Open University Idiot’s Guide to Politics Session 3 - Taxation

Another in Professor Baron's occasional series in sociopolitical commentary.

So, tax yes, not much of a chortle on this one but I feel quite strongly about tax to tell the truth so I thought I'd share my convictions with you. Hell, it'll be a change from counting sheep for you!

Now if one accepts the necessity for an over-arching state then one must in turn accept the concept of it needing to raise money. This can be done in a couple of obvious ways.

The most obvious is taxation, a series of levies based around a tariff constant whereby the State effectively takes a cut of an existing transaction. The profit element for the state is 100% in cases where it is not having to provide the infrastructure for the transaction to take place but that is generally only the case within private industry and since I don’t believe private industry is a good idea we’ll leave one aside. So where the state has provided the infrastructure or is at least bound to it there will be a degree of overhead. Take the Inland Revenue for example, the myriad offices and tax collectors etc.

Another form of revenue is for the state to make money from the services that it provides, ie charges based on the usage of those services, be that fares on public transport and such like or a charge for the use of public utilities. Many people on the right-wing feel that the State should have levying powers on all services such as hospitals etc. It is important here to define services because the provision of hospital treatment is rather different to that of say a train system or electricity. One does not expect the amount of usage of a hospital to be charged the way say one might be for electricity or for traveling on the bus.

Now when it comes to taxation this is always going to have a degree of unpopularity because ideally people would like as much money to live off as they can. However it would not be true to say that people will never like tax. If a taxation system is managed correctly and open and accountable there is no reason why people will not accept it as part of daily life. The problems come when the system is poorly managed and either closed to scrutiny or so complex as to require a specialist qualification to understand it.

Taxation must be taken on an ability to pay basis, there is no point trying to extort money from someone who does not have the means to pay, the revenue is not forthcoming and money spent on recovery etc. is throwing good after bad. If a tax is taken proportionally this provides no basis for accusations of imbalance. Thus the percentage system is the only fair way to do so.

I am aware that there are people who do not believe in the concept of from each according to his ability to each according to his needs. These are people who see that what they have attained as being a direct result of their own hard work and they resent the fruits of their labours benefitting somebody else that they deem may not be as deserving as they. This fails to take into account that the people that have done well as a result of the system have often done so at the expense of many others whether directly or indirectly. To benefit from an iniquitous system and not seek to change it is to offer compliance however tacit. The current system is not a fair one and therefore there are many factors which go into who succeeds and who does not. A person subjected to prejudice because of creed, colour, appearance or gender will not have the same opportunities regardless of whether they work as hard as one not subject to the same restrictions, it is therefore a smokescreen to suggest that success in our current environment is directly proportionate to output. Thus by the same token it is right and proper that those who happen to be on the right side of such a system should be made to subsidise the services for those who are less able to fund them. This creates a society whereby everybody should at least be able to live with comparative dignity and not have to worry about the provision for basic services such as healthcare, education, pensions, transportation etc.

Personally I agree wholeheatedly with the concept of a higher rate of tax for the more well-off. I believe that there should be a study carried out into how much is necessary for adaquate survival, based on circumstance like size of family etc. and those earning above that threshold will pay a gradually increasing percentage of tax. It may seem punitive that someone earning £30,000 is taxed at 40% whilst someone earning far more is taxed at 80% but if you look at it pragmatically the person earning £30k ends up with £18k net whilst someone earning £150,000 would even on an 80% tax rate still end up with £30k net. This would however go a long way to reducing the gap between the very rich and the vast majority of society as well as raising huge amounts of revenue for the Treasury. Put in context Britain would not have an insurmountable pensions crisis if a proper higher rate of tax was implemented.

The question is, is this a disincentive? Well, in the current system yes it is because we have been brought up of late to believe that we not only can but also should be able to have everything. People resent encroaching on what they perceive as being their "rights" and yet they do not expect to back these rights up by living up to their responsibilities. If people are brought up to believe that it is just as important for them to fill their roles in society and contribute to the good of the whole and not just the individual then it would be a more natural progression to recognise the need for a tax gradient.

Song Of The Day ~ Kenickie - Acetone