Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Corporate tax is likely to be better than expected, thanks to higher profits, notably in the oil sector, where the drop in production is small compared to the increased oil prices. The oil tax windfall, on an oil production of about 1 billion barrels (and a similar volume of gas), is equal to several billion pounds, a not unsignificant amount.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Dec 5th, 2005 at 06:28:11 PM EST
Right.  And this is an important point.  Brown will probably be able to capture some extra revenue with the increased oil tax.  However, remember that the inelasticity of demand for oil means that companies can more easily dump the cost on consumers, which will dampen demand in other areas.

Now, this problem is less severe in Britain than in America, because Britain actually has a public transportation system (imagine that!), allowing for some more consumer choice.  So there are a few more alternatives.  What little public transport you find in the average American town or city is so pathetic in its inefficiency (at least in my experience) that such a tax inevitably falls on consumers, almost in whole.

The FTSE is still at a fairly high level, I believe -- up nearly one thousand points over the twelve-month period.  So, as you pointed out, tax revenues related to the corporate world and investment should be reasonably strong.  How long that may continue, I don't know.  The New York Times seemed to think that, even at such heights, there was still room for growth.  They tend to have decent economic analysis, in my experience, though not on par with The Economist or The Financial Times.

Britain may be on the front-end of a recession, or it may swing back into a strong expansion.  But with a relatively tight labor market, the odds of seeing growth rates comparable to those seen in previous years under Labour are not high.

One way or another, borrowing isn't outrageous in Britain, and its national debt is very low compared with other countries of similar development, so Brown has a little bit of breathing room.

I notice, reading the BBC's "Have Your Say" section, that the public seems to respond more to deficits than the American people -- a good sign, in my opinion.

I'm tempted to give Brown the benefit of the doubt, especially given the Tories as the alternative.  I have no trust in David Davis.  He's got no idea what he's talking about and his militant stances on Europe and taxes are more than a little frightening to me.  Cameron seems like a decent choice, especially given his more-liberal positions of economics and social/cultural issues, like drugs, but I don't know a lot about him, honestly.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Dec 5th, 2005 at 09:36:13 PM EST
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