Economic illiterate of the day

1. Nick Clegg "... will say that the Lib Dems have abandoned their plans for a 50 per cent top rate of income tax ... but that the 40 per cent should mean 40 per cent, arguing for reducing pension tax reliefs to the standard rate" [good stuff so far, to be fair] "He will also oppose the 'fundamental iniquity' of taxing capital gains at 18 per cent ... which he believes encourages tax avoidance by the representation of income as capital gains and distorts business behaviour. Although he will support reforming the stamp duty system he will argue that there is no reason for prioritising the removal of stamp duty on shares ..."

Woah! Capital gains should not be taxed at all! I admit there is a problem distinguishing between capital gains and income, which could be resolved by having a five-year taper period or something, so that the rate of tax reduces the longer the asset is held. Further, capital gains tax massively distorts business decisions - it discourages consolidation of smaller businesses into larger more efficient businesses - it drives a wedge between willing seller and willing buyer. Either way, it only raises a couple of billion, so however much you muck about, it won't increase revenues much. Stamp Duty on share sales is another wicked tax, for revenues of a couple of billion a year, it is driving business away from the UK to other countries that don't have it, which is most countries.

Nick also waffles on vaguely about "the scrapping of tax loopholes" and using the proceeds to pay for cuts in corporation tax. *Sigh* if there's scope for tax cuts for UK plc, it should be the EU's beloved VAT and the socialists' beloved Employer's National Insurance that should be cut first, but all-in-all, low simple taxes are better than nominally high taxes with loads of loopholes.

2. The Goblin King. Under advice from Imelda Walsh, HR Director at J Sainsbury plc, he "...is expected to signal a significant extension in the right to request part-time flexi-working ... The flexible working proposal has the advantage for Labour of pleasing the unions, which provide more than 75 per cent of the cash-strapped party's funding."

Now, this is clever! He can con people into thinking that this is a cost-free exercise, under which everybody wins; it is not, of course; part-time workers tend to earn less (as well documented) so he can then of course set up a few quangos to enforce all this shit. The name 'Sainsbury' is very relevant of course - Nulab is in hock to Lord David Sainsbury to the tune of £2,238,000 (see note 28, page 21). J Sainsbury plc are getting great value for money - for them, organising maternity leave and shift working is relatively easy, but this will make life a total misery for smaller retailers (as Ian QT pointed out yesterday) and it keeps Nulab's other paymasters, the trade unions happy. 

Economic shite, political gold. And let's judge these Socialists by their own standards, they want money and power and couldn't care less about free-market economics.

3. David Cameron is an Übertwat. On the one hand "Tories promise to cut red tape on small shops" [good, cutting red tape always good] and also "...proposed tax breaks for small shops in recognition of the special contribution they make to communities."

Woah! Stop right there! Politicians who utter the phrases like 'tax break', 'recognition of special contribution' or 'communities' are clearly morons who understand nothing. Shopkeepers are, or should be, in it to make money, not to "make a special contribution". The reason we have so many large chains is, all-in-all, because they are more efficient. 'Picking losers' this is called, politicians always pick losers.

That would be bad enough, but, The Goblin King made his flexi-time proposals (partly) because he "is not keen to be outflanked by the Conservatives, who have already pledged to extend the flexible working right to the parents of all under-18s." (see link in section 2).

So ... reduce red tape on small businesses ... but burden them with flexi-crap? Give them tax breaks ... conditional on filling in endless forms to prove they've made a 'special contribution'?And leave the burden of red tape on large stores unchanged ... but give them the subtle relative advantage that regulations give large business ... whose side is he on?

Again, the Tories are supposed to be the economically literate party, and it seems fair to judge The Chameleon by his own standards ... and to judge him a miserable failure. Perhaps he missed the lecture on "Economies and diseconomies of scale" while doing his PPE degree at Oxford?

On today's form, Nick Clegg appears to be the least-shittest option, and that's saying something.