Tax cuts for the well off? That's a bit rich

Could there be a general election in the offing? Just as a first swallow or bronzed leaf denotes a coming change of season, so the tax-haters are stirring.

"The pips could hardly squeak any louder," bemoans the Daily Telegraph melodramatically, referring not to Britain's rich but to our middle classes. These impecunious victims of a "confiscatory" tax regime are apparently "overtaxed, overstretched and underpaid".

In the London Evening Standard - nowadays a Mini-Me of its sister paper the Daily Mail - the headlined lament "Broke every month" appears above a picture of two management consultants with a combined annual income of £80,000. The paper wails that inflation since 1997 - just to pick a year at random - has risen by 18%. (In letters a third of the size, you might decipher beneath that an average London salary has risen by almost 50% in the same period.)

And in the pages of the Mail on Sunday the somnolent beast that is Lord Rees-Mogg awakens, urging the Conservative party to focus on tax. As if in Pavlovian response, the government itself leaks promises of plans for "fewer carrots, more of the stick" in paying benefits to the long-term sick.

The leisured rich have often been mean. A newly published history of a country estate, The Big House, reveals that Venetia Cavendish-Bentinck, once chatelaine of Sledmere in Yorkshire, was so tight that she recycled unwanted milk from the cat's dish for her guests, bought bacon from the butcher on sale-or-return and preferred to entertain Catholics on Fridays because fish was cheaper than meat.

Friends of Prince Charles and Camilla Parker Bowles complain that the couple's "most drearily boring" subject of dinner conversation is "the price of everything nowadays". And the prince's mother, while occasionally bemoaning her son's extravagance, certainly doesn't throw money around. Staff at Sandringham each received a potted chrysanthemum from the Queen as a Christmas present some years ago. It came with a handwritten note saying: "When the plant dies, please return the pot to the head gardener."

A quaint aristocratic unwillingness to pay the tailor, the grocer or the domestics properly has elided understandably over the centuries into an equally quaint unwillingness to pay the taxman. Lloyd George might have believed that death was a "most convenient time to tax rich people", but it didn't stop Vita Sackville-West whingeing bitterly half a century ago that "the socialists" had stolen her ancestral home.

Knole - with its celebrated 365 rooms, 52 staircases and seven courtyards - had actually passed to the National Trust in lieu of inheritance tax. When I inquired this week, the Sackville-West family was still in residence "in part of the house". They are struggling by, we can only assume, on a few dozen rooms, a handful of staircases and perhaps just the one measly courtyard, a generosity not extended to most victims of repossession.

It was Lady Thatcher, with her most unaristocratic background, who triumphantly turned tax-cutting into a political fetish for the middle classes, successfully persuading them that they had never had it so bad. She boasts proudly in The Downing Street Years that cutting the top rate of income tax to 40% in 1988 was "a huge boost to incentives, particularly for those talented, internationally mobile people so essential to economic success".

But if lowering tax rates for high earners was quite so critical to economic growth, why was it a full nine years after Thatcher's arrival in Downing Street before she delivered them? And how on earth was she able to mastermind an "economic miracle" in the meantime?

We may be one of the five richest nations in the world but the Child Poverty Action Group confirms that in 2004, one in 10 pupils in Britain are deterred from eating school meals by the cost. Yet research regularly demonstrates that the poor give much more generously to charity than the rich.

Perhaps the government's coyness about arguing publicly for investment in tackling poverty comes from the centre. Shortly before his arrival at the heart of the Downing Street policy machine in 1997, Andrew Adonis wrote that: "rejecting postwar notions of social cohesion, by the late 1980s the professional and managerial elite was unapologetic about the explosion of income differentials". The sadness of Adonis's words is that no one seems to have been prepared since 1997 to point out politely to the "professional and managerial elite" that, in fact, they have never had it so good.

The fiscally dubious rot set in in the early 1980s. Swivel-eyed admirers of Milton Friedman, the monetarist who inspired both Reaganomics and Thatcherism, were seduced by a tax model of "sleepers" and "thrusters". Human nature, conservatives became convinced, meant that most individuals were "thrusters", motivated by lower taxes to work harder, rather than "sleepers", who merely take advantage of lower taxes to slacken off.

This tendentious claim has beguiled politicians ever since. In the past four years, George Bush has delivered almost $400bn of tax cuts for America's rich. Meanwhile, the legacy left to the children of the American poor is the biggest budget deficit in US history.

But sadly, alarm at Bush's divisiveness hasn't informed our political discourse. Even the Liberal Democrats, who bravely fought a string of elections with a pledge to put a penny on tax, yesterday quietly sidelined the promise.

Two decades after Friedman's ascendance, it seems now that it's only the rich who can be motivated to work harder by the prospect of greater wealth. And the poor? Requiring in contrast the threat of even greater poverty, they must be encouraged with "more of the stick".

The Staggers lurches along

Shed a tear for the staff of the New Statesman. They are reported to be "seething" after the engaging pundit and pointyhead Will Hutton noted that its weekly circulation is now exceeded by that of the eclectic young leftwing magazine Progress.

So what does the Staggers, once home to the writing of VS Pritchett, John Maynard Keynes and Virginia Woolf, have to offer readers this week? One columnist, apparently so good that she is trailed on the front cover, instructs female readers to "avoid men who drink chilled white wine".

If this is all redolent of legendary Sunday Express editor Sir John Junor, who once opined that "only poofs drink white wine", perhaps it's not surprising. The New Statesman's deputy editor Cristina Odone wrote a stirring piece six years ago marking equalisation of the age of consent at 16 for young gay people. "In vain," Odone moaned, "the moral minority condemned the 'paedophile's charter'."

As Junor liked to say, do pass the sickbag.