måndag 20 november 2006

Full marks to a government department for once

I sent in my tax return using the on-line submission facility. This is a well thought-out system and easier than filling in the bundle of paper forms they send out. And it will do the calculation right up to the end of January deadline, instead of you having to send it in by 30 September.

Highly recommended. Give it a try instead of paying an accountant to do a job when you have to do most of the book-keeping work yourself anyway.

That said, there is no excuse for taxing people's labour. It is unnecessary, complicated, discourages people from working, is a cause of the problems resulting from having 85% of the population living in one-third of the land area of the country. One can go on and on. The reality is the tax is not paid by employees - that is just an illusion. It is in reality paid by employers.

To put some figures on this. A nominal wage of £25000 costs an employer £27560, and provides an employee with a real wage - the net value of what people can actually buy with their money - of £13800.

This is a huge incentive to get rid of labour, so jobs don't get done, or they get done by machines, often less well, or the work gets sent off to be done in places like Thailand. All of which helps to maintain our army of unemployed.

It also means that almost half of all government expenditure, for example, on the NHS, is actually tax which employees never see but is collected straight back, but not before a lot of time and money has been wasted in administration.

Not a clever system. What a pity that the energy that has gone into getting this bad system to run had not been put into devising a better one.

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