Through hard work, a well delivered message and sheer determination, Lady Thatcher would push through her policies of individual liberty through a massive turn towards privatization, a tax rate reduction, as well as the promotion of her version of an "ownership society."
Let's look at the massive privatization of many UK state owned enterprises. Instead of continuing to support various businesses that had become fat and lazy by their continued dependence on the treasury draining dole, PM Thatcher's government would enact their policy of massive privatization to relieve the problem. During her tenure from 1979 to 1990, Lady Thatcher would privatize enterprises like British Petroleum (79), British Aerospace (Feb. 81), Cable & Wireless (Nov. 81), Amersham International (82), National Freight Company (82), Britoil (83), British Ports (83), 27 railway hotels (83-84), Jaguar Cars (84), British Telecom (84), British Gas (86), Vickers shipyards (86), Rover (86), The National Bus Company (86 - split into smaller companies), Airports (86), Rolls-Royce (87), British water industry (1989) thus forcing them to compete in the marketplace which made them even better and less burdensome on the UK economy. So Mrs. Thatcher would sock the ravenous beast of British socialism across the nose causing it to flee with shock into the woods.
Along with cutting these industries and businesses from the leash of the government, Lady Thatcher would also spread this spirit of liberty to the British people thus bringing to life Adam Smith's much talked about "animal spirits." To launch this groundswell, Thatcher followed the sage advice of F.A. Hayek, Milton Friedman and other "classical liberals" who argued that if you lowered taxes to a certain level then people would be able to make more money and increase the tax money coming into the government. (Now I'd agree that Hayek and Friedman would prefer a low Flat Tax but you get my point.) With this at hand, Mrs. Thatcher turned her policies towards the burdensome and socialist styled tax system and slowly but surely chopped away at the tax system from 1979 to 1990. Just look at the numbers provided by the HM Revenue & Customs office (UK version of IRS) on the 1978-1978 tax rates when she took over and the rates when she left office in 1990.
| 1978-79 | ||
| Bands of taxable income(1) £ | Rate of tax % | |
| Reduced Rate | Up to 750 | 25 |
| Basic Rate | 750 - 8,000 | 33 |
| Higher Rate | 8,000 - 9,000 | 40 |
| 9,000 - 10,000 | 45 | |
| 10,000 - 11,000 | 50 | |
| 11,000 - 12,500 | 55 | |
| 12,500 - 14,000 | 60 | |
| 14,000 - 16,000 | 65 | |
| 16,000 - 18,500 | 70 | |
| 18,500 - 24,000 | 75 | |
| Over 24,000 | 83 |
| 1989-90 |
| Bands of taxable income(1) £ | Rate of tax % |
| Basic Rate | Up to 20,700 | 25 |
| HigherRate | Over 20,700 | 40 |
As you can see, the continued efforts by Lady Thatcher to simplify the tax code was a great success thus allowing the UK economy to grow in leaps and bounds beyond most economies within Europe and the West during the late 80 and well into the current year. This tax simplification also allowed the citizens of the UK to bring home more money in their paychecks and encouraged more private businesses to hire more people thus when she left her post 11 years later, the average salary had risen from a low of £5,427 in 1979 to an impressive £15,252 by 1990. Not only did this tax simplification provide the UK citizens more money to pay their bills and enjoy more consumer products it also allowed them more money to get in the ultimate sweepstakes which is the "ownership society". Through her keen observation and understanding that the ownership of one's home and possession of property is one of the most important factors in elevating people out of poverty and ensuring a better way of life, Mrs. Thatcher would fight tooth and nail in Parliament to take housing out of the privy of government and return it to the people. She achieved this by promoting the "right to buy" in which the various council tenants were given the option to buy their homes at a discount rate thus allowing millions of people to own their own homes. In fact when she left office, home ownership rate had jumped from 54% in 1979 to some 64% when she left in 1990. What's even better is that these efforts towards the ownership society on behalf of Thatcher's government would pay off for the folks who bought these homes would see the price of their investments triple during her time in office from an average of £19,000 in 1979 to £70,200. Thus demonstrating how powerful and uplifting her policies really were for the British Isles.
Check out the Foreign Policy section next week.
No comments:
Post a Comment