What's the catch?

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A survey was published last week showing that voters want income tax cuts to help with the cost of living crisis. Shorn of context, that’s hardly a surprise. To the bald question, “Would you like more money?”, “Yes, please” is a wholly rational response. As far as I can see, though, people weren’t asked about how that should be funded. There is, as has been pointed out many times here, no necessary direct relationship between tax raised and government expenditure, but since both Tory and Labour claim that there is and will act on that basis, it’s reasonable to ask how they would fund it.

If the people getting the ‘extra’ money in their pockets found that they were also expected to pay more for school stationery and materials, or that NHS dentistry became even harder to access, or that cash-strapped councils would raise parking charges to try and balance their books, or that people would have to pay for their own bin bags in future, (add to the list as you will: all of these reflect what is currently happening in various places) would they still want that ‘extra’ money in their pockets? Because a tax cut only leaves people with more money to the extent to which they don’t then have to pay for things which were previously being paid for out of that taxation.

It's regressively selective as well. Those receiving the biggest benefit from any tax cut and those facing the biggest increase in expenditure as a result of cuts in services or higher prices for those services aren’t the same people. And those most in need are the ones who are most likely to find out that the cost of that tax cut outweighs the benefits, whilst the most well-off bank the cash. “Yes, please”, is an entirely rational and reasonable response to the question, “Would you like a tax cut?”, but a more appropriate response would be “What’s the catch?”. It’s a question to which you will not find an answer in a survey designed to show that tax cuts are popular. And increasingly it appears that the colour of the rosette doesn’t tell you which ones are selling the snake oil.