Tax Reform

Now, I'm all for combining income tax and national insurance. The latter is a tax, pure and simple, so it should firstly be called a tax and secondly incorporated into that other direct tax on our income. Simplify the system; make it more transparent. And yeah, the rate of income tax would go up if NI was incorporated into it. But that is also a good thing. Not because I want to pay more tax, mind, but because the plainer we make it to everyone just how much money we end up being forced to give to the government, the more likely people are to start protesting about it.

But, of course, not everyone agrees. However I do have to say that this is a pretty dumb reservation:

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, described the mechanics of the income tax and National Insurance merger as a "minefield".

"It is a lot easier said than done," he said.

As an aside, let's just take a moment to note that this is a tax accountant complaining about taxes being made simpler. Hmmm, wonder whether he might have a vested interest in a complicated tax system?

But let's look at the substance, if we can call it that, of what this chap is saying. Of course, changing a system is often difficult, and fraught with problems. So what do we do? Overcome those problems. Anything else is a manifesto for the worst sort of political conservatism. It is basically saying it is broke, but we can't be arsed to fix it.

Just imagine if humans throughout history had the same mindset. "This divine right of kings business seems a bit problematic to me". "Yeah, but the transition to another system is going to be tough though". "Ok, let's not bother". Apply this mindset to the American War of Independence, or to World War Two, or the Space Race. Nothing even remotely challenging has ever got done or will ever get done with this sort of defeatist mindset.

Of course, there may be many reasons why projects shouldn't be undertaken. Morality is key, as is the practicality of the overall project - the Marxist utopia might sound grand, but the transition to it involves dictatorship, and it is underpinned by certain unlikely assumptions about human nature, so let's not bother after all. But if the sole objections to a plan are that it might be problematic to make it happen, it is probably a sign that you should start trying to solve those problems rather than bleating about them. Particularly if, like incorporation of NI into income tax, short term complication will lead to long term transparency and ease of use.