Thursday, 27 December 2012

How To Make Taxation Popular

This is quite a long and serious Blog post, so bear with me.

Thanks to the efforts of government Treasuries around the world, we take it for granted that our Taxes all go into one big Pot for our governments to spend as they see fit. This assumption needs to be challenged. First, because it facilitates wasteful expenditure, which is often rampant (it certainly is where I live, in the UK). Second, because it allows governments to spend large sums on causes which - if they had to approve them - voters would never agree to.

Suppose, for example, that Britain had a War Tax system in place: If a government wanted to go to war, then it would have to finance the war from the proceeds of a separate War Tax. The direct costs of a war would be those over and above those incurred by maintaining regular armed forces. So it would include the cost of bullets and bombs used, transport and other logistic costs, additional wages paid out for active service duties, compensation for the victims of  mistaken targetting, and so on through a very long list.

Mr Blair would have found it much harder to launch his vanity war on Iraq if he had been obliged to get support for the funding as well. And if he had succeeded, we would still be paying an Iraq War Tax - for example, to compensate victims of our abuse.

It's no bad thing if governments don't always get their way. But if they went down the route I am proposing, they might actually find it easier in many areas to secure popular support for taxation - and popular support means, among other things, that people will make less effort to avoid or evade those taxes.

In many aspects of our lives, it is not hard to see how specific - purpose, ring-fenced taxation would work. A national government maintaining a national road network would fund it from vehicle licensing or fuel taxes or ... In my view, fuel taxes are the fairest method since they automatically link tax paid to use made of the road network. In a rough way, they are also progressive since the richer man in his non-fuel economical car pays more per kilometre than the poorer man in his more fuel-efficient vehicle.

But what about Benefits? Ah, yes, what about Benefits?

One hundred years ago in the UK, voters signed up to the idea of state Benefits as things which were paid out from a compulsory state Insurance scheme. There were defined contributions and were - or could be - defined benefits directly related to the actuarial calculations of the scheme's managers.

In the UK, we still have National Insurance numbers and we still pay National Insurance contributions. But the Treasury does not like this and it has made the relation between Insurance contributions and benefits as non-transparent as possible.

Instead, the Treasury prefers to run Ponzi schemes, in which you pay out to those in need of benefits now out of the general taxes of those who don't currently need benefits - and keep your fingers crossed that you can stay one step ahead of bankruptcy.

But if you are trying to pay pensions to an ageing population out of the taxes of a shrinking work force, then bankruptcy is the inevitable result - though it may be disguised for some years by reckless borrowing. As Greece has shown us, reckless borrowing is something banks are very willing to facilitate.

The only long-term viable solution is to make people face up to the fact that if you want a pension then you have to save for it - and that this will cost you a LOT. And governments seem reluctant to tell voters this truth. In France, President Hollande's first act on election in 2012 was to LOWER the pensionable age for some groups of workers (who of course had just voted for him). This is at least as suicidal as the American Congress's current fascination with falling over the fiscal cliff.

In short, taxation will only become popular when those who pay taxes know what they are for - and when their overall level has been reduced because Insurance schemes have replaced the current electoral-bribe system of Handout Benefits.

A good measure of progress towards the goals I am setting would be the abolition of VAT. This is a regressive tax on poorer people which produces one of the biggest all-purpose government slush funds. What's good enough for the Channel Islands - which don't have to have VAT because we have set them up to suck serious taxable money away from the UK - is good enough for the UK too. We just need to reverse the direction of suck.




Friday, 21 December 2012

My Predictions for 2013

I just looked at my Predictions for 2012, made a year ago. Three are wrong. There was no new UK foreign policy disaster (at any rate, not one bigger than The War of the Ecuadorean Embassy). There were no new urban riots in August 2012. And Michael Gove is still in charge of Education - really extraordinary that this is so.

One is possibly right: Alex Salmond may be more popular than a year ago despite huge efforts on the part of the Unionist parties to ensure that he isn't.

In these circumstances, I make no predictions for 2013. I wouldn't put money on any of my hunches.

However, I do have the feeling that in London 2013 is going to be a good year for new-to-the-scene criminals without Twitter accounts. The Metropolitan Police is now entirely committed to feet-on-the-desk investigations of crimes against media personalities and crimes committed many years ago by the decrepit and dead.

And with that reassuring thought, I wish you an enjoyable End of Year. Just take care in the New Year.


Tuesday, 18 December 2012

Sex stereotyping at NEXT

Christmas is coming, I have a one year old grandchild and so finding myself in a large branch of NEXT, I wandered into the "Kids Bedroom" section. I thought I might find a(nother) present.

A lot has changed since my own children were young, a quarter century ago. Everything is now sex stereotyped. Everything is pink OR blue and to save some old fool like me from transgendering their unfortunate grandchild, boxes are stamped in big letters BOY or GIRL. So buses and trains are BOY. I can't tell you what was stamped GIRL because at this point I gave up and left. I came home, went online to the hated Amazon and bought a box of old-fashioned, sensible Brio wood building bricks which don't come stamped BOY or GIRL. I hope my grand daughter will enjoy playing with them.

I suppose NEXT tells us a lot about Middling England, which has rejected the egalitarian nonsense which many of us believed  back in the 1980s. Now we know we got it all wrong. There are boys and there are girls. Sex and Gender are the same thing (so much so that that people now use "Gender" where they used to use "Sex").

There are boys and there are girls. And in the same manner, there are the riff-raff and there are our  nice children who go to the nice Faith schools New Labour gave us. God Save The Queen..

But, you might say, Middling England is in favour of Gay Marriage. True enough - and if it wasn't, Mr Cameron wouldn't support it. But this rather confirms a prejudice I have about all this earnest promotion of Gay Marriage.

I think it's basically part of a conservative movement, a reaction against all that 1980s criticism of marriage and the family as not as good as they were cracked up to be.  Gay people have become conservative and no longer want to offer us any version of an alternative lifestyle; they want the same lifestyle as Middling England. They want to  buy pink toys for their girl children and blue toys for the boys.

And, in due course, they will want to have divorces as vicious as those enjoyed by heterosexuals


Wednesday, 5 December 2012

The Press Rescued from Leveson - Thank You, Kate

At the time of the 1953 East German Uprising, Bertolt Brecht satirised the reaction of the Communist Party authorities. Shaking their heads sadly, they professed themselves very disappointed with the People and announced that they intended to create a new one. Which would adore them.

I laugh, but sometimes I struggle too. What hope for any revival of democratic politics in the United Kingdom when  it seems that half the population, male and female, told that Kate is pregnant, wets its collective knickers?

The timing could not have been better, even if unintended - though the timing is so good that there must have been some hidden hand at work. All the nasty newspapers can now drop all other stories - all those unpleasant stories -  in favour of Daily Bulletins on the progress of The Pregnancy.

And at the end of it, there will be a Royal Birth and yet another Heir to The Throne and David Cameron will be tempted to give Middling England yet another Day Orff to descend on London  and wave their silly little flags.

Why don't they all just emigrate to the Costa del Sol? There is no hope for this place whilst these people remain.


Monday, 3 December 2012

I am inclined to agree with Ian Hislop ... The Press and the Police

The Metropolitan Police and Her Majesty's Revenue and Customs seem to have this in common: they adopt a "light touch" approach to the regulation of the powerful. Faced with evidence of criminal  or very dodgy doing by a seriously big corporation - well, they don't really want to know. After all, we know these people. We play golf with them; we eat dinner with them; we provide them with horses to ride.

Ian Hislop, editor of Private Eye, argues that laws already existed to deal with the crimes of News International and others. Theft, burglary, bribery and so on are good old-fashioned crimes. Coppers ought to recognise them when they see them and proceed as they're supposed to. You're nicked. We don't need new laws to "regulate" the Press; we need the Metropolitan Police to do its job. Leveson did not find it palatable to state this homely truth.

There seems no particular reason why Met Police officers should be best buddies with the apparatchiks of Press barons but they have been to a remarkable degree. The only real explanation is that police officers want to feed stories to the Press, knowing that in one way or another the press will express its gratitude. Politicians cultivate their Press contacts for similar reasons.

HMRC is now a tainted brand because - for the first time in my life - it's out in the open that it is indulgent towards those who ought to pay lots of tax but intend only to pay a little. It's not exactly deference; it's more like collusion. If we began to pursue cases of "historic evasion" going back to the 70s and 80s, I think it would be at least as eye-opening as investigations into "historic abuse".

But it's not entirely HMRCs fault. Parliament votes for the laws which create taxes and exemptions from taxes. Parliament also creates the principal tax havens in which big corporations and rich individuals seek shelter from the levels of taxation which only poor people end up paying. The House of Lords plays an important role in ensuring that the voice of the rich and powerful is heard. Well, that's not surprising; it's what they are paid for.

So I'll go with Ian Hislop on the Press. Enforce the laws we do have. And on taxation, focus on the role of Parliament in making it all so easy not to.