In an interesting op-ed in the Observer, the Shadow Chancellor had plenty of advice for Alistair Darling, as he takes over the reins at the Treasury. In one of the key parts of the article, Mr Osborne wrote: “Britain's businesses will be held back so long as we have some of the highest corporate taxes in the developed world. Your first Budget is nine months away. That is plenty of time to prepare a programme of major tax reform. Your objective should be simpler taxes and lower tax rates. You should also shift the tax burden away from income and onto pollution and examine the case for a reduction or abolition of stamp duty on shares.”
It’s good that George Osborne is talking about cutting tax rates and simplifying the system, and we applaud him for that. But as he made clear after March’s Budget, cries of “tax con” will follow unless the overall tax burden is reduced at the same time. Unfortunately, other than an imprecise promise to “share the proceeds of growth” between public spending and tax reductions (which if shared in the wrong proportions could actually lead to a higher tax burden) and reduce the tax burden over an economic cycle (which if it is as long as the previous cycle could last for ten years), nothing is forthcoming from the Shadow Chancellor. If he could only be a little bolder in his plans to relieve families and businesses from the record tax burden, taxpayers would applaud him all the louder.