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Anorak | So the Economy’s Screwed: So Whatta We Gonna Do?

So the Economy’s Screwed: So Whatta We Gonna Do?

by | 26th, July 2011

WE’VE seen the GDP figures, they show 0.2% growth over the past 3 months. When we tot up the last 9 months, we still get 0.2% growth. This means we’re not getting richer very quickly.

So, what are we going to do about this?

Well, why not look at some places that are doing well? Like, just to make my point, Denmark and Switzerland? And note that this isn’t about what interest rates should be, which political party gets to be top dog, this is about what sort of structure seems to work in the real world?

It’s surprise some to find out that the national income tax rate in Denmark is 3.76%. The top rate is 15%. Yes, Denmark is a high tax country but the majority of tax is set, raised and spent at the level of the commune: a level which can be as small as 10,000 people. Local taxes for local people. Or Switzerland:

Indeed, in overall state expenditure in Switzerland, the Communes, the lowest level of government, account for 30% of autonomous expenditure, whilst the Cantons have 40% and the Swiss State only commands 30% of total spend. Nor is this just a sharing of a State-determined tax pot; the Communes have the competence to determine property and income taxes, which account for fully a third of the total national tax-take, a power which makes them an equal player with both the State and the Cantons. In the UK the position is centralist beyond belief; only Council Tax, at about £25bn annually, is levied and collected locally. The remaining 95% of taxes are determined and collected centrally, and given that local councils are prevented by law from setting the Council Tax they want, rather than the level set by Whitehall, it’s also true to say that 100% of UK taxes are determined centrally.

I’m perhaps willing to agree that it’s not entirely the stupidity of channelling all the tax money in the country through one office in London which is the cause of every single one of the UK’s problems: but I’d argue that it is one of the problems which leads to some of our problems.

Just let the localities raise the money they need to run those localities and tell the Man in Whitehall to bugger off. It may or may not be what makes the Danes and the Swiss rich but it’s certainly the system they use and they are rich so maybe there’s something to it?



Posted: 26th, July 2011 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink