Tom Clark Prospect

Life’s twin certainties: debt and taxes

When a big bill arrives in politics, a big row about who’s going to foot it is never far away. As the virus hit, governments rightly postponed the reckoning— keeping the economy alive took priority. One-off costs such as the furlough can, arguably, be managed perfectly well by higher debt over many decades. But even before Covid-19, we were taking too little in taxes to cover the public services and pensions that our ageing society demands.

The bumper emergency overdraft has made this underlying truth harder to dodge. Boris Johnson has shown his hand with a National Insurance hike for health and care. Some raged about both the substance (this tax hit young workers more than pensioners) and a breached manifesto pledge. But selfdenying ordinances about the main taxes were bound to end in tears: either they’d be broken, or they’d be honoured by hasty recourse to hare-brained new levies.

Unless, of course, we can find principles for smarter tax. Labour’s Angela Eagle (right) offers welcome thoughts on shifting the burden from earners to owners. Edward Troup (below) warns us against the populist temptation of believing faceless corporations can bail us out. In the end—whether as owners, earners or shoppers—it’s people who pay tax.