Stealth Taxes

Intro


Labour is traditionally seen as a tax and spend party, with high levels of income tax to finance high levels of public spending.
In the 1997 election campaign they attempted to combat this image through pledging not to raise income tax.
While this has been the case to this day, Labour have had to look to other means to raise finance. *Namely through indirect taxation, or so called stealth taxes.
Stealth taxation under Labour remains one of the few areas on the economy that they are seen to be weak in.




Tory Criticism
William Hague coined the term ‘Stealth Taxes’
He heavily criticised Labour for their deceptiveness, highlighting that the tax burden had significantly increased.
They claim the rise in indirect taxation would be equivalent to 16.5p increase on income tax.
The Conservatives say that if elected they would seek to reduce the tax burden on hard working middle and lower income families by raising the allowance for tax free earnings.
Crucially if the Tories can make stealth taxes an important issue, public confidence in the government may decrease.


NANNY STATE
People often feel that the government is taking too much control over their lives.
The taxes discriminate against certain lifestyle choices such as drinking, smoking and motoring.


EFFECT ON INDUSTRY
Some British industries are suffering the high levels of taxation, putting them at a disadvantage to EU neighbours.
Many people will go abroad to buy their cigarettes and alcohol.
The stealth taxes have acted as a disincentive to production.
Tories even claim it has led to smuggling of goods.


PUBLIC OPINION
The 2000 fuel protest was a very high profile demonstration of public discontent.
The media spotlight on the issue elevated it and made the public aware of it.
The protest caused so much of an uproar, that for the only time in Labours first term, the Tories were ahead of Labour in opinion polls.


HOUSE PRICES
Only recently have the thresholds for stamp duty been raised in line with the high value of the housing market.
This has resulted in government income from stamp duty more than trebling as first time buyers and middle income families are forced to pay high stamp duty on moderately priced homes.


REGRESSIVE
Lib Dems particularly criticise the taxes are regressive. Raising indirect taxation on alcohol, fuel and VAT affects the poorer classes more than the rich.
The economic inequality gap has widened under Labour, giving the impression they no longer care about the workers they once championed.
Raising indirect taxation is unpopular with the public since it is less obvious than raising income tax and has a daily affect for everyone.


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