There is a must-read article from Patrick O’Flynn in today’s Daily Express that reinforces our arguments in favour of small government and that there is a point at which government must realise it has to get out of civil society.
O'Flynn writes that rather than admitting he was wrong over the abolition of the 10p tax band on the lowest paid, biting the bullet and looking at ways he could save £7billion from government to pay for its return, Premier Brown has fallen into the ‘government knows best' mindset and set about having government compensate [read: intervene in the lives of] those hit hardest. The killer line from O’Flynn:
“Despite the urgency of the task [of government creating a way out of the debacle], whole phalanxes of Oxbridge Firsts have failed to come up with a workable compensation package”
Zing! No matter how many of the smartest technocrats and civil servants you hire to plan, government can only do so much, which it often doesn’t do well enough to the satisfaction of the taxpayer. Our problem in Britain is that politicians and bureaucrats don’t know when to leave alone. Their own arrogance and hubris compels them to intervene further, either from a paternalistic ‘noblesse oblige’ to the poor or a Socialistic belief in planning and redistribution, no matter whether their acts make matters worse.
O'Flynn is right, the government should cut £7billion of spending to reinstate the tax band whilst keeping the 2% reduction on the former basic 22% rate. Then, shock, horror, you have a 2% tax cut that could improve people's lives and - if only marginally - prevent government doing more because it's docked its own allowance.
But alas, big government has created a strait-jacketed society - people simply can’t escape blundering politicians making matters worse with our money because they think they know best. It can be Brown trying to create another costly, bureaucratic scheme to 'compensate' the poorest hit by a tax hike or your local Town Hall using anti-terrorist legislation to send armies of bureaucrats to snoop on dog walkers.
The political ramifications of the 10p tax band, however, give us the best arguments for raising the income tax threshold to remove the poorest from income tax as well as providing greater incentives to work. In the long run, it should sit as a stark reminder to any government that, when in doubt, leave the people alone.