Perhaps we should make higher rates of tax voluntary?

Yesterday evening I made – via the wondrous medium of Twitter – an observation about tax. It was simply that, if someone had a choice between two tax environments – high tax and low tax, then they’d opt for lower tax.

Of course, it’s not a simple as all that – living in the glorious South Pennines may indeed be sufficient of an incentive to pay higher taxes. The set of choices – ‘choice architecture’ I believe the boffins call it – do not exclude remaining in a place where there are higher taxes.

However, the real lessons in all this are firstly that there remain many people who at least claim to be fans of progressive taxation and argue that they’ll joyfully hand over most of their income to the benevolent state – it is as one remarked “the price we pay for living in a civilised society.”

And this is fine – if somebody believes that it’s a spiffing idea for the government to have 75% of his earnings that who am I to stop them handing over this cash to the government? But these enthusiasts for progressive taxation don’t do this do they? We know they don’t because almost nobody  makes such payments to the British government (and I’m prepared to bet that the same applies in France, Germany and the USA – indeed more or less everywhere).

Instead people who want to pay more taxes – for whatever reason – choose instead to clamour for higher taxes on “the rich”. What these people want is for everybody to pay more – including those like me who think the government takes way too much off us in taxes (certainly for the service we get in return).

If these progressive folk are so keen on paying more nothing is stopping them from doing so. And if such people believe that giving more is about securing “social benefit” then consider some alternatives:

• You want money to be spent on caring for people? Rather than give it to the government, how about paying the nursing home fee for an elderly neighbour or providing someone to clean her house, bath her and help get her shopping?
• Perhaps you want your money to go to housing the homeless? Here’s a suggestion, rather than giving it to the government how about paying the rent yourself or – here’s a thought – putting the homeless person up in your spare bedroom
• Maybe you want lots of lovely arts stuff from your taxes? Just an idea, pay the money to your local gallery, sponsor a struggling artist or cough up for music lessons at your local school.

I could go on but you get the point. What these progressives are saying to us selfish Neanderthals is that we should be made to pay more in taxes because they want to pay more taxes. And what we get is a load of chittering about ‘civilization’ and ‘fairness’ – as if this is of any real consequence.

We live in a society where morality is defined – for some people – as being a fan of government. A culture where our duty to look out for our neighbour is sub-contracted to some state official meaning that we don’t have to do anything. Indeed, that state official actively dissuades us from such activity since it does him out of a secure, tax-funded living.

I am not a worse person than you if I believe that government isn’t the solution to social problems. Indeed, as one reads through the history of government, we see that for much of its time that government acts in the interests of the governors rather than the governed. And those governors include the scribes, the bureaucrats and the administrators as well as the god emperors, kings, senators and prime ministers.

The point of the revolutions – if I might be a little bit Jacobin here – was to secure the end of this tyranny, to establish a world where the interests of the governed, as determined by the governed, were paramount. And, since those interests were not universal (my wants, needs and preferences are different from yours) such an establishment can only be achieved by granting sovereignty to the individual. And this means removing that sovereignty from those god emperors, kings, ministers and scribes.

There remains a role for collective action, for collaboration, cooperation and co-production. And this can be delivered through a ‘government’ (indeed is perhaps best organised in this manner). But this doesn’t give us the right to argue that we should remove money from Fred simply because there are 100 or us and only one Fred. Yet that is precisely the principle behind “progressive” taxation – not that it is more practical to take money in this way but that it is somehow more moral to do so.

It would be a delight if, rather than coercing higher rates of tax from people, we make those higher rates voluntary. We can then apply the arguments – “fairness”, “civilisation”, “social value” and so forth – to persuading people to sign up to that higher tax rate. And it would finally call out the “progressives” – put up or shut up we might say.  And – forgive me for my cynicism – I’d bet that a fair few of those currently heaping coals of fire on the heads of us sinners would be found wanting in the taxpaying stakes!

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