Monday, 20 February 2012

Do Labour understand "Fairness"?

Back when they were Mr Brown's Boys
Ed Balls has jumped on the bandwagon that Nick Clegg started in calling for George Osborne to cut taxes.  It is good to see the opposition at least attempting to set out an alternative, however they still seem to think we can borrow our way out of our debt problem.  However one line struck me:

"The shadow chancellor said he favoured a cut in VAT - which is a sales tax rather than a tax on income - because it would be the "fastest and fairest" way of boosting the economy."

Now, I know I argued against the VAT increase when it was first increased (as it is regressive), however that doesn't mean it's not fair, those who pay the most are hurt the most.  

Contrast this with the Lib Dem's priority - increasing the personal allowance.  That means that anyone earning above the new threshold and below the higher earnings limit will benefit, irrespective of how they chose to use it (i.e. use the extra money to pay off personal debt rather than spending it).  In my opinion giving people this choice is fairer (as long as those below the line also see their income keeping up with inflation).  

To me, telling people that the fairest tax to cut is one that makes luxury items more expensive is quite ludicrous.  

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