Saturday, 29 May 2010

Simon Heffer on the immorality of CGT

Via Anglo Austria I discovered a Telegraph article by Simon Heffer:

One of the worst features of Leftists – such as Vince Cable, the Business Secretary and inventor of the idiotic proposal to raise capital gains tax (CGT) – is that they believe people with assets exist purely to be taxed. Furthermore, they seem to believe that the so-called rich (in other words, anyone who has been putting money away regularly for his or her retirement) will not only not mind this happening, but will be in some way grateful to have their guilt at being "rich" assuaged by being kicked in this way. They could not be more wrong.

The whole principle of CGT – even at the existing level of 18 per cent – is unacceptable. Most people who make a capital gain these days do so using money they have earned, and which has already been taxed. They have often made capital gains by investing in the stock market, and therefore putting their money to the service of helping another enterprise to grow, and to create prosperity. Unless we create prosperity, other people won't have jobs, but will instead have to throw themselves on the mercy of the state; and if they don't have jobs, they don't pay income tax, which means a shrinking pool of those in work must fund everything society deems it needs: hospitals, schools, pensions and the rest. More to the point, encouraging people to save for their long-term future is entirely sensible because of the burdens it removes from the state. So why decide to punish such positive behaviour?

Excessively taxing people's thrift, enterprise and hard work is not only morally offensive: it is also bad for the financial health of our country, and for our ability to raise our standards of living for the future.

I think it is shameful that a Conservative chancellor is going along with these plans. They would be immoral and counterproductive at the best of times, but it is especially galling that the Capital Gains Tax rise is being contemplated while there is still so much waste in the public sector.

Heffer concludes his piece on the politics of envy with thoughts on redistribution, with which I wholeheartedly agree:

Dr Vince poses as a man who understands economics, but at heart he is a redistributionist. The only redistribution we need at the moment, however, is of the public's money back into their wallets.
Unfortunately, Heffer then goes on to demonstrate the worst kind of authoritarian biases on drugs and prostitution. It's amazing that traditional Conseratives can speak so much sense on taxation, and so much rubbish on social issues.

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