Rachel Reeves is damned if she raises income tax in the budget and damned if she doesn't | Martin Kettle

"Income tax is key to the public finances and to the redistribution of wealth by the state. It will always be the principal embodiment of Oliver Wendell Holmes junior's totemic dictum that taxes are the price we pay for a civilised society. But no chancellor has raised the income tax base rate since Labour's Denis Healey raised it from 33% to 35% in 1975 (he then cut the rate in 1977 and 1978, but we don't hear so much about that)."

"That 50-year arc is no historic accident. The past five decades have been the Margaret Thatcher-defined years of lower personal taxes, privatisation and state cutting. In those years, income tax has become totemic in another way, as the embodiment of the possessive individualism unleashed by the state's tactical withdrawal from the work of civilisation strengthening and nation sustaining. Today, the base rate is 20%."

These weeks are pivotal because the 26 November budget could represent a decisive departure from long-standing low-tax orthodoxy. Income tax sits at the heart of public finances and wealth redistribution, having not seen a base-rate rise since 1975. The past fifty years have been shaped by lower personal taxes, privatisation and state retrenchment, leaving a 20% base rate linked to broader social and economic strains. A substantive rise in income tax would provoke fierce political and media conflict and could alter party dynamics and policy priorities for years ahead.

Read at www.theguardian.com