Continuing from my earlier post, David Cameron is grappling with issues for his party that are eerily similar to what John Key has to deal with:
Second, the Tories set out to prove that they were not “the nasty party” by taxing “the rich”. In opposition this did not matter much, but high personal taxes are now undermining our capacity to set up businesses. The “doers and grafters” admired by Mr Cameron can’t put their own money into new ventures because the Government has taken it off them at source. A recent survey of business startups found that 88 per cent of the finance came from personal savings. In rival countries such as Germany, banks provide far more but in Britain they put in a meagre 12 per cent. This means that personal taxes have an especially harmful effect on the ability of people who would like to be “doers and grafters”. In a misguided attempt to prove they care about the poor the Government has hamstrung the very people who are capable of creating the prosperity that alone will diminish poverty.
