AN OUTSIDE VIEW

William Keegan has been writing for the Observer for too long. He is an unreconstructed Keynesian, which means that while he is very good at putting his finger on economic problems, he almost never has anything useful to say about what should be done about them. Today, he wrote a piece in support of the Liberal Democrats' proposal to fund local councils by means of a local income tax. Now, such taxes do exist elsewhere, so they are not completely impracticable. But the pages of technical papers like Computer Weekly report constant problems over computer software and large scale mistakes, and tax systems need to be simplified, not made more complicated. The tax system already costs about £25 billion a year to run, about 6% of what is collected, to say nothing of the £130 billion of lost production annually that results due to the way it kills off economic activity. The administrative problem is this. Most people work for an employer, who will have staff working in different local au...