Do you, like I, not only feel confused about the current taxation philosophy by the government, but actually find it counterproductive in many ways. One of the things that I refer to, is the question of budgeting. The Labour party, when they were in power, fostered some things that made sense, Iike trying to maintain a steady rate of tax, rather than periodic changes in the system and the amounts involved. They wished, as I understand it, to foster saving by the electorate, because this also gave them the possibility of budgeting, based on loans, whereas with the fluctuating deficit, it made budgeting almost impossible. Unfortunately they were not in power long enough, after having made this decision, for it to be effective.
I expect that you are sick to death of hearing me moan on about the good old days, even though they had some pretty bad aspects. In those days we were brought up, from early childhood, to save not just money, but everything, we were a nation of horders. Practically everything was too valuable to throw away. People like myself, therefore, don’t get the level of financial help commensurate with those who have been spendthrifts, and are automatically entitled to. Saving is not merely a matter of hording when it comes to money, it is mainly budgeting for the future, ensuring that in our old-age, when we are living on diminishing returns, standards will not fall too low. If they bring in swinging inheritance tax, there is little purpose in saving too much, because those coming after you will no longer reap the benefits that you have anticipated. In effect you are budgeting in the light of inheritance tax levels. Hence, this is a two edged sword, the government will be paying out more in support, while at the same time having a diminished source of borrowing. In other words nobody gains, because the spendthrifts are bound to come upon hard times with no capital to ease the burden, the government will be under greater financial stress because they’ll be totally relient on the taxes rather than additional borrowing.
In my parents days they had little hideaways where they put money for specific needs, and a lot of the payments were in small sums on a weekly basis. This was their form of budgeting, and debt was an anathema to them, almost right across the board. I may be wrong, as I just did not understand a lot of the rhetoric we were presented with at the time of the election, and I feel that I am no wiser, because the signals we are receiving are not clear and indisputable, they give the impression that those stating them a not too sure themselves. It seems to me we’re going from one muddle into another, where there are no signposts, and those leading us are just as bewildered.