Often, the left like to portray tax cuts negatively: as a vassal for the rich to be allowed to keep more of their money. Whilst most tax cuts do benefit the rich, that doesn't mean that they don't also benefit the rest of us. High levels of taxation and poor economic growth are linked beyond a reasonable doubt, and the more that the left argue that low economic growth is the major problem in the economy, the more that they are making the argument for tax cuts for us.
Having said that, tax cuts do not need to focus on the headline top rate of income tax. There are plenty of other areas which are in dire need of attention, where low-cost tax cuts could make a real difference to peoples' standards of living in the country. One such tax is the fuel duty, currently levied at an eye-watering 73p per litre (61p fuel duty, and 12p VAT on that duty -- yes, they tax the tax...), which has been named by small firms as a serious detriment to their growth. We all complain at the greedy oil companies, but not many of us realise that as much as 60% of the price we pay for fuel is tax, and as little as 3% is oil profits.
Yes, the government pocket as much as 2000% of what Shell do, every time you buy fuel.
Found this little gem on Facebook and thought I'd share it...
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20. 'Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. 'I only got a dollar out of the $20,' declared the sixth man. He pointed to the tenth man,' but he got $10! ''Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too.. It's unfair that he got ten times more than I! '
'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks! '
'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor! '
The nine men surrounded the tenth and beat him up. The next night the tenth man ( the richest) didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.