The press and media have been salivating triumphantly all day today over the report by the Institute of Fiscal Studies that an Independent Scotland would have financial difficulties and would have to seriously increase tax revenues in order to make the books balance. This Institute has been trumpeted as being independent of political bias, but, as I have continually stressed in this blog, what does that prove, when all our political parties are committed to the same ideology?
The Institute of Fiscal Studies was founded by four men, a Conservative Party politician who was also a banker, a stockbroker, an investment trust manager and a tax consultant. In 2008, shortly after the banking crisis, this Institute's ideas for recovery included a plan to abolish corporation tax and replace it with a higher rate of VAT. Corporation tax is levied on company profits, so, these unbiased geniuses were advocating allowing companies to keep all of their profits, whilst raising VAT which impacts most heavily on the poorer sections of society. How does it do that? Because VAT is a tax on consumption, and poor people spend all of their income on consumption, they have to to stay alive and keep a roof over their heads. In 2008 corporation tax raised £52billion, thus, in order to compensate for that VAT would have needed to be increased from 17.5% to 28.3%. Thus, companies would have gained a nice increase in their income, whilst working people, the unemployed, the disabled etc. would have witnessed their expenditure rising by 10.8%
The Institute for Fiscal Studies may not be politically biased, but they most certainly are neoliberals to the core. Their analyses certainly start from the Thatcherite mantra that there is no alternative, and they therefore base all their calculations on the existing dominant economic ideology. Further proof of that is that the same report argued that VAT should be extended to include food, children's clothes and books. Such changes will impact very heavily on the less well off, but affect the wealthy only marginally. Another report by the Institute recommends abolishing inheritance tax, whilst another advocates removing tax on interest on personal savings. So, how many of you out there pay corporation tax? How many spend the bulk of your income on consumption however? How many of you gain large sums from your bank on interest payments on your savings? How many of you have had to pay tax on an inheritance? But of course all of these recommendations are all unbiased and value free and it is a pure coincidence that they all benefit the wealthy and penalise the less well off.
You see, the findings of the Institute of Fiscal Studies are only relevant if, after independence, Scotland stays the same and does not seek alternatives methods of governance and economic prioritising. However, should Scotland ditch the dominant neoliberal poison and seek more equitable forms of policy-making, then the Institute's Report is about as much worth as a chocolate cigarette lighter. There are alternatives, there are other ways, the people who live and work in Scotland are an intelligent people and indeed are a more caring and humane people. After independence, the Scottish electorate may just be daft enough to vote for a Labour government, but they most certainly will never be daft enough to vote Tory or Lib Dem. However, even the Scottish Labour Party will surely understand that they will have to be different from the Westminster mafia. Whatever the case, do not fret about the findings of the Institute of Fiscal Studies, and please, do not take too much notice of what they say. As I continually warn you, the state of economics in this country is on a similar scale as its democracy, decidedly dodgy. We are ruled by political and economic illiterates!!!
Your Servant
Doktor Kommirat
No comments:
Post a Comment