Tuesday, May 13, 2008

Time to make allowances?

On 1 October last year, Alistair Darling, commenting of the Tories proposes to reduce inheritance tax by around £3bn, said:
"Yet again, this is an example of where the Tories are making promises on tax which they can't afford to pay for,

"[George Osborne] is making a promise he hasn't got the money to pay for.

"If you do that, you create the very instability which is the last thing the economy needs and people in this country would pay for that."

Just over six months later, Alistair Darling, commenting on his proposals to reduce the tax on basic tax payers by around £3bn through higher borrowing, said:
"...as I made clear at the time of the Budget it is right and sensible to allow borrowing to rise and investment to be maintained as the economy slows.

".... Our fiscal policy ... is designed to support stability in these uncertain economic times generated by the turbulence in world financial markets and global commodity price inflation."

That's clear then. Unfunded tax promises are only reckless and damaging to the country's economic stability when they're from the Tories; otherwise they support stability in uncertain times.

As an aside, Darling's tax policy has been to increase personal allowances while reducing the bottom of the top rate band. If this policy was extended to its logical conclusion, you would end up with a flat tax rate. Maybe Labour has been taking lessons from the Adam Smith Institute.

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