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Tuesday, 29 May, 2001, 10:57 GMT 11:57 UK
The tax question - to cut or not to cut?
What you pay in your tax bills has already become the central battleground in this election with the parties standing on very different platforms on this contentious area.
The Conservatives promised an £8bn cut in taxes in their manifesto, but are now facing questions after a report in Monday's Financial Times (FT) said that the total could reach £20bn by the end of the next parliament. William Hague insisted the figure was still £8bn. Labour's Chancellor Gordon Brown said this showed the Conservatives were "incoherent and irresponsible" on tax and the Liberal Democrats said it showed their policy was a "shambles". Labour is expected to promise no income tax rises in its manifesto, and the Liberal Democrats want a one penny rise in the basic rate to pay for education. "Read my lips" became a tax campaign slogan in George Bush senior's election campaign in America. Who do you believe in this latest twist on tax in this election battle?
Neil Rogall, London, UK
People whinge endlessly about the tax burden in this country because in the 1980s we were encouraged to think that tax cuts were a win-win situation. This attitude has created a general disposition to feel like victims of an oppressive taxation system, rather than being self-serving individuals. We will get what we pay for and I would hope that it is self evident that we are not paying enough.
Why on earth should we pay more in taxes? We have paid through the nose under successive governments for less and less. All public services are declining and the idea of giving some elected politician more of our money to throw down the drain fills me with dread. When will the people of this country recognise that politicians and Governments create more problems than they solve and dont spend taxpayers money wisely? (Remember the Dome?). I for one don't want to pay a penny more. I'd much prefer to decide who gets my tax receipts then those in Westminster and the other new assemblies that have grown up like weeds in the garden. Let's stop the bloodsuckers before its too late!
Why should it be so hard to cut £8bn from our tax bills? If Labour can rake in a tax surplus of billions each year then why not?
Mark, Hull, UK
A proposed annual tax cut of £8 billion or £20 billion has to be shared out amongst 60 million people.
This works out at 36p or 91p per person per day. Can this be what all the fuss is about?
Is it possible to get a straight answer from a politician? Question: How many pennies on income tax would have to increase to ensure that all the public services could run efficiently. The police service, Health Service, Education etc etc, are demanding or requesting more money, equipment and staff. I don't wish to read a long answer, just say 2p, or 5p, or 13p, or 20p in the pound please. Perhaps they don't know?
I am left with just over £200 cash a month. Guess what? I am moving abroad.
IR35 (which has clobbered my business) should worry more than IT contractors. There is nothing stopping Mr Brown applying this pernicious and contradictory legislation to other groups in similar circumstances such as lawyers who operate their own practice. Hospital doctors on fixed term contracts as are a lot of media journalists.
I could rant on for a long time about how unfair this tax is but now its in place, there is nothing to stop other groups being targeted, classic British divide and conquer tactics.
Keith, Cheltenham, UK
When taxation under the current Government is mentioned, people, especially those on the right of politics, forget to mention Interest rates on mortgages. The previous Tory government used interest rates as a "tax" on people in order to take the heat out of an economy ruined by them in the first place. I am currently £700 (£8400 per annum) a month better off under the current government than I was under the previous one, if mortgage payments are taken into account. Beat that Hague/Portillo?
Phil, London
The Tories promise to reduce taxes and keep to the same level of public spending on health and education. So why is it that during their 18 years of government they never managed it? All I can remember is a small reduction in tax whenever an election was due, followed by a much greater reduction in spending when they were voted back. What's so different about them this time?
If you want to pay less tax on petrol, booze or fags, what do you want to pay more tax on?
The British tax take is lower than that in most other European countries. Our public services are generally worse. Could there be some link here?
Stephen, Cambridge, UK
Everyone is deserving of relief from the oppressive taxation they are forced to endure at the hands of big spending governments. The Left in both Britain and America have made it quite clear that they hate the notion of allowing the citizenry to keep more of what they earn. My question is why?
Tax cuts do not harm anyone. They only improve life for all involved. The citizen gets to keep more of what is rightfully his, businesses receive more revenue, thus providing government with a greater flow of tax money to provide for more programs. Tax cuts are a winning situation for Britain and America.
For me the big issue is fuel taxation reduction. I am disabled and I rely on my car extensively for transportation, so I use a lot of petrol. Ten pounds is lucky to last me a day. I am on a low wage and I can't afford the repeated increase in fuel tax. When will it stop? I want a government that will stop trying to take my "legs" from under me by lowering tax on fuel to a fair amount. The motorist is not a fair target.
Instead of the Tories giving tax cuts, why don't they take the £8bn they are going to save and pump it into Education, NHS & Pensions? I don't know anyone that actually wants tax cuts (Tory or Labour), they just want their money spent more prudently.
I may be only 16 but I still have views on politics. Everyone is constantly talking about whether to cut taxes or keep them the same. I think that they should rise for all those who can afford. Someone with a £100,000 income will barely notice a loss of £5,000 or even £10,000 to the taxman while that could buy a hospital bed.
If the idea of lowering taxes is going to win any votes for the Tories we have become a very selfish nation.
Bilal Patel, London, UK
The tax issue is fairly simple. It's all about us the people being allowed to spend our money how we want rather than politicians spend it how they want. I'd trust the people over an over-taxing, over-spending Labour politician any day.
Dictionary definitions:
Left-wing - the most radical section of a political group.
Why do I get the impression that the Labour party do not fall into this category?
I would be quite happy to pay more tax as long as I was certain I would get politicians who told the truth, answer the question and actually do some work. Also, if they kept there promises of better health, education, welfare, transport and law and order. Not likely.
Matthew Salter, UK
It IS possible to cut taxes and make no cuts to public services. Consider this example. If public spending is £400 billion and the Labour government wants to increase spending by 4 per cent a year this is £16 billion a year. If the Conservatives increase spending by 3per cent, that is £12 billion a year. They have therefore still increased spending (i.e. no cuts) and have saved £4 billion a year so no need for as many tax rises (even tax cuts) as Labour. It is therefore possible.
Tories intend to cut £8 billion of taxes. Labours claim it is £20 billion is a smoke screen to hide their vast increase in stealth taxes necessary to fund their criminal extravagance.
How can Labour and The Liberal Democrats claim that the Conservative figures don't add up when they both want to increase spending faster than the country can afford. After all what is £8bn of Tax cuts anyway? It is, as I understand around 1 per cent of GDP, which is nothing at all and easily affordable.
Labour claims that the six pence cut in fuel duty offered by the Conservatives is not affordable without massive cuts to public services. It is quite clearly affordable, but what is not clear is how Labour plans to spend faster than the country can afford.
The Tories failed to cut the burden of taxation over 18 years, so why should anybody believe that they can ever do so? True, they cut direct taxes for some people, but raised VAT, NI, fuel duty, borrowing and God knows what else to more or less compensate with devastating consequences for our public services. Talk about efficiency by all means, but please don't kid anybody that taxes can be significantly reduced in real terms for the majority of people.
Craig Tanswell, Epsom, UK
We in the UK first need to decide exactly which services we want central Government to fund with our money and which things we all need to pay for ourselves. Only then can you have a sensible discussion about tax.
Tax has gone up and public services are still crap. I would rather keep it thanks. But throwing money at problems is not the answer. Is giving each nurse £1000 pay rise going to make the NHS better? Of course it isn't. What services need is better management not more money to waste. I am sick of being taxed to death just because Labour think that if they say they will spend more I will vote for them.
It is disappointing to see that tinkering with tax has become one of the main fields in the battleground of this election. Surely the constitutional changes of a devolving Northern Ireland, Scotland and Wales and the question of whether or not England joins the Euro and continues along the path of federal European integration will have a far greater impact on generations to come than whether or not a couple of pence are placed on or taken off income tax bands.
There's loads of room for tax cuts.
The only reason things have got this stable with the economy now, is because Labour have had to stick to the shrewd spending plans laid out by the last Conservative Government! If Labour get back into power, then within 5 years we will see huge government borrowing to pay for their spending spree, and God help the economy then! Guess what? You will certainly notice the far-from-stealth tax rises at that point!
Being married with no children we are paying more tax under the current government than before. I think it should be the other way around. However selfish it may sound, those married without children should pay less tax. Sorry Mr Blair, you had my vote at the last election but you've well and truly lost it this time. Labour 0 Conservatives 1!
Jack de Metz, UK
Can any party balance the accounts when much needed teachers, police officers and doctors have to be increased? Where will sufficient money come from without a financial deficit? Will issues like banning fox hunting and saving the environment be tackled by any party too, a lot of the younger voters will be interested in the latter issues.
Both Labour and the Tories are fundamentally dishonest about tax. It's amazing that anyone believes them anymore. When will people realise that if we want public services we have to pay tax. I would rather see the bulk of taxes levied from direct rather than indirect taxation. I would especially like to see the higher rate tax dramatically increased, and I speak as a higher rate taxpayer.
I have a direct interest in the NHS as someone who has cancer. In my hospital department we seeing for the first time some real changes. The ward is being renovated. The private rooms used for bone marrow transplants are getting private facilities, years too late. And key specialists are now being hired, three extra consultants in one year.
Our tax money is starting to make a difference.
Given their previous economic failings, this Labour Government has managed to run a sound economy while actually reducing the basic rate of income tax, yet at the same time, investing billions of pounds in public services. People should not be disappointed. More investment is needed in public services, but tax cuts, as proposed by the Tories would be disastrous.
The price of low direct taxation is high indirect taxation. The tax burden is actually 37% which is less than both Germany and France.
Derek Douglas, Dumfries
Labour and the Lib Dems say tax cuts would mean a reduction in public services, health, and education. Why do they never say that it would mean the amount given to scroungers and fraudsters in social security would be cut? Lots of people are fed up with single mums and asylum seekers getting more per week than a pensioner who may have paid into the system for 50 years.
Knock £20-30bn off the £100bn social security fund and spend that on education, health and transport.
"Tax on what we buy and not what we earn" was the phrase Thatcher used in the 80s. So why are so many people who support the Tories moaning about Labour? They've carried on stealth tax increases, cut the basic rate of income tax and continued Tory spending plans. No wonder they call Labour 'genetically modified Tories'!
This government has raised the total tax take to 40% of GDP whilst presiding over a world economic boom with massively increased taxation receipts (also windfall taxes) and no improvement in public services, preferring to hold onto tax payers money so it can bribe them pre-election. It has introduced layers of complexity to the tax system to obfuscate the issue. It spins the claim that taxation has not gone up knowing full well that this is only true for income tax and that total tax has.
Frank W. Meaden, Edinburgh
I am tired of people implying that I don't need to keep the money that I earn because I am married without children. I am 27 years-old, with every intention of having children in the future. My husband and I are trying to set up a decent home and some rainy-day savings before we even think about starting a family. This government clobbers us with taxes at every move, yet showers irresponsible single parents with council homes, benefits and God knows what else - using our money. Does anyone seriously think this is fair?
Might I suggest a way that the Tories can make their figures add up? A crackdown on those corporations and rich individuals that rip us all off by using loopholes in the law to avoid paying tax in this country.
Perhaps they could start with their own treasurer.
Richard, Oxford
For those fortunate enough to be independent of public spending, of course tax cuts are an election issue. However, for the rest of us increases in public expenditure and resultant taxation would be acceptable provided that education and the NHS were the direct beneficiaries.
I would quite happily pay more tax to improve these essential services and, whilst money is not the solution to every problem, I believe that in these cases it could go a long way towards fixing what is wrong - historically appalling levels of staffing (related to poor pay and conditions) and general underfunding.
Gina, Belfast, Northern Ireland My income is so low I don't pay income tax. When I buy something though, I have to pay the same amount in tax as the UK's highest earner.
This is wrong, wrong, wrong. Unfair taxes eventually get their comeuppance (as Mrs Thatcher discovered). Mr Blair should bear that in mind.
Peter, are you seriously suggesting I should pay more for everyday items simply because I have an income and you don't? Should I fill out a means testing form every time I fill up my car? Should you get a discount on chocolate bars simply because you are apparently unable to earn £4500pa? I already pay five figure tax bills - I'm paying my way, and yours by the sounds of it.
The general consensus here and elsewhere seems to be that what is required is a managed taxation system with up-front taxes and honest tax rates. People and businesses are sick to death with the dishonesty and complexity of stealth taxes. Both Labour and the Tories now have a proven record of tax mismanagement and of broken pledges not to raise taxes. Please be honest, give me the full (tax) bill, and don't mug me when I step outside.
Colin, Chesterfield, England
You can always tell when a politician is lying - their lips are moving.
Since 1979 there has been a shift away from direct to indirect form of taxation, you can argue whether this is a good or a bad thing but basically the amount of tax taken from us has remained the same at around 40%.
All parties lie, or at best, tell only part of the truth about their tax policies. Surely the time has come to accept that they will continue to take the same overall level of tax in whatever form, and to concentrate instead in holding them to account for the use they make of our money.
Kath, Sheffield, UK
I am sure that most people remember the 15% interest rates we had during the second Tory recession of their 18 years in power. Do Hague, Portillo and co really think the British people are naive enough to swallow all this tax cut garbage? If we elect a Tory government we deserve everything we get.
Simon Devine, England
The problem with tax and election time is that whilst people may say that they want improved public services and are willing to pay extra in tax for them, they will in the privacy of the polling booth be wholly selfishly and vote by their pocket book and not their social conscience.
Charles, London
So William Vague has thrown down the gauntlet to Labour on future tax rises. He says that the Tories will cut taxes, but when asked the question yesterday by a reporter on Sky News he refused to confirm that he would never increase taxes.
It's about time the two major parties got over this ridiculous obsession with having to have the lowest taxes and go back to the days of nationalisation. I would certainly pay more to be in a better country than the one we're in at the moment.
Liza Russell, Huntly, Scotland
Taxes should be cut. Governments are intrinsically not good at spending money wisely. More taxes equals more bureaucrats which equals more rules to justify their existence, which equals more taxes and more bureaucrats and so it goes on. Spending more money on public services will not of itself solve any problems, in fact it's likely to make them far worse as we have seen for many years.
It's fine saying that we pay less tax and keep more of our hard earned money but have all the people calling for this forgotten about the mass unemployment that was caused the last time this type of policy was implemented under Thatcher and then Major? If we allow the Tories back into power we might not have jobs to pay tax on. Think on when you cast your vote on June 7.
Robert Hopkins, Preston, Lancashire
Wasn't it the Tories that reduced the value of the married person's allowance and mortgage tax relief to almost meaningless amounts? It's hypocritical, then, to denounce Labour for removing them. What they replaced them with, an arbitrary "Child's tax allowance", is unfair to single earner families. Why do dual earners on £30K each get it, but a single earner on £40K not? However the electorate promotes a "something for nothing" culture in our politics: we want tax cuts but still want big government to take responsibility for too much.
As long as every citizen of this country believes that they as an individual should pay less tax (and there is plenty of evidence of this in these responses), politicians will be too scared to be honest about the subject and will use all the obfuscation they can to conceal the reality that you cannot have adequate services without people paying a realistic level of tax.
Joe, London, UK
When is VAT going to be discussed? It is the most unfair of all the taxes and should be no more than 5%. VAT taxes rich and poor equally and yet no low paid people seem to object to this Euro tax. Taxes should be collected fairly and not imposed as disincentives either. If we should not use our cars so readily then it should be dealt with by legislation and not price. As it is the rich can continue their lifestyle and the rest have to suffer or go without. What a damming indictment of a Labour government.
All the parties seem to treat the electorate like fools when it comes to tax. For Labour to not raise income tax, it must raise taxes elsewhere otherwise it can't increase public spending. Likewise, Mr Hague has missed the point in offering a 6p cut in petrol duty, when the price has gone up 4p in the past month alone! The problem is, if all stealth taxes were abolished then it would raise income tax for all to levels that would either cause a taxpayers revolt or send many employers overseas.
Matthew Wright, Mold UK
UK politicians, no matter which party must think us all fools. They reduce income tax, but increase virtually every other tax going (and even invent some new ones) to claw back more and more of our hard earned cash. This hits everybody, rich and poor on thier purchases. There is a problem here though; the labourer earning 10,000 per annum pays the same tax on his purchases as the corporate executive earning 100,000. Surely it would be fairer to increase income tax and reduce (if not remove) the so-called stealth taxes.
This is a complete non-issue, as most of the election is. All parties are basically committed to the same ends and by the same means. Not one has mentioned the costs of, The Scottish Parliament (and it's expensive new building), the Welsh Parliament, the Westminster Parliament (and it's very expensive New building, the most expensive office space in the UK!), the European Parliament, the European Commission, local councils. Never has anyone costed these things - add in the dome and the proposed 8 billion tax cuts pale into insignificance.
I am a little concerned that, apparently, neither the Conservatives, nor Labour's sums add up. Surely those in charge of our country's financial future should be able to handle simple mathematics?
I would go for an end to stealth taxation, and put it all on income tax. But reducing taxes? How come the average Frenchman or German, who pay higher taxes, live better off than the average Briton, despite living economies who are deemed to be less healthy than the
UK's
In the end, we're all dumb to the point in voting. It doesn't matter who wins in the end, they all bring about so called stealth taxes. How they can tell the public on their campaigns they'll do this and do that, is beyond belief! I certainly wont fall for it again!
I want a government which will spend less, tax less, legislate less and simply leave us alone.
Gaggle on as much as they do, All politicians are the same. Always promises here, promises there. When they win, those promises are all out of the window. They wont get my vote again!
Of course the Tories are right when they say that 6p off a litre of petrol can easily be offset by savings in expenditure. After all think of the savings on benefits. One pensioner or NHS patient will die for perhaps every 500 gallons worth of petrol. Thus automatically cutting costs. A small price to pay for a day out at the seaside or using the car to go to the corner shop to buy fags. Also vouchers could be given so that motorists that believe old age pensioners should die for cheaper petrol could save for their grandparents' funerals
It's fine saying that we pay less tax and keep more of our hard earned money but have all of the people calling for this forgotten about the mass unemployment that was caused the last time this type of policy was implemented under Thatcher and then Major.
A waste of time, once/if we join the United States of Europe, Tax and spending will have to become central otherwise the whole concept of a single market/state is lost. Taxes will be like the US of A, Federal ones and state ones, state (i.e English taxes) small fry. The real issue is 'do we join Europe or not?, sort that NOW and whichever way we choose we could actually get on and sort the country out instead of wasting time and energy pretending it is not an issue as we wait for the War Generation to die off.
Wasn't it the Tories that reduced the value of the married person's allowance and mortgage tax relief to almost meaningless amounts? It's hypocritical, then, to denounce Labour for removing them. What they replaced them with, an arbitrary "Child's tax allowance", is unfair to single earner families. Why do dual earners on £30K each get it, but a single earner on £40K not? However the electorate promotes a "something for nothing" culture in our politics: we want tax cuts but still want big government to take responsibility for too much.
Andy J, Hants, UK
Tony Blair has an enormous majority and is presented with the weakest opposition for some long time. Now is the time to make the case for higher taxes to fund better public services. So why is he too scared to do so?
Under Labour mis-rule, taxes have steadily been piled on in the most sneaky, stealthy way possible. Pensions have been silently plundered to create the false impression that Labour are the party of fiscal rectitude. They are certainly morally bankrupt and would have a huge overdraft if there were such a thing as a truth bank.
Taxes are the foundation of power for any political party. Unfortunately, power has the tendency to corrupt and total power corrupts totally. No politician will willingly give tax money back to the hard-working taxpayers of the UK. This is the money that pays their wages and funds their wasteful, ill-conceived policies after all. Any so-called 'tax rebate' promises should be viewed with the contempt they rightly deserve.
David Thomson, Newcastle, UK
I believe the politicians on tax - that
they'll lie, lie and lie again, all of them.
None of them have the common sense
to realize that what we want is
simplification. Abolition of all
excise duties, & replacing VAT with
a flat-rate purchase tax on everything
would be a good idea. Income
tax is too complicated to be reformed,
so scrap it altogether.
Replace all means-tested benefits
with benefits paid to all. That would cut
out benefit fraud, and remove the
"poverty trap" which is such a feature
of the current system.
In the past 4 years public companies have had a huge amount of windfall tax money taken from them. The owners of these companies our pension funds have in effect lost this money. Have we not been collectively attacked our future private pensions? I might add the loss of tax relief on dividends has taken 20% off income form dividends which will only be felt after the election. Is Gordon Brown going to own up to robbing our future our private pensions and savings to fund an election win?
Tony Blair is a liar when he talks about tax. I am a victim of one of his stealth taxes. Has my tax burden increased since New Labour took power? Oh yes - quite beyond belief. I think William Hague should promise everything to everybody - just like Blair the Liar!
Andy Gilbert, London, UK
What a pity that the paid-up Conservative Party members contributing to this debate have such short memories! The last Conservative Government left behind a £28bn public sector debt that took the Labour Government two-and-half years to pay off. Hague,Portillo, Widdecombe and the rest of the Tory frontbench all enthusiastically supported the Poll Tax, VAT on domestic fuel which hit pensioners and low-income families so hard. Above all the Tories had 18 years in power before and they did not reduce the burden of taxation, they increased it!
Labour are promising
not to raise the rates of taxation again.
That is not the same as raising tax.
In the last four years a greater proportion of GDP has been taken in tax and a lower proportion spent on hospitals and education compared to the John Major administration.
Brown wants the money to spend on entry into the euro.
The Labour promise at the last election was not to raise the basic or higher rates of income tax which, palpably, they haven't. The fact that the Tories didn't shout loudly that this is not the only way of raising tax revenue is because they used exactly the same trick! But where did the money they collect go? I would suggest mostly down the drain; at least Labour are spending, if a little late in the day.
I don't see how the Tories believe that fuel tax hits the poorest most. It hits the owners of the biggest cars Usually the rich most and those without cars usually the poorest the least.
If they were really so concerned about the poor and rural areas they would use the £2.2bn to improve the public transport to deprived and rural areas. But of course they won't because it's not a bandwagon they've thought of jumping on yet.
Frodo, UK
The Tories will do what they always do (no matter what it says in Hague's manifesto) and give tax cuts to the rich and those who don't need it, such as married people with no children, and lump more taxes on the poor. The funny thing is the poor will vote for them! As for 6p off a litre of petrol, that will benefit drivers for a few months until the oil companies put their prices up again and then what is he going to do?
Despite what Hague says, I don't feel that I am paying any
more in taxes under the Labour government.
I did pay more tax under the Tories, the allowances never kept pace with inflation, and sometimes
they didn't get updated some years. Only the rich had tax cuts under the Tories, the rest of us had tax increases.
I am getting sick of continuing policies by successive governments to squeeze more and more money out of the hard working community in this country. It's time for the state to back-off. Will the state ever give anything back as in lowered fuel taxes?
I applaud the Labour Government for giving the Bank of England independence; it was a significant release of control. A greater release of control would be to state and enforce allocation of taxes to expenditure. Such a move would gain significant public respect and boost public debate over both taxes and expenditure.
John Sreeves, Swindon, UK
Tony Blair is an inveterate liar. Under his leadership, Labour have put airport tax up by 200%, and have effectively stifled young IT companies from growing.
It seems extraordinary that taxes continue to be raised ever higher, and public services continue to crumble. The answer does not lie in raising taxes higher still, as Labour will undoubtedly do if re-elected, nor does the answer lie in the Tories headline-grabbing populist cuts. The only answer is for a complete overhaul of the tax system, stop the tinkering, scrap the whole system and design a new, fair, system from scratch.
How many parties and foreign trips abused by politicians do our taxes pay for? I would not trust a politician on any subject, least of all telling the truth.
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