The Problems With Tax

To me, there’s no question about it: taxes should be reduced, and the tax system fundamentally changed. Yet we live in an age where people listen to the likes of Richard Murphy when they talk (apparently without irony) about The Joy of Tax, and where people attempt to damage the productivity of businesses that carry out perfectly legal tax avoidance actions. So at this point it is probably worth offering a personal perspective on why I think tax is bad; or, at the very least, tax is not a de facto “good”.

Let’s start by looking at the counter-argument to any claim that an individual might not want to pay tax: we pay for any number of different goods through choice, so why not choose to pay tax which offers both the individual and others clear benefits?

Now, it is true that I choose to spend money on various things. These are both things that offer a tangible benefit to me (such as paying for my various postgraduate studies) and things I just enjoy (books, DVDs etc). I also pay for essentials even if I would rather not – like rent and food.

And I have no issue with paying for essentials through the tax system. The first problem comes, however, with the level of tax I am expected to pay for those essentials. Take rent: before moving in somewhere, I shop around to get value for money. Not so with the tax system. I am forced to contribute money to the NHS, for example, even though when I try to use those services I am required to wait for ages and am generally seen by someone who frankly mocks the title of “medical professional” through their incompetence and disinterest. There’s no shopping around with tax; you pay the rate you are told to pay by the government. In fact, unless you are self-employed, you don’t so much pay that money as have it taken from you on a monthly basis without ever really seeing it for yourself. Therefore, the first reason why I resent paying taxes is because I resent seeing my money wasted in the way the British public sector wastes it, year in, year out.

The second problem comes with what the money is spent on. Now, I might choose to walk into HMV, and once there, I might choose to buy some products. Of course, I’m only going to buy stuff I have no ethical objection to: I might buy a DVD boxed set of a TV series I want to see. I’m not, however, going to buy anything associated with The X Factor, since I believe that show is partially responsible for the nosedive in the intellectual capability of people in this country. The same is not true of tax; quite simply, I pay for things of which I simply do not approve. I have no problem with paying for police officers to investigate crimes; I do have an issue with paying for thug-like riot police who possess no concept of proportionality. Likewise, I’ve no objection with my money being spent on armed forces to give this country a defensive capability, but I do resent the money I earn being spent on wars of aggression in Afghanistan and, in particular, Iraq. In short, I can’t choose what my money is spent on, regardless of my own ethical considerations.

And the problem of choice – which underpins this whole post – is also at the centre of my final objection. I walk into HMV and there is no-one compelling me to make a purchase. I can turn around, walk out and go somewhere else or simply not spend any money at all. The same is absolutely not true of tax. I pay tax or I go to prison. There is no choice with taxation; it is extracted from the population under duress using menaces. Furthermore, there is no opt-out. Even if I choose never to use a single public service and therefore cost this nation nothing, I still have to pay tax. There is no way of choosing not to participate in the tax system, just as there is no way of choosing not to have my money spent on things with which I just cannot agree or a way of choosing not to have my money wasted on bureaucracy and ineptitude in the public sector. In short, the tax system we have in this country is illiberal and almost seems set up to provoke the genuinely intellectually engaged into resenting it.

Of course, it could be very different. Show me my taxes aren’t being wasted, and I’ll feel happier about having it taken from me. Give me an opt-out in areas which I would rather fund myself, or over tax money spent on illiberal domestic policies and aggressive foreign policies, and I’ll start to feel comfortable about the government taking so much of my income. But until that happens, I’m going to see tax as a problem and anyone who avoids tax as not immoral or wrong, but rather someone attempting to maximise their own freedom in the face of draconian legislation and inept, government led waste.