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Tax Credits – a lettter to my MP

October 28, 2015

Once again, I felt compelled (more specifically, I got a nagging email from 38 Degrees) to write to my MP about something. Here it is, for posterity. Particularly pleased with the use of “inveighing” and “awry”.

Dear Chris White,

As a constituent of yours, I would like to add my voice to the chorus of condemnation currently inveighing against George Osborne’s plans for cuts to tax credits. My objections to his cuts are as follows:

1) They are intended to reduce the deficit. I do not believe the deficit is a serious problem; or at least it is not something that needs to be solved right now. Maybe our national debt is higher than would be ideal, but it’s pretty low by historical standards (as a percentage of GDP) and I can’t say that it keeps me awake at night.

2) Most of the recent rise of the national debt is attributable to the economic calamity wrought by whizz-kids in the city when their elaborate gambling schemes went awry. It is an undeniable truth that the people who would be hurt by Osborne’s tax credit cuts are not the people who caused the bulk of the problem they are intended to solve. As far as I am aware, the architects of the disaster have survived completely unscathed. Certainly I doubt they’ve had cause to turn to food banks, though perhaps they had to endure a year of slightly lower bonuses.

3) Even if we accept the propositions that the deficit is a problem (and I don’t believe it is), and that it is morally reasonable to extract compensation for it from the poorest in society (which it certainly isn’t), that still leaves the question of whether it makes economic sense to cut the buying power of a couple of million people. I would never claim to be an economist, but I can appreciate the logic of Krugman’s oft-repeated observation that my spending is your income and your spending is my income. If a large number of people suddenly find themselves forced to spend less, a correspondingly large number of people will find themselves earning less (and paying less tax). I fail to see how this helps the economy to grow or the deficit to shrink.

In summary, the proposed cuts to tax credits seem both iniquitous and counter-productive. If the deficit must be reduced, Osborne should aim to achieve this through higher rates of tax levied on the economic group who caused the financial mess in the first place. I urge you therefore to oppose the cuts in tax credits if and when the matter comes up for a vote.

Yours sincerely,

P.S. My wife wishes to point out that you are currently in her bad books for voting against cutting VAT on sanitary products, and urges you respectfully to reconsider.

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