And Happy New Year to You...

Well, that's it. Just been told by a contact that the Inland Revenue is not negotiating on tax payments for businesses and the self employed. Pay up now or that's it. 'Course they aren't. One, Brown has run out of our money and two, someone has to pay the IR staff. After all they don't pay any income tax themselves, do they?

Income tax is a terrible thing. It was foist upon as as a con job by a long past government probably to pay for a war on the basis that it would only apply to the 'rich'. But of course once out there the temptation of politicians to creep downwards with the limits was all too tempting until we now have the situation that even someone on minimum wage pays income tax. (Note. I do not support the idea of a minimum wage.)

And as far as State jobsworths is concerned it is just part of the mad money go round of the bureaucratic state. Since, as PAYE, income tax is a tax on employment it is the IR - part of HMG - that pays the employees tax, not the employee. And just where did the IR (or HMG) get the money to pay its employees? Yup, from the workers adding real value in the real economy. So the IR collects money from us, pays some of it to their employees and keeps back the rest. In other words it is just a saving on the employment cost of the state employee, as opposed to a cost for all of us private business employers. On top of that the profligacy of their pension benefits, at a cost of between 20% to 30% of salary roll means that this saving to us, wealth creators, is simply swallowed up in funding (or not fully funding) extremely generous pensions to state employees.

This mad money go round exposes the inequity of income tax. One, no state employee pays it. And two, it is a destroyer of employment in the non government employment sector - private business. On top of my New Year wish list is the announcement that one or other party recognises the massive unfairness and destructive nature of Income tax and will make an absolute commitment to abolish it by a certain time, say five years hence.

A first step is the introduction of a flat tax at a rate of about 20% starting at a higher threshold of about £15,000.

It won't happen. Will it?