Cutting the deficit

The Dave and Nick partnership has had a good start; but it sounds as if they are about to make their first mistake.
Raising Capital Gains Tax will not hit the wealthy, but it will punish small investors, who have had a pretty torrid time. Savers, often the elderly, have been the real victims of the banking crisis. Interest rates have been at half a percent for about two years; inflation is at around four per cent, so their capital is eroding. The only way to make any income is to invest in shares, in the hope of making a capital gain. Now the government is signalling that capital gains tax is going to be raised to 40%. They may also drastically cut the annual tax free allowance.
The coalition should focus on cutting public expenditure, not raising taxes. Over the past thirteen years the public sector has had a bonanza. Civil servants have had big salary increases and the number of employees has risen dramatically. In spite of all this extra money, productivity has decreased; billions are wasted on quangos and bureaucracy.