Tuesday, 15 October 2013

Sorry Rob but paying tax doesn't give you "a stake in the system"


Robert Halfon is a breath of fresh Conservative air - prepared, from the left of the party, to say things that help us develop good policies that work for the broad majority of people. Above all, Robert has consistently reminded us that inflation and the cost of living matter more than anything else to those ever-remarked-on 'hardworking families'. Back in January, I quoted a Cullingworth local on the subject:

"It's all gone wrong - tits up, hasn't it" Says Lewis. In response to my request for clarity he continues, "the economy, the government. Everything has gone up, bread's like 50% more expensive and look at diesel. People can't afford stuff - come March there'll be a real mess. We've got to get prices down."

For too many people involved with government and with the advising of government this isn't the reality of their lives. They may vaguely notice how the weekly shop at Waitrose has gone up quite a few quid and they'll have spotted increases in the gas bill and the cost of insurance but this hasn't compromised their ability to eat out when they wish and afford a two-week holiday in Tuscany plus a winter trip to Chamonix for the skiing.

So Rob is right. But sometimes he falls into the elephant traps that await people who walk dangerously close to the prevailing metroliberal ideology:

There are two different choices: ensuring that everyone who earns the Minimum Wage pays no tax altogether, or by introducing the 10p tax on earnings up to £12,000. This would cost significantly less than raising the personal allowance, and is politically symbolic. It also allows people to pay into the ‘system’, meaning that they have a ‘stake’ in it. 

I hear the argument in that last sentence often from bien pensant social democrats. The idea that the funding of government is like some sort of grand insurance policy, a system into which we should pay so as to demonstrate we are good citizens. This attitude reinforces the myth - the lie, I would say - that society and the state are the same thing, that being an Englishman means you adhere to the foreign concept of an English State and that only by paying taxes are we a part of that society.

Taxation is merely the means by which the government pays for the things that government does. It is not a badge of citizenship, some sort of right of passage into the happy world of being British. No-one ever said; "hey look guys, I've arrived - I've got a tax bill!" The contributory principle referred to in reference to that most hideous of taxes, National Insurance, was always a con and remains a con. Not everyone contributes (including most of the beneficiaries of the systems the tax allegedly finances), it falls hardest on the poorest, it kills jobs and it suppresses wages.

Our aspiration should be for anyone below average wage not to pay income tax. We should start with raising the threshold to the minimum wage and then committing to raising that by a given amount more than inflation each year. This would signal our commitment to those hardworking families, to people who fret over how to pay the rent or mortgage, how to keep food on the table while paying the bills and try to manage, amidst all this financial stress, to have a little fun in their lives. And if they end up paying no income tax that would be great. And those people would thank us for it.


No comments: