Fortsätt till huvudinnehåll

Only the little people pay tax

"Only the little people pay tax" was the phrase famously uttered by American millionaire Leona Helmsley when caught out for tax dodging. It was the title of a piece on the privileges enjoyed by the non-domiciled residents, written by Martin Wolf in the Finanical Times last Friday (7 March). In his view, their privileges are unjustified. What he failed to pick up was the possibility that is that there could be an underlying problem with the tax system itself. And nowhere in the course of the present debate on tax evasion and related issues has the point been made in any of the papers, neither in editorial comment nor in letters from readers.

Taxes are indeed a deterrent against whatever is taxed - windows, smoking, drinking, betting, etc. In some cases, that is their aim and purpose. But modern taxes fall primarily on work and enterprise, which cannot be right, since their effect is to impoverish. And they are levied primarily on people and companies, which is no longer practicable practicable, since people are mobile, companies are increasingly globalised and it is possible to transfer large sums of money between countries at the click of a mouse button. The consequence is that taxes that are supposedly based on "ability to pay" are, in practice, anything but. It really is in the nature of the system that "only the little people pay tax".

Low taxes are not the solution because goverment at both national and local level needs vast amounts of money to maintain the public realm to the standard a civilised nation can reasonably expect. Given that the present tax system has been shown yet again to be unfit for purpose, the only alternative is to levy taxes on entities that cannot move, such as real estate. Land cannot be hidden or demolished or removed to a tax haven. If taxes are tied to land titles, compliance is easily enforced; in the first instance, governments can make attachment orders on rental income, and as a last resort, titles can be forfeit in the event of non-payment.

If governments are losing tax revenue, the problem is self-inflicted, since practicable and politically acceptable solutions are available to any that are serious about dealing with the issue.

Kommentarer

Populära inlägg i den här bloggen

The dreadfulness of British governance

I wrote to my MP on two entirely separate issues recently. The first was to do with the replacement for the Inter City 125 train, which at £2.6 million per vehicle, is twice as expensive as it ought to be. The second concerned the benefits of a switch from business rate and Council Tax to a tax based on site values. In both cases, the replies were full of spurious, unsubstantiated assertions and completely flawed arguments. This is typical. You will not get an iota of sense from the government on any area of public policy at all - finance, economics, trade and employment, agriculture, housing, health, transport, energy. All junk. If you write to your MP you will invariably receive answers that are an insult to your intelligence, no matter what subject you are writing about. Of course they cannot understand statistics. They are innumerate. Whitehall is staffed with idiots with a high IQ. Look at their IT projects. And mind your purse, they will have that too.

How much more will the British tolerate?

The British are phlegmatic, tolerant and slow to rouse. Thus there was no great reaction after the terrorist attack in July 2005. The murder of Lee Rigby created a sense of outrage, but nothing more, since it appeared to be an isolated incident. Two serious incidents within a fortnight are another matter. Since the first major terrorist incident in 2001, authority has tried to persuade the public that Islam is a religion of peace, that these were isolated events, or the actions of deranged "lone wolves", having nothing to do with Islam, or to reassure that the chances of being killed in a terrorist attack were infinitesimally small. These assurances are are beginning to wear thin. They no longer convince. If government does not act effectively, people will take the law into their own hands. What, however, would effective action look like? What sort of effective action would not amount to rough justice for a lot of innocent people? Given the difficulties of keeping large n...

Battery trains fool’s gold

A piece by the railway news video Green Signals recently reported the fast charging trials for battery operated electric trains on the West Ealing to Greenford branch, in west London. In a comment under the video, I described the project as technological overkill, bearing in mind that before dieselisation in the 1960s it was worked by the tiny steam locomotives of the Great Western 1400 class, a 1932 design based on an 1870s design. The money that has been spent on the experiment would have paid for a small fleet of the old things. Elsewhere in the comments, I was critical of the 800 series trains. This produced a response from the makers of the video, as follows. “I may be grasping at straws here but I am guessing you don't like 8xx series trains all that much and rather wish we still had Kings, Castles and (for the branches) 14xx's. Fair? ” My reply was as follows... Yes you are grasping at straws. The model for long distance stock is the class 180, which is a 23 metre veh...