Posted on 10/31/2007, 7:18:07 AM by bruinbirdman
Young people aged 18 to 34 are paying half their earnings in tax as they help fund the pension and health care costs of an ever more prosperous older generation, a highly critical new report says.
The study by the centre-Right think tank Reform argues that the "massive burdens" placed by Gordon Brown on today's "Ipod generation" means the instinct to innovate is being crushed at the start of young people's working lives.
Nick Bosanquet, consultant director of Reform and professor of health policy at Imperial College London, argues that the need to control government spending and protect young people from having to foot so much of the bill has become ''a defining modern political issue" and crucial to the long-term health of the economy.
The report is a severe embarrassment to the Prime Minister, who said when accepting the Labour leadership in June that his priority was to help "young people with talent and ambition wanting the best chance to realize their aspirations."
Instead Reform argues that much of government fiscal policy is doing the reverse.
It says that at a time when young people should feel motivated to innovate, the financial burden on them is soaring as a result of "near compulsory" student loans for tuition fees and pension contributions, income tax reforms which have left people on low salaries paying more, increasing national insurance contributions and rising council tax.
''The Ipod generation has been reduced to galley slaves in the public spending empire of the baby boomers," Mr Bosanquet says. "The Government is in the process of mortgaging the future of a generation."
Reform cites official figures showing that the UK government – for long seen as running an economy more lean and efficient than those of its continental partners – is now one of the highest spenders in Europe, even overtaking Germany with its notoriously bloated welfare system.
Next year government spending as a percentage of output will be 45.1 per cent, compared to 44.3 per cent in Germany. When Labour came to power in 1997, government spending was 41.6 per cent of GDP compared to 48.3 in Germany.
The report's authors are also implicitly critical of the Tory Party, which has followed Labour by promising to match government spending on health and education for the lifetime of the next parliament.
It suggests that politicians are cranking up public spending in order to buy votes at the ballot box, rather than planning for the health of an economy that will creak increasingly under the costs of a rapidly expanding elderly population.
Placing much of the blame at the door of Mr Brown and Alistair Darling, the Chancellor, it says many of the changes announced in this month's Comprehensive Spending Review (CSR) added to the difficulties young people face.
A decision in the CSR to cut the Capital Gains Tax payable on the profits of selling a second home had helped the wealthy rather than those trying to buy their first home, it said.
"The 2007 CSR should have enshrined a new, youth-orientated approach. Instead it presented measures to help the owners of second homes, and established a fiscal framework which will soon encroach upon young people's economic freedom," the report says.
The number of young people in the 18-to-29 age group being declared bankrupt had increased more rapidly than any other age group, it noted.
The solution lay partly in conquering ''youth apathy" and persuading young people to defend their interests at the ballot box by fighting for public spending curbs, tax cuts and more private contributions to healthcare and pensions.
''Perhaps the ultimate responsibility lies with the Ipod generation themselves", it suggested.
''Youth apathy has afforded politicians the chance to be complacent on these matters, allowing them to pamper the baby boomers who make up so much of the voting electorate.
''In the end, if young people want to see lower debts, fairer taxes, better education and greater opportunity, they should rise from their political slumber and make for the ballot boxes."
Reform director Andrew Haldenby said: ''The Government fails to face the facts: high taxation and high public spending impose massive burdens upon both young people and the economy.
''The rest of the world has outlined a better approach; an approach which will finally liberate the Ipod generation."
Among his recommendations are the introduction of a ''growth rule" to limit public spending to 35% of GDP within two Parliaments, the use of co-payments for healthcare, more parental choice in education and tax cuts such as raising the income tax threshold to £15,000.
If the young had any brains they’d vote out the Liberals and the Democrats. But I’m not seeing a whole lot of brains on either side of the Atlantic.
Make that Labor and the Democrats.
And under Hillary, we can be just like them!
Make that Socialists and Socialists.
yitbos
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