TaxAdministrationTax – it’s the talk of the election

Tax - it's the talk of the election

As we approach a general election, tax will crop up in conversation more often than normal and an accountant's expertise will be sought rather than feared - which can only be a good thing for the atmosphere at the average dinner party.

Will Gordon Brown raise taxes if Labour is given a third term? Will Michael Howard cut back on public spending to allow for his promised tax cuts if, by some miracle, the Tories get voted in? What about Howard Flight, will he ever dabble in politics again? Or indeed was he just saying, to paraphrase the Tories’ immortal words, what the rest of us were already thinking.

More questions are begged. Has Labour funded its extremely generous public spending spree with a plethora of stealth taxes? Will they rise again on May 6? It all makes for lively debate.

As the new tax year comes into being, the pre-owned assets regime gets under way and the finance bill gets debated, tax is truly at the heart of public life. It is a fact of life that tax is close to everyone’s heart. After all, even the Beatles sang about it, and it remains one of only three of life’s certainties.

Recently, Tony Blair said that the election would be won or lost on the economy.

A healthy economy wins votes. But, so do lower taxes and while Labour may be able to say with some conviction that the economy is safe under its watchful eye, it can’t say that taxes won’t be raised if it gets voted into a third term.

Tax continues to be a vital vote-winner in the lead-up to any election, and by mostly avoiding the subject in its pre-election Budget, Labour has fooled nobody.

The general feeling is that taxes will be raised under Labour. Blair’s spending plans, a deficit in the public funds, and Treasury projections for a vastly inflated tax take going into the future all point to the same thing: tax hikes.

Perhaps the only real question is which particular taxes will be raised? VAT seems like the most likely option because it hoovers up a large sum of money and is relatively simple to justify.

Just don’t try and mention before a general election…

David Rae edits the tax page

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