August 07, 2006

more taxes

Personally I don't have much in the way of debts, I make sure that I spend only what I earn. A foolish idea I know, when there is the Welfare State around to penalise such behaviour. Many people follow the calling of the Welfare State and so spend far more than they earn:
A record 26,000 people became insolvent in England and Wales during the second quarter of 2006 - 66% more than in the same period last year.
This is personal bankrupcy increasing, not business
In total, 3,265 firms went to the wall, representing a decrease of 3.3% on the same period last year.
Why could this be happening with inflation so low? Well perhaps partly because inflation is not so low, compared to earings growth it is only 0.5% above RPI. Except that we do not use RPI anymore as during the preparations for joining the Euro the Bank of England switched to CPI, which shows there a clear 1.3% gap of earnings growth over inflation. It could also be very well to do with the fact that people are bing taxed to till the pips squeak.

The latest taxes pretend to be about helping the enviroment. Except that they aren't actually for that at all, such as the return of the ever increasing fuelu taxes. Fuel Duty is a very good enviromental tax since it specifically targets the problem, CO2, and nothing else. Burn more fuel, preduce more carbon, pay more tax. But if it where being used as an enviromental tax it should be priced at the cost of said carbon, internalising the externality, which would be 3.95p per litre. Government also wants increased road tax, despite all the enviromental impact of a car journey having already been priced into it thanks to Fuel Duty. Plus lower speed limits rigerously enforced, a code for more revenue robots making the roads less safe.

I know my largest expense, and it's tax. Yet the government still wants yet more taxes. Just a little more money and it will make all the difference to public services they whine, despite the money that they have been hosing the public sector down with having made no difference what so ever to services. If I had just a little more money it would also make a difference, I could look in the mirror and not count my ribs.


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