Saturday, September 09, 2006

Larger tax on lager, thanks to Brussels stitch-up

The EU has recently announced an increase in the minimum rates of duty on alcohol, ie your German / Czech half-litre will cost more. Alcohol duties have to be set within a range determined by the EU, its one area where tax harmonisation already exists to a limited extent. The increases are calculated and presented as inflationary.

Consequently several member states will have to increase duties on beer and whiskey. But not on wine, as the minimum duty is nil, which when multiplied by an inflationary factor still comes to nil. So at least the maths ability of the EC is improving. They might even get their 1994 accounts drawn up within the next decade at this rate of progress.

This isn't harmonisation to ensure that the internal market functions smoothly. Nor is it an attempt to reduce smuggling, that would be best done by UK Customs being more efficient or UK duties reducing, or failing that forcing France and the UK, and Sweden and Denmark to align their rates.

Its protectionism for the European wine industry by enabling Continental Member States, in fact 7 of them, to avoid having duty on wine, whilst charging, and being forced to charge duty on competitor products, eg UK spirits and Eastern European beer. Curiously, there are a number of State Aid cases going on throughout Europe whereby a specialist tax relief available to a particular region or industry is held to be an illegal subsidy. The TaxCutter fails to see why not levying duty on wine, whilst levying duty on other alcoholic beverages, is not similarly illegal state aid. And the answer is because the EU applies the rules based on political not legal analysis.

How does this affect the UK. Predictably, UK duties already exceed the new minimums.

To get to this answer, the Commission wrote to Member States asking for the information to compile their analysis. Here's what help they got:

"We have received data on excise rates and consumption from some member states, but not all. We received comprehensive replies from Austria, Belgium, Germany,Denmark, Finland, UK, Ireland, Netherlands, Spain and Sweden. We received partial information from Greece and Portugal. We have not received data on excise rates from France, Italy and Luxembourg and data from these countries had to be completed using other sources."


Wednesday, September 06, 2006

Dave the Irrelevant

Call me old-fashioned but aren't you meant to do your gap year between school and university, rather than between party leader and Prime Minister.

Whilst New Labour falls apart, with widespread criticism of the government's failure on crime, tax, health and education Dave tries to write the Not-so-Rough Guide to Asia.

Law and order is in a shocking state, but its David Davis scoring all the points against the opposition. British troops get killed in Afghanistan, but DC doesn't call Blair to account for broken promises. Education standards slip again, but where are DC's reforms to raise standards. The A-List has been ignored by party members, and reforms to the employment of Party Agents and local campaigning strategies have not been heard of. Dave taunts Gordon Brown as being the Fossil-Fuel Chancellor but about the only remaining supporter of Brown's attitude to taxation is DC's guru Oliver Letwin.

And in the meantime, the wider party is leading public opinion on tax cuts, a broken windows law and order policy, continued Euroscepticism, and greater choice in health and education. The new political agenda for the UK is being set by rightwing bloggers representing the wider Conservative party. DC just goes on holiday and rides his bike. Dave better jump on the bus quick, because its moving forward, in the right direction, and sooner or later it will work out that it doesn't need the current designated driver.

Monday, September 04, 2006

Gordon's achieves 116% UK tax laws

A quick count of my Tolley's at work today showed:

9,841 pages of direct tax law now exist - there were 4,555 on 1 May 1997 - an 116% increase

12,763 pages of total tax law now exist - vs 7,013 on Brown becoming Chancellor, an 82% increase

The only reason that the VAT laws have grown slowly is that Gordon's too scared of changing the rules without the EU's permission. The above stats miss out Gordon's bungled tax reforms that he' s since had to repeal, eg the zero rate of corporation tax for small businesses, stamp duty relief for disadvantaged areas, numerous goes at film tax reform etc.

All told UK tax law is a mess. Whilst the rest of the developed world seeks to make itself more attractive for investment the self-penned Iron Chancellor rusts the UK economy with pointless complexity.

The above figures include Statement of Practices, Concessions and secondary legislation. The former has barely increased, the latter have been used with ever increasing frequency

Sunday, September 03, 2006

Lots on cutting taxes in the paper

Lots on taxes in the papers. We are about 5 to 6 weeks off from the Tax Reform Commission publishing, so raising tax on the political agenda is as always a good thing.

1. Conservatives still don't really understand the art of tax-cutting

The Business tears apart the Dave illogic to not cutting taxes

2. Britain's poor are paying higher taxes under Brown

A-List Rejectee, Charlie Elphicke makes great ground with tomorrow's publication stressing how the poor now may more in tax than in 1997. Norris and Cameron - please note, increasing road fuel duty will only make the poor's position worse

3. Public sector reform then tax cuts

Chairman of Reform publishes a Cameroon article which has a streak of "economic stability must come first". Its also contrary to some of Reform's own views on taxes. He is right that making increasingly necessary reforms of the public sector would enable tax cuts, but these should be more tax cuts, the arguments for tax cuts, which will actually increase tax revenues, in the first place is strong - see the first article. Cutting taxes and reforming the public sector should be concurrent policies.

4. Senior Tories call for cut in taxes

Several MPs look to have had their lot with DC's economic stability and nonsense and will push tax cutting back into the debate. If DC has any sense he'll absorb some of this into policy and remove the sting, and please the party, and when properly argued the electorare. If he does not and keeps refusing to pledge tax cuts, then he starts to look like someone who just doesn't get it.