Tuesday, 11 September 2012

Tax Creep

The rich have the right idea. No one should be losing forty or fifty percent of their income to governments, democratic or despotic it doesn't matter. Why not? When governments - local and central - take that much money from you they have a serious problem knowing what to do with it. Half the time, they waste it. That's an empirical, documented fact. Better to pay twenty or twenty five percent in tax and have the money well spent because your governors have to think carefully what to do with it. It's a no brainer.

In his fine book Losing Small Wars, Frank Letwidge remarks that soldiers don't get medals for showing restraint, however heroic the restraint may be: you won't get a medal for not firing into the hostile crowd which surrounds you. Bravery must involve firing bullets.

Politicians and bureaucrats don't get rewards or promotions for not doing things. British Prime Minister Harold Wilson does not get credited for not sending British troops into Vietnam; he gets discredited for giving verbal support to the USA.

No bureaucrat ever thinks, "If it ain't broke, don't fix it". If you have been given a Budget - and especially if you had to fight to get it - then you must spend it. Otherwise you will get less next year. And you will be thought idle,incompetent and lacking in intitiative for not finding "Projects" on which to use up your Budget.

And when giving an Annual Report, any right-thinking bureaucrat will wring their hands and lament the fact so many worthy, desirable, praiseworthy, admirable Projects could not be undertaken because - hang your heads in shame, Masters - THE BUDGET WAS NOT BIG ENOUGH. ( This is basically what you say in an Arts Council report).

At the level of local government, the need to Do Things accounts for the major industry known as Minor Road Works. Your truly idle, incompetent and unimaginative local transport boss knows only this: you can get through that Budget by narrowing a road here, modifying a junction there, fooling around with the speed limits, adding half a cycle lane, tarting up the street lighting. Proceed like this and you will never have to face the challenge of doing anything Major . But in your Annual Report, your Annual Appraisal, you will be able to list an awful lot of Things Done.

There would be no Bonus, no Promotion for someone foolish enough to say, "Nothing else needed doing, so we returned the unspent part of our Budget to central funds".

In the early days, BBC radio news bulletins did not have a fixed length. They would end with the newscaster saying, "There is no more News tonight". That didn't last long. You don't build careers on that kind of idiocy.

Taxes creep up as politicians and bureaucrats find good causes which need money, most often wars. Trending steadily upwards over two centuries they rarely, if ever, fall back significantly. They are the the foundation of political reputations and bureaucratic careers. It does not matter if the money is squandered. In the world we live in, there are no punishments for failure. It is the taking part in spending all this money not the spending it effectively that is so handsomely rewarded.

It is a political tragedy that the case for low taxation is only made by right-wing courtiers to the rich and dodgy. There are sound progressive arguments for bringing down the overall tax burden, and especially on those who bear it because the rich and dodgy have decided (often with government blessing) that, well, taxation is not their cup of tea so they ain't gonna pay...

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