Taxing Times for Hughes

Simon Hughes, now the favourite to be the LibDem's next leader, is ready to ditch the 50% tax rate policy that formed part of his party's last manifesto. "Hughes's dramatic move towards the Lib Dem 'modernisers' came in an interview with The Observer". We've come a long way from Denis Healey's 1970s threat to 'squeeze the rich until the pips squeak' when he was, or was about to become, Chancellor of the Exchequer. It all seemed so obvious then, the state needed to spend more and taxing high earners seemed the obvious way to raise the cash.

But now there is a broad consensus amongst economists and (sometimes reluctantly) politicians that high rates of income tax really do slow down the economy. Only the loony tunes parties in the UK now favour high rates of income tax. Oh dear, another certainty of my youth has bitten the dust. Another triumph for political reality over political theory......