9 months ago

The Iconoclast FEB 2018


JOSH BOUGHTON debunks Labour’s policies Jeremy Corbyn, a modest, unassuming man who wears opennecked shirts and slacks has been in the centre of the political spotlight for the past year or so. Corbyn became the Labour party leader in 2015 after the resignation of Ed Miliband. Mr Miliband went into the 2015 general election with policies including a freeze on fuel bills and a "mansion tax" on homes worth over £1m, and the polls showed Labour and the Tories neck and neck. However, the result came out as another Tory government leading to the rise of “Corbynmania”. I have to give credit to Corbyn for gaining so much significant support especially from the younger generation on his new policies that claim to be ‘for the many, not the few... ‘ Idealistic policies But, how realistic are these policies- can they be achieved? How is he going to fund this vision? It will be fine- he will just slam the wealthy on tax rises, or just renationalise the railways or perhaps even just slash £19.4b from firms via corporation tax. Surely that won't do any harm, will it? I have my doubts… University Fees JEREMY CORBYN, LEADER OF THE LABOUR PARTY Let’s look into the scrapping of student tuition fees for university. I think we would all agree that the abolition of tuition fees would be a great thing- no student debts to worry about; no pressure on finances; it would reduce the social discrimination of students who cannot afford the fees. However, where would we get the finances from? To fund 550,000 students a year entering higher education accumulating to £51 billion a year… Wait, Corbyn’s got an idea- we can tax the top 5% of earners even more than the 45% threshold on income tax. It doesn’t work like that… Taxing the rich won’t work Slamming the rich with even more tax will simply just result in them shifting their money offshore, resulting in lower tax receipts than in the first place. This is called the Laffer curve. This leads on to your families disposable income being squeezed due to income tax hikes from the Labour Party. So imagine- you’re now out of university, all funded by the government (due to no tuition fees); you’re very happy now because you now don’t have the burden of student debt on you as the government have paid it for you, and suddenly down comes your tax payments to the government - 10% more than last time leading to huge cutbacks on consumer spending, slashing GDP to its lowest point and reducing disposable incomes across the nation. Corbyn is very critical of the current government’s weak productivity levels blaming it to be the sole cause of weak UK GDP, and in some ways, I agree, but at least the Tories are doing something about it

JEREMY CORBYN SPEAKING AT GLASTONBURY IN 2017 The Labour manifesto says that they will raise the current corporation tax levels from 19% to 26%, Raising corporation tax by that scale in such a short time period will be severely damaging for the UK economy. Rising corporation tax will increase firms costs of production, thus leading to rises in average costs- leading to a reduction in total supplies as firms are less willing to supply goods and services at that price, in that time period. If we take this to a total scale, a rise in corporation tax will, in the long run, lead to a fall in GDP and- by the scale of the rise in tax- by an awful lot. Also, the tax is part of the cost of businesses investments; investments in machinery, labour, capital goods (such as computers) all lead to rises in productivity some way or another. Increasing taxes will reduce profits made on these investments, thus leading to firms cutting back on investments, leading to reductions in productivity, therefore making the situation worse in essence. I really don’t understand Labour’s new policies. Tax increases are only going to hit Britain’s top earners? Their manifesto will increase income tax for 1.2 million people who earn £80,000 or more a year, and add a new 50p tax on all earnings over £123,000 on every £1 earned. If they claim to be for the many, not the few, why tax the few and leave the many out? Surely that just contradicts their manifesto? Increasing taxes on a mere 1.2 million people when there are 29.3million taxpayers in the UK, it doesn’t make sense to me. Labours policies are overwhelmingly optimistic and simply unrealistic to achieve effectively in the time they say they can do so. LABOUR SAW A LARGE INCREASE IN SUPPORT DURING THE 2017 ELECTION