The dubiously talented array of non-job holders at the so-called Taxpayers’ Alliance (TPA) have been banging on ad infinitum (and arguably ad nauseam) about the 50p Income Tax rate. And, as I pointed out earlier this month, this campaign has resulted in another glorious failure for the comfortable of Tufton Street, as the higher rate is set to stay.
But the fight has today been rejoined by J-P Floru, who has previously made the routinely fraudulent claim that the 50p rate “harms the poorest in society most”. One should expect no less than the finest bovine by-product from someone who is head of programmes for the Adam Smith Institute, that museum of outdated economic thought that has fraudulently appropriated the name of the founder of economics.
“Cleaners, Gardeners And Housekeepers Are Losing Their Jobs Because Of The 50p Tax Rate” is the blustering title of Floru’s latest attempt to suggest that those trousering the odd half mil a year are strapped for disposable income. But his effort gets off to a bad start when he asserts that “A person with an income of £500,000 now pays £50,000 extra in tax since the 50p rate was introduced”.
The 50p rate only kicks in at an income level of £150,000, so for anyone earning £500,000, this means that the new rate is applicable to £350,000 of that income. That makes an extra £35,000, which suggests that Floru failed to engage brain before composing his sob story. So when he poses the question “A full time live-out nanny-housekeeper earns, on average, £20,000 a year. Guess which savings are made first?” the answer is, they only amount to £5,000 if you can do your sums.
This, though, does not detain Floru, who talks of all the chauffeurs and housekeepers who are alleged to have lost jobs. I’m sure all those unable to afford either before stumping up yet more for their season tickets will try their hardest to sympathise, but may come up short on that one. And they may also find Floru’s star witness less than totally credible.
Because that witness is the preposterously self-important Simon Heffer, who apparently likes to go shooting of a weekend. Well, bully for the Hefferlump, say I. He also favours cuts to the minimum wage and a £35 billion public spending cut, in addition to removal of the 50p tax rate. The resulting extraction of spending power from the economy would have an effect, but maybe not the one he wants.
Because that effect would be to increase unemployment, increase welfare payments, and reduce tax revenues, potentially tipping the economy directly into recession. There’s a good reason that folks like Heffer and Floru should be kept away from the levers of power: their daft ideas, bad maths and blinkered vision make for amusing copy, but would be utterly lethal to the health of the economy.