TAXONOMICS

I lived in San Francisco in the late 1980s. On my first evening in the city, I checked out my new neighbourhood bar. Two things remain with me about that evening. The first was that the barman greeted me by name  (it’s a small world – I had worked with him in the civil service in Ireland some years earlier); the other was something a female bar tender said.

A debate was raging between the female bartender and a number of regulars at the opposite end of the bar.  I don’t know what they debated but she was clearly coming second.  Then she said, loudly:  “Screw you. I pay my taxes.”  At that point, the debate stopped and the customers raised their glasses and acknowledged her place in the world. Playing your part by paying your tax is a matter of both personal pride and national citizenry for Americans.

Compare that to the UK where the wealthiest, we’re led to believe, do everything possible to minimise their tax liability. Guilty or not, they have been roundly demonised as a group in recent months.  At the same time, the Government likes to make a hullabaloo of reminding us that since coming to power they’ve taken millions of people ‘out of tax’.

A symbol of a bloated government overhead funded by excessive taxation?

Tax has become an emotive issue. It’s not, as David Cameron naïvely suggested recently, a moral issue (only the shortest of short-sighted politicians would raise morality as an issue).  When you make or are responsible for bad rules, and you’re unhappy because people followed those rules, best to turn the accusatory finger away from the law-abiding and back at yourself.  But there are two big issues for me on tax.

A country has surely lost all balance when anyone is required to pay more than half of what they earn to fund the state overhead.  Interest declared – I am a higher rate taxpayer.  But punitive rates of taxation exist only to fund a government that has grown obese and inefficient. That overhead is suffocating and is the single most important motivation to avoid tax.

Secondly, raising the tax threshold to remove the lowest paid from an income tax liability both misses the key issue (low pay and part time work) and denies those people the ability to make their contribution, to play their part and pay their way.

The UK Government spent more than it collected in 27 of the last 33 years and the country’s net debt is more than £1000 billion, £2300 billion when you include promises against further banking failures. As a taxpayer, my name and yours are included as guarantors on that liability.

That’s like someone on £30,000 a year driving a Porsche and keeping a Range Rover in the garage for rainy days, taking four holidays (one of them a cruise) a year, doing their weekly shopping at Harrods, buying champagne for every stranger they meet in a bar and having a little cottage in the country for weekends.

Surely it’s time for a proper national debate about the kind of country we want to live in and the nature of the government overhead we need?  The Internet is now available to practically everyone and would allow the debate to be held quickly, cheaply and regularly. I’d vote for a party that arranged this because it would suggest he or she understood that they work on my behalf and in my best interests, not the other way around.

Share