A semantic complaint today. I'm getting irate, for reasons of pedantry, about the misuse of the term Black Hole by politicians. Mostly, it seems, Lib Dems. Nick Clegg was on the Today program this morning talking again about addressing the black hole in the public finances. Chris Huhne was talking yesterday about a black hole in the nuclear power budget.
Of course, we all know what they mean. They mean "hole". There is a great big hole in the public finances.
But a black hole has a very different meaning. Firstly - you have no idea what's going on inside. No information ever gets out. It might be true, of course, but that, surely, isn't the message that you want to send when you're trumpeting the glories of transparent government, and fiscal rectitude. You really don't want to be telling to public that you have no idea, can have no idea, and will never have an idea, of what's going on with Britain's public debt. Not a good message at all.
Also, of course, if you throw something into a black hole, the stuff disappears and the black hole gets bigger. Again, if you're talking about addressing the public debt, perhaps by raising VAT or CGT, then it really isn't the brightest message to send. Give me your money so I can throw it into the black hole, so it's lost forever and the black hole gets bigger.
It is, really, a very, very stupid metaphor, pushed by people who seem to want to make things seem even worse than they are. You can almost hear the cogs whirring "Hole in the public finances doesn't sound dramatic enough - what could be more dramatic? Hmm. Black hole. Yes. That's what." I won't, yet, extrapolate this as an indicator of their understanding of science, but, you know that I'm waiting.
Meanwhile, on the over-egging the pudding side of things, Nick Clegg was also talking about what a tragedy it is for David Laws. Hmm. A man takes a liberal view of the rules to protect his privacy, comes a bit unstuck, keeps his job as MP, and will probably be back in government in 12 months, when until 2 months ago he presumably thought he hadn't a hope in decades of being in government. This is not a tragedy. It's slightly unfortunate. A tragedy is a couple of hundred people killed in Guatemala in a typhoon; a tragedy might be a number of people killed by illegal, arguably war-like, action from the Israelis; bus crashes, or earthquakes, or volcanoes, or suicide bombs. These bring about tragedies. A bloke being MP and still being MP after a question over parliamentary expenses is not a bloody tragedy. Get a grip.
Wednesday, 2 June 2010
Tuesday, 1 June 2010
Israel's attack on the Gaza aid convoy
I'm sure I'm just reiterating what's been said in a million places on the internet by now, but I guess I ought to add my tuppence.
Frankly, it's all a bit shocking. We know, by now, that Israel takes a lax attitude to international law when it's dealing directly with the Palestinians, and there have been arguments about that for years, and some tenuous but just about sustainable defence by the Israelis. It's not a defence that holds much water with most people, but there is a defence, and a justification.
Here, though, they have attacked a peaceful aid convoy, under Turkish flag, in international waters. They didn't even bother to wait until it was in Palestinian/Israeli waters. It's a world of illegal, let alone immoral.
And, astonishingly, they have the balls to claim that they were on the wrong side of a belligerent attack by the people on the boats because - get this - the Israeli troops who abseiled down from their heavily armed military helicopters, had some guns wrested from them. So, these unarmed civilians, try to defend themselves and manage to take a handgun from an incompetent Israeli soldier, and now the civilians are the "armed belligerents". It's utterly laughable. And embarassing.
Of course, many things about Israel's behaviour in the last couple of decades falls into the laughable and embarassing category, but this feels like it's another step beyond. Frankly, if a Conservative PM of the UK is condemning Israel, and if leader columns in the FT are, it's a pretty shocking state of affairs that Israel has managed to create.
How anyone tries to defend this is beyond me, and it's to the US's great shame that it seems to be blocking even statements of condemnation from the UN. The US should finally be bringing the hammer down on the foul behaviour by the Israeli government, but instead appears to be standing meekly by.
Worth mentioning, too, quite the stupidity of the Israelis here in attacking Turkish vessels. Turkey has been the one country that Israel has managed to build a decent alliance with in the muslim world. Not any more. Bafflingly stupid from Israel. Hard to know what else to say, really.
Frankly, it's all a bit shocking. We know, by now, that Israel takes a lax attitude to international law when it's dealing directly with the Palestinians, and there have been arguments about that for years, and some tenuous but just about sustainable defence by the Israelis. It's not a defence that holds much water with most people, but there is a defence, and a justification.
Here, though, they have attacked a peaceful aid convoy, under Turkish flag, in international waters. They didn't even bother to wait until it was in Palestinian/Israeli waters. It's a world of illegal, let alone immoral.
And, astonishingly, they have the balls to claim that they were on the wrong side of a belligerent attack by the people on the boats because - get this - the Israeli troops who abseiled down from their heavily armed military helicopters, had some guns wrested from them. So, these unarmed civilians, try to defend themselves and manage to take a handgun from an incompetent Israeli soldier, and now the civilians are the "armed belligerents". It's utterly laughable. And embarassing.
Of course, many things about Israel's behaviour in the last couple of decades falls into the laughable and embarassing category, but this feels like it's another step beyond. Frankly, if a Conservative PM of the UK is condemning Israel, and if leader columns in the FT are, it's a pretty shocking state of affairs that Israel has managed to create.
How anyone tries to defend this is beyond me, and it's to the US's great shame that it seems to be blocking even statements of condemnation from the UN. The US should finally be bringing the hammer down on the foul behaviour by the Israeli government, but instead appears to be standing meekly by.
Worth mentioning, too, quite the stupidity of the Israelis here in attacking Turkish vessels. Turkey has been the one country that Israel has managed to build a decent alliance with in the muslim world. Not any more. Bafflingly stupid from Israel. Hard to know what else to say, really.
Civil Servants Pay
Today, a big announcement, the renumeration packages of all people working in the public sector who earn more than the PM's salary.
The government are presenting this as a case of honesty and transparency. There's certainly an aspect of that, but it's also very clear that they're trying to set into the public mind the idea that those in the public sector are overpaid.
You can see this is going on because, to start with, there's the cynical line about "more than the PM's salary". Yes, the PM's salary is £142,000. But the PM also earns another £60,000 as his MP's salary, putting his overall income abover £200,000. And all of the figures published today are "overall income". So, if you want to present a fair comparison of "Hey, look, all these people earn more than the PM", you'd discover that, in fact, it's about 20 people, not the 170 that the government are pushing.
Apart from this cynicism from the government, what is the point of publishing this list? Well, almost nothing, I think. Full transparency across the full spectrum would be nice, of course. I don't think anyone should be coy, or should need to be coy, about what they earn, and if someone else actually cares the information should be public. But that's not just in the public sector; and that's not just high earners. It's a bit weird that it's just high earners.
The other thing it tells us, oddly, is that the public sector really isn't that obscenely overpaid, at least at the very top levels. The people running multi-billion pound organisations in the public sector, and running the country, earn a hell of a lot less than the equivalent jobs in the private sector, and will never have the opportunities for share options and bonuses that those brilliant men who run Northern Rock or BP or BA will.
I imagine the relative job security of the civil service, along with perhaps a sense of public duty, will be the only things that keeps the high-quality people in these kinds of jobs. The sense of public duty will weaken every time a real attack, or a coded attack like this, comes in on the people who run the public sector, and I suspect the Tories are working to lower the job security, too. That can't be a good thing.
It's simple and trite and easy populism to attack high earners in the public sector, but, frankly, I suspect it's very counterproductive in the long term no matter how much it appeals to the public at large in the short term. It's almost Blairite in its populist stupidity.
The government are presenting this as a case of honesty and transparency. There's certainly an aspect of that, but it's also very clear that they're trying to set into the public mind the idea that those in the public sector are overpaid.
You can see this is going on because, to start with, there's the cynical line about "more than the PM's salary". Yes, the PM's salary is £142,000. But the PM also earns another £60,000 as his MP's salary, putting his overall income abover £200,000. And all of the figures published today are "overall income". So, if you want to present a fair comparison of "Hey, look, all these people earn more than the PM", you'd discover that, in fact, it's about 20 people, not the 170 that the government are pushing.
Apart from this cynicism from the government, what is the point of publishing this list? Well, almost nothing, I think. Full transparency across the full spectrum would be nice, of course. I don't think anyone should be coy, or should need to be coy, about what they earn, and if someone else actually cares the information should be public. But that's not just in the public sector; and that's not just high earners. It's a bit weird that it's just high earners.
The other thing it tells us, oddly, is that the public sector really isn't that obscenely overpaid, at least at the very top levels. The people running multi-billion pound organisations in the public sector, and running the country, earn a hell of a lot less than the equivalent jobs in the private sector, and will never have the opportunities for share options and bonuses that those brilliant men who run Northern Rock or BP or BA will.
I imagine the relative job security of the civil service, along with perhaps a sense of public duty, will be the only things that keeps the high-quality people in these kinds of jobs. The sense of public duty will weaken every time a real attack, or a coded attack like this, comes in on the people who run the public sector, and I suspect the Tories are working to lower the job security, too. That can't be a good thing.
It's simple and trite and easy populism to attack high earners in the public sector, but, frankly, I suspect it's very counterproductive in the long term no matter how much it appeals to the public at large in the short term. It's almost Blairite in its populist stupidity.
England's World Cup Chances
So here we go. England's 23 for the world cup will be announced today. As usual there will be inordinate hype about our chances, inordinate excitement, dreadfull puff pieces about the usual suspects.
I don't often watch the friendlies, because there's almost nothing as deathly dull as an England friendly with ITV commentators desperately trying to find something to talk about, trying to make it seem like it's important, and trying to push the idea of how wonderful the team are, but I caught quite large sections of the Japan match, and bits of the Mexico game, too. Fortunately with the sound off.
And the only conclusion I can have is that if England are to get to the semi finals or final, then there are one of three things going on
- England will have improved dramatically in a few weeks
- The opposition are very bad indeed
- There's a lot of luck involved.
Of course, this is entirely to be expected. The press won't remind you of this, but right now England are ranked 8th in the world. That means, as any fule kno, we should, just, scrape into the quarter finals, although it would be no disgrace to get knocked out in the second round. This is not the ranking of a team expecting to win the tournament. Of course, there's a chance, given that this is football, but it is basically very unlikely we'll make the last four.
And from watching bits of the friendlies, this is no surprise at all. Primarily because the defence is rubbish. It's used to the hype - Rio and Terry have been told so often that they are oak hearted world class titans that they don't bother to try to improve any more. Which means that, being rather slow and ponderous of both foot and head, they are often turned, often caught out of position, and, in Rio's case, often caught with his brain off in another planet as an opposing attacker strolls past him. How he's managed to become England captain with his mix of failing to show for drugs tests, vacantness on the pitch, and general lack of maturity, would be baffling if the rest of the team wasn't full of the likes of Wayne Rooney and Ashley Cole.
It's a bunch of players that can surely garner no love at all, it makes it hard to support a team full of deeply unlikeable people. In the end, of course, I'll be wailing and gnashing my teeth as we get knocked out. But right now, I feel little warmth for them. I just hope Fabio keeps them on a very tight leash; and - more - tries to keep expectations in the press reasonable.
Unfortunately, it's a self-sustaining beast. The media thrive on having access to "the world's best players" so they need to push the idea that Fat Frank and Barroom brawling Stevie G or drugs cheating Rio or womanising and daft John T or just plain greedy Ashley or fumbling and useless but actually not a bad bloke David James are, actually, on a par with the likes of Messi or Ronaldo or Xavi.
I don't often watch the friendlies, because there's almost nothing as deathly dull as an England friendly with ITV commentators desperately trying to find something to talk about, trying to make it seem like it's important, and trying to push the idea of how wonderful the team are, but I caught quite large sections of the Japan match, and bits of the Mexico game, too. Fortunately with the sound off.
And the only conclusion I can have is that if England are to get to the semi finals or final, then there are one of three things going on
- England will have improved dramatically in a few weeks
- The opposition are very bad indeed
- There's a lot of luck involved.
Of course, this is entirely to be expected. The press won't remind you of this, but right now England are ranked 8th in the world. That means, as any fule kno, we should, just, scrape into the quarter finals, although it would be no disgrace to get knocked out in the second round. This is not the ranking of a team expecting to win the tournament. Of course, there's a chance, given that this is football, but it is basically very unlikely we'll make the last four.
And from watching bits of the friendlies, this is no surprise at all. Primarily because the defence is rubbish. It's used to the hype - Rio and Terry have been told so often that they are oak hearted world class titans that they don't bother to try to improve any more. Which means that, being rather slow and ponderous of both foot and head, they are often turned, often caught out of position, and, in Rio's case, often caught with his brain off in another planet as an opposing attacker strolls past him. How he's managed to become England captain with his mix of failing to show for drugs tests, vacantness on the pitch, and general lack of maturity, would be baffling if the rest of the team wasn't full of the likes of Wayne Rooney and Ashley Cole.
It's a bunch of players that can surely garner no love at all, it makes it hard to support a team full of deeply unlikeable people. In the end, of course, I'll be wailing and gnashing my teeth as we get knocked out. But right now, I feel little warmth for them. I just hope Fabio keeps them on a very tight leash; and - more - tries to keep expectations in the press reasonable.
Unfortunately, it's a self-sustaining beast. The media thrive on having access to "the world's best players" so they need to push the idea that Fat Frank and Barroom brawling Stevie G or drugs cheating Rio or womanising and daft John T or just plain greedy Ashley or fumbling and useless but actually not a bad bloke David James are, actually, on a par with the likes of Messi or Ronaldo or Xavi.
Monday, 31 May 2010
The Danny Alexander story
Following on from David Laws, the Telegraph today pushed a "big expenses scandal" story about Danny Alexander, the new Lib Dem Chief Sec to the Treasury.
Except this is an astonishing non story. Alexander didn't pay CGT on a house he shouldn't have paid CGT on, he changed the definition of his primary residence not so that he could flip - like various high profile Tories have done - but so that he could sell his other residence. Nothing crooked, malign, or dodgy here. Nothing against the parliamentary rules, or even vaguely related to them.
But clearly the Telegraph are back on the warpath.
Now, it might just be coincidence, but it seems to me that it's unlikely that the two exposes they've pushed are about Lib Dems in the treasury - when the far more corrupt Osborne and Gove remain with the easiest of rides from the right-wing press - just happen to be the two biggest scoops in the Telegraph's locker.
It seems even less of a coincidence when you realise the Telegraph are heading the right-wing Tory campaign on the CGT issue, on trying to keep it below the levels of income tax: although they never quite explain why. But apparently it's a "bad thing". Yes, for all those buy-to-let landlords who're making obscene capital gains on properties whose value rockets because there are more buy to let landlords paying no tax. It's probably bad for all those wealthy Telegraph editors and journalists and owners who've been using low CGT to get around paying tax on income for ages.
Anyway, off from my sniping about it - the Telegraph are running a campaign against it; Lib Dems in the treasury are going to be much more deficit-hawkish than the Tories in terms of raising tax as well as cutting services to bring finances in order. So, I suspect the Telegraph is trying to bring them down. But it's powder is very, very feeble on this one. Expect them to try and find other ways to go after Alexander now.
Meanwhile, I feel there's a certain irony that they now have a much more liberal and less conservative Lib Dem in the higher ranking job, having disposed of Laws. My guess is that they were hoping Cameron would bring a Tory in. It's very funny that he hasn't, and the Telegraph and right-wing Tories might have ended in a worse position than before.
Except this is an astonishing non story. Alexander didn't pay CGT on a house he shouldn't have paid CGT on, he changed the definition of his primary residence not so that he could flip - like various high profile Tories have done - but so that he could sell his other residence. Nothing crooked, malign, or dodgy here. Nothing against the parliamentary rules, or even vaguely related to them.
But clearly the Telegraph are back on the warpath.
Now, it might just be coincidence, but it seems to me that it's unlikely that the two exposes they've pushed are about Lib Dems in the treasury - when the far more corrupt Osborne and Gove remain with the easiest of rides from the right-wing press - just happen to be the two biggest scoops in the Telegraph's locker.
It seems even less of a coincidence when you realise the Telegraph are heading the right-wing Tory campaign on the CGT issue, on trying to keep it below the levels of income tax: although they never quite explain why. But apparently it's a "bad thing". Yes, for all those buy-to-let landlords who're making obscene capital gains on properties whose value rockets because there are more buy to let landlords paying no tax. It's probably bad for all those wealthy Telegraph editors and journalists and owners who've been using low CGT to get around paying tax on income for ages.
Anyway, off from my sniping about it - the Telegraph are running a campaign against it; Lib Dems in the treasury are going to be much more deficit-hawkish than the Tories in terms of raising tax as well as cutting services to bring finances in order. So, I suspect the Telegraph is trying to bring them down. But it's powder is very, very feeble on this one. Expect them to try and find other ways to go after Alexander now.
Meanwhile, I feel there's a certain irony that they now have a much more liberal and less conservative Lib Dem in the higher ranking job, having disposed of Laws. My guess is that they were hoping Cameron would bring a Tory in. It's very funny that he hasn't, and the Telegraph and right-wing Tories might have ended in a worse position than before.
Saturday, 29 May 2010
Laws
A couple of thoughts on this morning's David Laws revelation. He's been claiming, completely against the rules, about £40,000 of second home allowance when he was renting a room from his partner.
Now, he says he claimed because he didn't want to come out as gay. Directly, this seems fair enough. But you do wonder how someone who made millions in the city needs to claim £40,000 in the first place. Particularly if he wants to maintain discretion. Clearly he's not being cynical about his claiming - there's no flipping, no dodginess of the level of Gove or Osbourne if we want to pick other members of the coalition: if Laws steps down, surely those two have to, too - he's been claiming less than an equivalent one bed flat would cost to rent; and if he was really dodgy he'd have had his constituency mansion as his "secondary" residence.
That said, he's clearly on very, very shaky ground, and it's pretty hard to defend. If he was genuinely poor and needed the money, that would be another thing; but he's not. Why break the rules to take money you don't need?
The other thought is that this revelation comes from the Telegraph, who must have had the info for months. Why now? I suspect it's a deliberate attempt to undermine the Lib Dem parts of the coalition because of the CGT thing. The Telegraph are spitting nails now they know they will be taxed on the huge massive unearned profits on their multiple homes. And they know that the Lib Dem in the treasury is the one most likely to make headway on the issue, particularly as his stock has risen dramatically in Tory circles with the way he's handled budget cuts.
So, I'm torn. I think Laws probably should go, but then so should Osbourne and Gove. But I'll be happy if he doesn't for tactical reasons. I suspect Cameron will keep him, anyway - it's too useful to have a Lib Dem take the flak for the cuts; and there's the just-out gay thing, which Cameron may also decide to defend because he wants to be seen a liberal, and not as an old school nasty Tory.
Now, he says he claimed because he didn't want to come out as gay. Directly, this seems fair enough. But you do wonder how someone who made millions in the city needs to claim £40,000 in the first place. Particularly if he wants to maintain discretion. Clearly he's not being cynical about his claiming - there's no flipping, no dodginess of the level of Gove or Osbourne if we want to pick other members of the coalition: if Laws steps down, surely those two have to, too - he's been claiming less than an equivalent one bed flat would cost to rent; and if he was really dodgy he'd have had his constituency mansion as his "secondary" residence.
That said, he's clearly on very, very shaky ground, and it's pretty hard to defend. If he was genuinely poor and needed the money, that would be another thing; but he's not. Why break the rules to take money you don't need?
The other thought is that this revelation comes from the Telegraph, who must have had the info for months. Why now? I suspect it's a deliberate attempt to undermine the Lib Dem parts of the coalition because of the CGT thing. The Telegraph are spitting nails now they know they will be taxed on the huge massive unearned profits on their multiple homes. And they know that the Lib Dem in the treasury is the one most likely to make headway on the issue, particularly as his stock has risen dramatically in Tory circles with the way he's handled budget cuts.
So, I'm torn. I think Laws probably should go, but then so should Osbourne and Gove. But I'll be happy if he doesn't for tactical reasons. I suspect Cameron will keep him, anyway - it's too useful to have a Lib Dem take the flak for the cuts; and there's the just-out gay thing, which Cameron may also decide to defend because he wants to be seen a liberal, and not as an old school nasty Tory.
Friday, 28 May 2010
QT and CGT
Acronym day today. First, QT - there's a huge row about the fact that the coalition government refused to put a cabinet member on to the show if Alistair Campbell was appearing.
To me, this looks like the Cameroons trying to invent an argument with the BBC. The Lib Dems, perhaps Laws excepted, might be expected to push back a bit, but the Tory party still seems to want to take down the BBC, and probably privatise it. They, of course, being in the pocket of Murdoch.
So here, they think, is a good opportunity. Labour haven't put a front-bencher forward so the Tories in government throw a pretended fit.
It's assinine, of course. Labour don't have a leader at the moment, so any shadow cabinet position is broadly meaningless; better, instead, to have a Labour heavyweight. And Campbell is about as tightly associated with the Brown and Blair years as anyone except Mandelson. Why on earth would you pretend that this is a serious matter if you're Cameron High Command?
Only if you deliberately want to pick a fight. And it ends up with the government just looking a bit stupid, really. It looks like they're telling the BBC who they can and can't have on their programs. It is, effectively, direct government interference in broadcasting (there's an Alistair Campbell related irony here, too, of course). It is also spectacularly petty - particularly in the weeks when the government is popular, and has just had a queen's speech out which has broadly popular support. Now is the time to bask. The time to hide from the media is months or years away yet, but it will surely come.
The other acronym of the day is CGT. There's a huge amount of froth, from the right wing press - particularly the Telegraph - and from the right of the Tory party, about how evil the proposed changes to CGT are. Apparently, this is going to hit the middle classes. That is right. All those median income earners who have huge share portfolios and who have lots of extra properties.
Which means, of course, only the "middle class" in the definitions of people who are very, very rich. Nothing like the genuine middle classes.
Don't listen to their wailing.
In addition, apparently having CGT at the same levels of income tax will discourage people from being entrepreneurial. Does this mean that income tax discourages people from working? I'm sure, to a small degree, it does. And you know what? Tough. The state needs to raise cash to pay for stuff, and to pay down debt. Some of it comes from income tax. There's absolutely no reason that income you get on a second home appreciating in value through you doing nothing should be taxed at a lower rate to income you get from busting your nuts off working hard.
If anything, it should be taxed higher because the person making the money has done so little to earn it.
Obviously, the government should not be making value judgements on how people earn. So, instead, it should make the value judgement on how much people earn. And whether your income is from renting out your property portfolio, selling your property portfolio, selling shares, income from dividends, or actually, normal, salaries, it should basically be at the same rate. There's no good reason for it not to be.
If the government does want to offer a taper relief, it should exist at the value of inflation only - your house can appreciate by CPI or RPI, and you won't get taxed on those earnings, as they aren't real earnings, they just maintain value. But any other capital increase in the value should be taxed.
Incidentally, share dividends are a slightly different matter in how they should be taxed, because the earned income of the company is already taxed as corporation tax; and therefore that amount should be discounted before "income" (in the broad sense, including CGT) tax is applied.
I hope Cameron doesn't buckle to the laffer curve bollocks of John Redwood and goes with his and David Laws's instincts to raise CGT. It makes things not only fairer - removing a tax loophole for the rich that the poor are wealthy enough to use - but it raises cash to help fill the deficit hole we're in.
Thinking of the deficit hole; I just had a look at last year's treasury report. One thing that the Labour government must be massively commended on is increasing the length of repayment of government yields. The average maturity time has increased consistently during the full length of the last decade or more, and that insulates and protects the country far better against short term debt/deficit issues and against interest rate variations. It's not the kind of thing often talked about but it means we're in a far stronger position than almost any other country with a similar debt and deficit profile.
To me, this looks like the Cameroons trying to invent an argument with the BBC. The Lib Dems, perhaps Laws excepted, might be expected to push back a bit, but the Tory party still seems to want to take down the BBC, and probably privatise it. They, of course, being in the pocket of Murdoch.
So here, they think, is a good opportunity. Labour haven't put a front-bencher forward so the Tories in government throw a pretended fit.
It's assinine, of course. Labour don't have a leader at the moment, so any shadow cabinet position is broadly meaningless; better, instead, to have a Labour heavyweight. And Campbell is about as tightly associated with the Brown and Blair years as anyone except Mandelson. Why on earth would you pretend that this is a serious matter if you're Cameron High Command?
Only if you deliberately want to pick a fight. And it ends up with the government just looking a bit stupid, really. It looks like they're telling the BBC who they can and can't have on their programs. It is, effectively, direct government interference in broadcasting (there's an Alistair Campbell related irony here, too, of course). It is also spectacularly petty - particularly in the weeks when the government is popular, and has just had a queen's speech out which has broadly popular support. Now is the time to bask. The time to hide from the media is months or years away yet, but it will surely come.
The other acronym of the day is CGT. There's a huge amount of froth, from the right wing press - particularly the Telegraph - and from the right of the Tory party, about how evil the proposed changes to CGT are. Apparently, this is going to hit the middle classes. That is right. All those median income earners who have huge share portfolios and who have lots of extra properties.
Which means, of course, only the "middle class" in the definitions of people who are very, very rich. Nothing like the genuine middle classes.
Don't listen to their wailing.
In addition, apparently having CGT at the same levels of income tax will discourage people from being entrepreneurial. Does this mean that income tax discourages people from working? I'm sure, to a small degree, it does. And you know what? Tough. The state needs to raise cash to pay for stuff, and to pay down debt. Some of it comes from income tax. There's absolutely no reason that income you get on a second home appreciating in value through you doing nothing should be taxed at a lower rate to income you get from busting your nuts off working hard.
If anything, it should be taxed higher because the person making the money has done so little to earn it.
Obviously, the government should not be making value judgements on how people earn. So, instead, it should make the value judgement on how much people earn. And whether your income is from renting out your property portfolio, selling your property portfolio, selling shares, income from dividends, or actually, normal, salaries, it should basically be at the same rate. There's no good reason for it not to be.
If the government does want to offer a taper relief, it should exist at the value of inflation only - your house can appreciate by CPI or RPI, and you won't get taxed on those earnings, as they aren't real earnings, they just maintain value. But any other capital increase in the value should be taxed.
Incidentally, share dividends are a slightly different matter in how they should be taxed, because the earned income of the company is already taxed as corporation tax; and therefore that amount should be discounted before "income" (in the broad sense, including CGT) tax is applied.
I hope Cameron doesn't buckle to the laffer curve bollocks of John Redwood and goes with his and David Laws's instincts to raise CGT. It makes things not only fairer - removing a tax loophole for the rich that the poor are wealthy enough to use - but it raises cash to help fill the deficit hole we're in.
Thinking of the deficit hole; I just had a look at last year's treasury report. One thing that the Labour government must be massively commended on is increasing the length of repayment of government yields. The average maturity time has increased consistently during the full length of the last decade or more, and that insulates and protects the country far better against short term debt/deficit issues and against interest rate variations. It's not the kind of thing often talked about but it means we're in a far stronger position than almost any other country with a similar debt and deficit profile.
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