British government raises top tax rate and makes one year reduction to sales tax

by Peter de Waal 25 November 2008 Looks like another one of my predictions from March coming home to roost. It's difficult to fleece those you left destitute after the last crash, and Gordon Brown seems to have accepted this logic by announcing a small increase in taxes for the UK's wealthy, as part of a desperate attempt to save the UK's economy. See the Guardian story Darling unveils 45p tax on rich to fund recession package (24 Nov). I don't think it will be nearly enough, but it's long overdue. It will be interesting to see what John Key makes of this move. He has also become a born-again Keynesian of late with announcements of public works and other fiscal stimulus packages. Those who voted for a right wing government here may be bitterly surprised when their taxes also increase. But at the end of the day Key is a member of the international finance speculator class, and this class has a deep vested interest in keeping their system going. It reminds me of what George Bush (W) did after his "election" in 2000. He dropped taxes for the rich. The rich smiled. He waged war in Iraq and Afghanistan. Oil, pharmaceutical, and military suppliers did well, all other branches of capital in America went to the wall. Particularly the small capitalists. I believe Key was planning something similar for NZ, but the credit crunch has put paid to it. In addition to usual Tory hammering of those on benefits, I expect he will now turn on the smaller capitalists as he attempts to keep the banks and other central institutions going, probably sooner rather than later. Key may be the banker's poodle, but he doesn't want to pull the whole system down. Workers just don't have the cash or assets anymore thanks to the last crash, so the predators will have to move up the food chain. Part of the economic stimulus package announced by the British government is a one year reduction in the VAT sales tax (the equivalent of New Zealand’s GST) from 17.5% to 15%. The British sales tax already excludes food items. See also Who bears the tax burden - the poor or the rich? A global battleground