Gold Price Prediction Puts Spotlight on Brown

A leading gold bullion trader predicts that gold could rise to $2,000 per ounce by the end of next year. Tom Fitzpatrick who is the chief technical strategist for Citigroup says the wave of liquidity being poured into the global economy will see a flight to gold. The current price is $812 per ounce. UK Prime Minister Gordon Brown is famous for selling half of the UK's gold reserves between 1998-2000 at the bottom of the market. The Treasury secured an average price of $275 per ounce. So much for our leader's financial expertise.

The Great Labour Rip-Off

Welcome to the land of the Great Labour Rip-Off. Yes, we're finally getting the socialist tax regime we deserve. After 11 years of pretending they were business and entrepreneur friendly we are now getting the traditional Labour tax treatment.

For those who haven't fully digested yesterday's news, presented by Alistair Darling as an answer to the recession, many sections of the population are heading for a 60% plus rate of marginal tax.

Changes to National Insurance (NIC), tax thresholds and the imposition of 45% top rate of tax, will mean people at both ends of the income spectrum will have see less than 40p from each additional £ they earn. This is Scandinavian levels of taxation without the Scandinavian level of public services. I know, I used to live there.

During the early 1990s I was a higher earner living in Denmark, which had a top tax rate of 62%. Interestingly, this top rate included local income which was effectively the rates - now council tax. On top of this all my mortgage interest (and any other loan interest) was tax deductible. Secondly as a family, we claimed £120 per month per child in family allowance. When all the calculations were made my effective taxation rate was less than 30% of total income - and I was earning £65k a year in 1992, equivalent to say £150k now.

When everything was weighed up I was paying about the same net level of tax as I would have done under the then UK regime of John Major. But living in Denmark meant a World Class health system, clean streets and low crime. Soon, in Gordon Brown's socialist dystopia, you will have marginal tax rates of over 60%, with council tax, water rates, prescription charges, parking charges at your local hospital combined with third world levels of public services. How have we got here?

Denis MacShane MP Calls for Tax Cuts

In today's Telegraph, Labour MP Denis MacShane calls on Gordon Brown to cut taxes.

Here is a direct quote from MacShane's article.

Any prime minister in office today would feel the voters' anger as they see their cherished plans to spend their own money as they see fit destroyed by rising prices combined with the insatiable greed of the state in all its manifestations to take the people's money for its own, often incompetent and counter-productive ends.

I particularly like the reference to "insatiable greed". Denis MacShane, the MP for Rotherham is acutely aware that the real backlash against Brown is that he is obsessed with tax and spend. Brown is an unreconstructed socialist obsessed with destroying the middle classes ability to become independent of his client state. To problem now though, as MacShane observes, is the way the tax burden has risen for those on average incomes. It is these people that are deserting Labour in their droves.

The 10p Tax Problem

Did Gordon Brown blunder when he did away with the 10p bottom rate of income tax? Writing in the Financial Times, economist John Kay explains the maths behind the self-inflicted problem currently tearing apart the Labour party. Kay has worked out the income levels at which people lose and when they gain.

It seems to me, that the biggest mistake Brown made, was not to come clean on the fact that there would be a large number of losers. What seems ludicrous is that the losers are amongst UK society's poorest and most vulnerable people who appear to suffering a rate of inflation much higher than the population at large. Hubris.

Storm clouds gather for Tax of Mass Disaffection

How Gordon Brown must wish there was no such thing as televison. Yesterday's TV news shows ran footage from last year's budget when Brown was still Chancellor of the Exchequer. The clips show Brown commending the budget as a "Tax cutting" budget and making much of the cut in the basic rate of income tax from 22p to 20p in the pound. Interestingly, Brown failed to mention the total withdrawal of the lowest £1,500 band taxed at 10p in the pound. This was only mentioned in the small print of the budget document. The removal of this band has meant that up to 5.3 million people - all of them low paid - will now pay more tax than if the 10p band and the 22p basic rate had remained. This week, those low paid workers will see the full cost of this in their monthly pay packets.

Brown's dishonesty will cost him dear. The tax of mass disaffection is stirring up a rebellion amongst Labour MPs and Councillors. On 1st May, many of the country's voters go to the polls in local government elections. Don't expect the low paid to give Gordon Brown a vote of confidence.