We can barely afford to run the country despite the penal tax rates and the multinational taxes!
Yes, while there is considerable waste we still behave as if money is the constraint on whatever thing or activity we seek to have more of, when in fact it more often people, processes and bureaucracy and adding more money is just inflationary (of both labour and assets). I think that's where a good deal of our taxes go.
I think that capital taxes properly applied could be deflationary, which in present circumstances is a good thing given that capital values are increasing far faster than labour prices are increasing.
I also don't think our tax rates are penal. They are too high at marginal rates on middle incomes but given that nearly half the workforce pays no income tax and we have massive levels of social transfers the total effective rate on middle income earners is low by Northern European standards. After all most of the squeezed middle get back far more in social transfers than they give in taxes.
My issue is with how narrow the tax base is, how under taxed low income earners are and how reliant we are on three companies, Eli Lilly paid more tax last year than was paid in income tax by a million working people. We'd have a fun time trying to plug that hole and with Boston Scientific already moving their taxable IP abroad the signs aren't good, at least I wouldn't be betting the house on it all staying rosy, but that's exactly what we are doing.
If broadening the tax base is desirable, and it is desirable, then we should be increasing capital taxes, not reducing them.
