A taxpayer writes
IN THE trough of a recession, we need higher tax rates about as much as we need higher interest rates, which is about as much as a moose needs a hat-rack. That is a respectable objection to Labour's plan for raising tax rates by as much as 471/2 per cent, and far be it from me to argue from self-interest. (50 per cent income tax and 9 per cent National Insurance would mean a top marginal rate of 59p in the pound against today's 40p.) The Chancellor,
though, when not posing for pictures with posters of bombshells, might usefully ask what this means for the taxes on savings. Does John Smith agree with Nigel Lawson that income and capital gains should be taxed in the same way, at the same rate? Does Norman Lamont? Mr Smith has been calling for investment and more invest- ment, which must come from savings and more savings — but not if they are taxed and more taxed.
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