Neither Labour nor the Tories should punish success

Telegraph View
John McDonnell wants to see the wealthy's tax returns. - © 2016 Bloomberg Finance LP

Despite their drubbing in the Copeland by‑election, Jeremy Corbyn and his socialist band are still running Labour. The latest silly idea to come from John McDonnell, the shadow chancellor, is that taxpayers earning at least £1 million a year should be forced to make their tax records public. He says that this can help tackle tax evasion and avoidance. It won’t. Tax evasion involves money that people do not put on their tax returns, so it would not be disclosed, while tax avoidance is legal and not secret.

Mr McDonnell might just as well have said that the rich should be forced to open up their houses to let curious members of the public inspect them.

Mr McDonnell also claims that publishing tax returns will help re-establish trust. On the contrary, it is designed to feed paranoid fears about the incomes of the powerful. This is old-fashioned class warfare. Why doesn’t Mr McDonnell follow the logic of his argument to its natural conclusion and say that everyone should disclose their tax returns – including trade union bosses and Left‑wing activists? The reason is that this policy is a swipe at those who work hard. It’s a punishment for success. Mr McDonnell might just as well have said that the rich should be forced to open up their houses to let curious members of the public inspect them.

This is a nakedly populist policy. Hopefully that does not mean the Tories end up stealing it, in the same way that they engaged in regrettable rhetorical attacks on business and high earners, borrowing some of Labour’s language in the hopes of stealing its voters. In fact, what voters are looking for is a party that understands how capitalism works and can manage the economy well. Experience shows that the best way to encourage growth and greater tax revenues is to cut tax rates. Wise leaders liberate wealth creators, not persecute them.

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