Tackling Taxes for Economic Prosperity


In a recent essay published on this blog1, the present author highlighted the need for a libertarian strategy to be firmly and uncompromisingly radical, rooted in challenging the inherent injustice of the state as the ultimate destroyer of liberty. This is in contrast to gradualist or, we might say, deliberately half-hearted approaches, which are forced to accept the state’s basic injustices (such as its taxes, regulations, and monopoly over law, order and defence) and replace any radical principle with some kind of utilitarianism.

While it is wonderful that liberty brings with it heightened economic progress in the form of material increases in the standard of living, libertarians recognise that these ends do not justify the means. For example, if it could be demonstrated that murdering red heads would add a few percentage points to GDP we would still regard such acts as evil; the ability of everyone else to buy a few more pairs of shoes would do nothing to change this fact. Therefore, while leaps and bounds in the standard of living certainly add moral weight to the case for a free society they fail to add moral decisiveness.

Interestingly, however, it seems as though wedding oneself to a fundamental principle allows one to examine the economic effects of liberalisation more pertinently and that even on their own terms, gradualists, neo-liberals and utilitarians fail to make proposals which would bring the highest economic benefits. In other words, libertarians such as ourselves, who are derided for being too “utopian”, “principled” and “unrealistic”, seem to have a better grasp of the primary utilitarian case for liberty than do their more pragmatic brethren. We will elaborate on this observation here by examining the problem of taxation. Continue reading

A quick response to Mr. Osborne’s Emergency Budget


Christopher Houseman

This tough austerity budget, in which everyone will bear the pain together, has everyone at the BBC prattling on about the projected 25pc departmental spending cuts.

Apparently, everyone’s forgotten George Osborne’s admission that, because of his refusal to cut capital spending projects, overall Government expenditure is set to rise from £637bn to £711bn over the five-year term – a mere £74bn increase (that’s well over 11.5pc).

Wow! What a sacrifice by the State. Imagine how much more Government would have awarded itself if we weren’t in a recession.

I further note that, as indicated beforehand by David Cameron, some Government departments are more equal than others. Spending at the Department of Health (doh!) and the Department for Overseas Bribery Development won’t be cut. I guess the coalition Government needs to keep renting votes in the North-East and the UN General Assembly, and Big Business needs some more taxpayer-oiled overseas contracts in the “Developing” World.

Clobbered: middle England (esp. those on household incomes of £40-60k), anyone on State “benefits”, anyone planning a big ticket purchase in the New Year (when VAT will rise from 17.5pc to 20pc)

Pseudo-clobbered: the rich (28pc CGT is still less than the top rate of 40pc income tax, so that loophole remains cost effective), the banks (surely the new bank tax won’t be passed on to customers in the form of higher charges – will it?)

Encouraged: Some small business owners (various breaks relating to entrepreneurs’ CGT, NI breaks for SME’s outside London and the South East).

Overall: Open for (Big) Business as Usual.

The New Barbarossa?


Christopher Houseman

George Osborne’s emergency budget tomorrow will coincide with the anniversary of Hitler’s decision to invade Stalin’s Soviet Union in 1941.

Those of us who, on the one hand, grieve “New” Labour’s sovietization of British society and the UK economy, wait with some trepidation on the other for the new Chancellor’s pronouncements.

The coalition government is reportedly keen to raise income allowances but will at the same time penalise any attempt to translate this extra income into investment capital by slashing non-business CGT exemptions and raising CGT rates. Meanwhile, the combined result of reported plans to raise VAT with recent cuts in the number of tax inspectors is a subsidy of the so-called “black” economy. No doubt, this subsidy will be further enhanced by the usual rises in taxes on petrol, diesel, alcohol and tobacco.

When combined with ongoing efforts to artificially depress interest rates, the unmistakable end result will be to encourage people to keep spending as much or more than they earn, but to try to do so “off the books”. And no doubt any future reversal of the proposed war on capital gains will involve encouraging capital formation under the control of large financial institutions. I can think of no outcome more likely to disillusion coalition members and the wider electorate alike in the longer term.

In 1941, some people hoped that Operation Barbarossa could somehow result in both sides losing. Sadly, until control of the money supply (at the very least) is wrested from the political system’s cold dead hand, such a hope will again be too much to ask for.

All in all, it sounds to me like a good time to go long on gold, silver and ferry companies (the booze cruise boost), and short on the FTSE in general and off licence chains in particular.