Clive Crook, in the FT observes just far left Obama is pushing the US . With grim foreboding I notice how his dilemma (ambitions but no money ), mirrors New Labour’s in 97 . Blair's problem was a pledge to stick to Tory spending plans . For Obama its his undertaking to raise income taxes “by not one cent” for almost all Americans.
Squeezing the rich cannot plug the hole . To précis Mr. Crook ,the US income tax system is already ultra progressive (OECD study). It collects 45 per cent of its revenues from the highest-income decile. Compare that with Britain at 39 per cent, Canada at 36 per cent, France at 28 per cent, Sweden at 27 per cent and an OECD average of 32 per cent ….The fact that the US has no broadly based sales tax makes Europe’s overall tax codes less progressive still .Crook thinks Obama needs a Sales tax but that aint what he promised .
New Labour squared the circle of political debt and spending strictures by lying .Brown ‘shook up the world’ with his titanic announcement on new Health money ..
“Under the previous government the increase for the past three years was £7 billion I am announcing an increase in health service funding of £21 billion …..“( GB 14.8.98)
“..“The Gord Giveth ” howled the Mirror . .. Labour wept with joy , how did he do it ? Nowadays we would guess ,but back then it fooled everyone...
Actually spending was to rise by annual stages from £37 billion in 1988/9 to £46 billion in 2001/2 which is £9 billion per annum to you and I .He invented £21billion by adding in the extra three billion for 99/2000 an extra £6 billion for £2001/2 and the £9 billion for the year after that to get £18 billion . The extra £3 billion was Scotland Wales and N Ireland money bunged in out of context.
Even these figures were bogus . The IFS calculated that spending on health increased by 3.6% a year over five years . Under Major it had been 2.5%. Its more ,true , about £2.3 billion more over the lifetime of the Parliament ,or about 10% of the figure Gordon Brown announced .
The same techniques , using multi year figures in a one year context , were used at the G20 .One wonders what Obama learnt by his proximity to V oldermort .It was Brown after all that schooled Blair in the dark arts not visa versa… .God help America and if Obama goes Browny ; god help us all.