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John Rentoul

John Rentoul is chief political commentator for The Independent on Sunday, and visiting fellow at Queen Mary, University of London, where he teaches contemporary history. Previously he was chief leader writer for The Independent. He has written a biography of Tony Blair, whom he admired more at the end of his time in office than he did at the beginning.

"The Independent's must-read man" - Daniel Finkelstein

You can contact John in the comments area or email him at j.rentoul@independent.co.uk

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It's in the Bible: 50p tax is Satan's work

Posted by John Rentoul
  • Thursday, 30 April 2009 at 10:28 pm
I love Fraser Nelson because he reminds me that I am left wing really. (Peter Hitchens in The Mail on Sunday serves a similar purpose; yes, I know, disagreeing with either doesn't make me that left wing.)

Nelson, of The Spectator and News of the World, is high priest and arch theologian of the right-wing response to the 50p income tax rate, which is to say that it will actually cost the Exchequer money by stifling enterprise, encouraging avoidance and deterring effort.

It was rubbish when Andrew Neil was peddling it as editor of The Sunday Times in the 1980s and it is rubbish now. When Nigel Lawson abolished the 60 per cent rate in 1987, the proportion of tax raised from people paying the remaining higher rate, 40 per cent, increased. But this was because more people moved onto the 40 per cent rate. The threshold for the 40 per cent rate did not stay ahead of the rate of growth of earnings, so millions more people started paying it, more than compensating for the revenue loss from the tiny numbers that paid the old 60 per cent rate.

So when Nelson has a go at David Cameron for being "vague" about the 50p rate at his news conference this morning, it makes me feel young again. He even says: 

The idea that "high tax rates = lower tax yields" is  basic common sense, which can be traced back to the book of Deuteronomy if you want to go back far enough.

Nelson is normally robustly sane as well as ferociously right wing, so it is a joy to have him expose a looney-tune weakness. The Deuteronomy line is based on 14:22, "Thou shalt truly tithe all the increase of thy seed that the field bringeth forth year by year." This was described by Allister Heath, in Flat Tax: Towards a British Model (pdf), February 2006, as evidence of the Bible "endorsing a flat tax".

At this point, it is best just to tiptoe away.