This is a good news, bad news story. The good news is that it appears the British Labor Party has been mugged by economic reality, and is abandoning its traditional far-left “soak the rich” policies. Maybe that’s because growth at less than 1% has been so anemic in Britain (and the Eurozone) that if present trends continue, the former Communist nation of Poland (which is growing at 3.6%) will be wealthier than Britain in 2030.
Rachel Reeves, who would likely become Treasury Secretary if Labor wins this year’s election, has just pledged she would not raise the 25% corporate tax rate and could even cut it ‘should our competitiveness come under threat’.
“This Labor Party sees profit not as something to be disdained but as a mark of business succeeding,” she told an economic conference this week. “I don’t see a route towards having more money for public services that is through taxing our way there. It is going to be through growing our way there.”
Labor has also promised not to institute a wealth tax, increase the top income tax rate above the current 45%, or reinstate a cap on bankers’ bonuses it once imposed. It even promises more homes by relaxing rules on building in the Green Belts that surround British cities.
Now for the bad news. The traditionally leftwing Labor Party is now to the right of the Biden Democrats in America. Biden has proposed raising almost every tax on the rich: the highest income tax rate, the corporate rate, the capital gains rate, and the dividend tax, while proposing a new wealth tax on unrealized capital gains.
It used to be a common charge that the Democrats had become as leftwing as the Labor Party in Britain and, sadly, today that’s a smear against the Labor Party.