Here’s a sobering thought. If you are due to pay 50% income-tax in the new tax year, do not be fooled: it will come closer to 80% when you add on a few mandatory extras such as the full 17.5% VAT on most of your spending coupled with the 12.8% National Insurance paid by your employer on your behalf. (I have ignored a few allowances – but also the ‘stealth taxes’ pulling back on the other side such as Stamp Duty, Airport Tax, Car Tax, Tax on fuel … it just goes on and on.)
Think about this number for a moment. It means that for 80% of the year you will be working hard for the state and 20% for you and your family plus any philanthropic causes you contribute to. This means you will be working from the 1st of January to the end of September for the State. It won’t be until towards the end of September in to October, November and December that you will truly be working for yourself in any sense.
This is a subtle and pernicious form of modern day slavery, for sure.
Alistair Darling, our hapless Chancellor, tells us that those with the biggest and broadest shoulders should share the largest burden of funding the deficit that his Government – and only his Government – have created over the last ten years.
I am reminded of Ayn Rand’s great novel published in ……. Atlas Shrugged, Part 3, Chapter 7. Here is John Galt speaking:
If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down on his shoulders — what would you tell him to do? To Shrug.
Ayn Rand’s prophetic warning – that it is the businessmen of the world who create the wealth in the first place, which allows what a ‘statist’ like Darling wishes to do to advance his Party’s vision of social progress – will, one day, if pushed far enough, cause this country’s wealth creators to just shrug their shoulders and move on and away. At worst, what will be left is a society bereft of those who actually make money – or such a diminishing pool that the state will implode, consuming itself to death with no new wealth to replenish it.
In Capitalism: The Unknown Ideal, Rand reminds us:
Businessmen are the one group that distinguishes capitalism and the American way of life from the totalitarian statism that is swallowing the rest of the world. All the other social groups – workers, farmers, professional men, scientists, soldiers – exist under dictatorships, even though they exist in chains, in terror, in misery, and in progressive self-destruction. But there is no such group as businessmen under a dictatorship. Their place is taken by armed thugs: by bureaucrats and commissars. Businessmen are the symbol of a free society – the symbol of America.
Well, the UK State has run out of money. It will borrow £200 billion next year to pay its ever-ballooning payroll. Meanwhile we, here in the UK, are relying on the good will of our lenders to bankroll our state workers on a week-by-week basis. Yes, the UK is existing on a hand to mouth basis only. This is what it means to have a £200 billion deficit to fund. The government takes £4 in tax and spend £5 on its programs. It does not have the political courage to take immediate efforts to make this £4 in and £4 out, as any prudent family must budget.
When human beings began to peacefully exchange goods and services, civilised society was created. Money is the medium that facilitates this exchange to our satisfaction. Society, and its closely associated derivative, money, which facilitates peaceful exchange, is arguably the greatest invention of mankind. All other things flow from the basic functions of exchange being enabled to be fulfilled: it is, quite simply, this that has lifted us up from primitive existence. We should be glorifying those, like Ayn Rand’s fictional John Galt, who – far from being labelled fat cats – are a shining beacon of hope in desperate times. Rand goes further:
“So you think that money is the root of all evil?” [leaving it aside that this is a common misquote: St Paul suggests that the love of money is the root of evil, a distinction lost to those who damn the rich out of hand.] “Have you ever asked what is the root of money?” continues Rand. “Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?
“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns–or dollars. Take your choice–there is no other.”
A modern day John Galt is none other than Michael Spencer, who I have the good fortune of knowing. He is the billionaire founder of ICAP, the largest inter deal broker on the planet. He employs 4,500 people, transacts £1.4 trillion of trades per day, has 50 offices world wide. His charity day at the office raises half of he total amount that the whole BBC Children in Need raises. Glory to the forces of free market capitalism, that most potent wealth creating force known to mankind.
Michael Spencer was interviewed by the Daily Telegraph on the 5th of December and said: “If the Conservatives are not elected and if Labour continue to increase taxes as they probably will then, regrettably, we would presumably have to reconsider moving domicile.”
The prospect of working 80% of the year for the State, like the Titan Atlas holding up the world is becoming too much for the likes of Spencer. We are approaching the tipping point. We need our Spencers and the whole army of entrepreneurs more so now then ever to create the wealth to get us out of the Labour Party induced mess we are in today.