a footnote on tax collection

Just a footnote on my report of the conversation with Mike Frear and in response to James' comments.

Mike Frear said, and quite correctly, that tax aversion is partly the result of public disquiet over how government spends the money. If it is going to 'benefit spongers' or dubious foreign military adventures etc., it is hardly surprising that they are reluctant to give hard earned money to policicians who 'waste' it. I did point out to Mr Frear that, the problem would clearly be solved under a Conservative Government and was delighted to see a gleam in his eye and a suspicion of scepticism.

Seriously I think there are two points to be made. The first is that, yes, there must be greater public confidence that their taxes are being 'well spent' and welfare reform - real welfare reform, not the rhetoric but little action under Labour - is the best place to start. The second is this. neo liberals, libertarians, T Party people etc. argue that the free market always uses resources more efficiently than government. There is an interesting argument to be had, but I think of this in a different way. If, for example, a premier league footballer earning £5 million a year avoids most of his income tax, what does he typically spend his extra money on ? From what I have heard and read, these guys typically spend it on various forms of conspicuous consumption of no intrinsic value. A certain British retailer who avoids tax through his wife's tax haven status has famously wasted vast amounts of money on lavish parties, over-paying celebrities to perform for him, vulgar yachts and the like. Is this money, spent in the free market, being put to any good use? 'Efficient' perhaps, but 'good' ? Well, employment is created maybe, but largely abroad and not particularly sustainable. I think, if I were in government, I could find better ways of spending a footballer's £million pound tax avoidance windfall than he himself can. One Portuguese star, I heard, bought two identical Ferraris on the basis that he was bound to crash one before long - which he did. I think he crashed them both actually.

I should be fair and report another of Mike Frear's comments which has some validity. I argue that the tax we pay forms part of our relationship with the state and should therefore be in the public domain, as are the wages of public sector employees (note the forthcoming publication of BBC salaries). He pointed out that the relationship was not a voluntary one, and he is certainly right, so there is ineded a civil liberties issue at stake in my idea of making our tax contributions available to all. . I would still argue, however, that the 'greater good' here is more important than the privacy issue. I repeat I would like to see a change in the culture regarding tax where we see it as our proud contribution rather than some kind of punishment.




http://www.hoddereducation.co.uk/Colleges/Government---Politics.aspx?mRef=CNM01.