Taxes must be cut

The Government should be ashamed that the tax burden on households and businesses has hit a 50-year high: 34.6 per cent of gross domestic product. There is no point to the Conservative

Party if it doesn’t cut taxes, or at the very least hold them steady. Yet, as we reveal today, British taxpayers are being hammered more heavily than during the worst of the Gordon Brown era. In fact, we are paying even more than during the socialist Seventies: it beggars belief that the Tory party cannot see that it has lost its way.

Cutting taxes is a moral duty: excessive levies sever the connection between hard work and reward, and disincentivise effort. Lower taxes also serve a practical purpose, freeing money for investment, driving growth, raising salaries and creating jobs. A low-tax economy is the best guarantor of a healthy economy, assuming of course that spending is kept under check.

In some cases, lowering tax rates actually bolsters revenue. A cut in corporation tax from 28 per cent in 2010/11 to 19 per cent this year has gone hand-in-hand with increased tax receipts by 25 per cent. It’s almost certainly true that cutting capital gains tax today would boost the number of housing transactions so much as to yield greater tax returns to the Exchequer.

A creative, philosophically conservative government would be talking about transforming the British economy by liberating the private sector, not offering special interest groups the hope of increased funding. Yet this Government’s first instinct is to chuck taxpayers’ cash at every problem – a profound betrayal of the small state heritage to which they supposedly pay allegiance.