Sunday, 22 June 2014

Reasons for Labour to drop austerity

 What Andrew Rawnsley in the Observer suggested is that Labour must adopt failed Tory policies of austerity or lose the election! (Labour needs to be candid about painful cuts it will have to make,15/06/14) "The cuts Labour would have to make" will certainly reduce the size of the state, but as the Tories have found, will not get rid of the deficit; as Rawnsley admitted, Osborne "was supposed to have it eliminated " by 2015, but it will still be around £80bn after the election. Why should Labour adopt such ineffective measures, when transformational policies are needed to regain the trust of the disillusioned supporters who voted for Ukip in the recent Euro elections?
      When the austerity measures began in 2010, political commentators of all persuasions were surprised by the ratio of cuts to tax being in the region of 80:20, and Miliband needs to have the courage to say that his party will change it dramatically. Rawnsley mentioned some of the obvious ways a future Labour government would "raise extra revenues from tax rises targeted at the wealthy", but there is intellectual and economic support for more. Piketty has shown the Laffer curve to be economic nonsense, and recommends that high-earners in the United  States should pay 80% tax, so Labour has the ready-made theoretical justification for an all-out attack on inequality. Even the IMF has admitted the rich in Britain can afford to pay more! Labour has already unveiled plans for a 10% starting tax, and could develop this further with a sliding scale for income tax, so that by the time earnings reached between £65K and £150K the rate would be 45%. From £150K to £200K, it would rise to 50%, increasing incrementally, and stopping at 80%. Would that appear unreasonable to the majority of people in this country, where the number of food banks has increased exponentially under this government, and where average earnings are around £26K, an amount earned in two and a half days by the FTSE 100 bosses? Working full time on the current minimum wage yields the disgraceful annual gross income of around £13000. Parties which do not pledge to change drastically this situation, in the 7th richest country in the world, do not deserve anyone`s vote! 

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