a situation where somewhere between 20-25% of those in work are employed by the government, plus the large number of people who live on benefits also have to be funded from taxation.
This government has for many years spent money as no other government in history has, literally like it was going out of fashion. It has taken no notice of critics who said they should be putting money aside for a rainy day ( I have abolished boom and bust )and when the rainy day arrived the piggy bank was empty.
The only reason they got away with wasting mind numbing sums of money for as long as they did was due to the fact that the evil banks in the city were enjoying the biggest boom they had ever had, and the money they were putting into the treasuries coffers was keeping the country running.
When the U.S credit crunch almost brought about a total collapse of the worlds banking industry the British economy was left exposed like no other major economy due to the ludicrous mismanagement of it in the preceeding ten years. Which was why we were among the first to go into recession and the last to come out of it.
Lastly is there anyone in this country who believes that much of the money taken from us in taxes and spent by the government isnt wasted ?
Why do we need over 600,000 more government employees than we did before 1997 ?
There is waste on a huge scale everywhere you look in the public sector. Its not about running a country effectively its about big government (the natural mindset of socialists) its about social engineering, political agendas etc.
Put simply a low taxation private sector is capable of producing wealth. The public sector produces no wealth whatsoever for the country, it is a drain on the countries wealth, and now that the boom has turned to bust the country simply cant afford a huge bloated public sector.
P.S The taxpayers stake in Lloyds bank turned a profit for the first time this week.
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Topic: Why (Read 1455 times)