Originally published February 2013.
David Cameron stood up at the last Conservative Party conference and lambasted Ed Miliband for describing George Osborne as 'writing a cheque to the country's millionaires' by proposing to cut the top rate of tax. Cameron went on to say of the tax cut for these income millionaires 'Well I've got news for Ed Miliband - it's THEIR money' (his emphasis). I was struck by the utter naivety of this statement at the time. Down the years I have often heard this argument from people in all walks of life who resent paying tax, but it seems particularly prevalent amongst Conservative supporters. It is so simple-minded and populist that I was surprised Cameron resorted to it, but then he seems to have found his level recently - his being that of The Daily Mail and its infantile commentary. What it fails to take into account is how people make the money on which they are required to pay tax. It fails to note that without a wealth of economic, social, political and historical infrastructure behind them no-one would be making a penny and we would all be bartering with each other. Incidentally, as an aside, that 'infrastructure' includes the workforce from whose labour money is generally made - that workforce has to be housed, fed, educated, kept healthy etc. The development and maintenance of this infrastructure costs money and that is what their taxes are paying for. Anyone who begrudges their tax bill should instead look upon it as rent paid for their use of the infrastructure provided to them by the state both historically and currently in order that they can function in an economic capacity and make 'their' money. The rent people pay is in proportion to the benefit that they derive.
I feel this is particularly apposite this week when the Poll Tax 2.0 is looming into view with the abolition of the Council Tax benefit by central government. People who have no income are going to be asked to start paying a proportion of their council tax bill for the first time. From the standpoint I outlined above they should be paying no tax as they have no income. Indeed that is the point of the Lib-Dems' push to take the lowest earners out of taxation altogether - one of their only two positive contributions to government (the other being their stopping of boundary reforms). However the Conservatives in their mean-minded conviction that basically everyone should pay a flat-rate of tax (go on, you can admit it, most Tories believe this in their heart of hearts) cannot rid themselves of the desire to make sure everyone pays something - Eric Pickles I believe called it 'ending the something for nothing culture'. Correct me if I am wrong but I am fairly sure he is old enough to have lived through Poll Tax 1.0, but seems to have failed to learn the lesson. This fatal addiction to ensuring even the poorest pay tax, driven by a narrow interpretation of what tax actually is, will cost the Conservatives dear in the long-run.
David Cameron stood up at the last Conservative Party conference and lambasted Ed Miliband for describing George Osborne as 'writing a cheque to the country's millionaires' by proposing to cut the top rate of tax. Cameron went on to say of the tax cut for these income millionaires 'Well I've got news for Ed Miliband - it's THEIR money' (his emphasis). I was struck by the utter naivety of this statement at the time. Down the years I have often heard this argument from people in all walks of life who resent paying tax, but it seems particularly prevalent amongst Conservative supporters. It is so simple-minded and populist that I was surprised Cameron resorted to it, but then he seems to have found his level recently - his being that of The Daily Mail and its infantile commentary. What it fails to take into account is how people make the money on which they are required to pay tax. It fails to note that without a wealth of economic, social, political and historical infrastructure behind them no-one would be making a penny and we would all be bartering with each other. Incidentally, as an aside, that 'infrastructure' includes the workforce from whose labour money is generally made - that workforce has to be housed, fed, educated, kept healthy etc. The development and maintenance of this infrastructure costs money and that is what their taxes are paying for. Anyone who begrudges their tax bill should instead look upon it as rent paid for their use of the infrastructure provided to them by the state both historically and currently in order that they can function in an economic capacity and make 'their' money. The rent people pay is in proportion to the benefit that they derive.
I feel this is particularly apposite this week when the Poll Tax 2.0 is looming into view with the abolition of the Council Tax benefit by central government. People who have no income are going to be asked to start paying a proportion of their council tax bill for the first time. From the standpoint I outlined above they should be paying no tax as they have no income. Indeed that is the point of the Lib-Dems' push to take the lowest earners out of taxation altogether - one of their only two positive contributions to government (the other being their stopping of boundary reforms). However the Conservatives in their mean-minded conviction that basically everyone should pay a flat-rate of tax (go on, you can admit it, most Tories believe this in their heart of hearts) cannot rid themselves of the desire to make sure everyone pays something - Eric Pickles I believe called it 'ending the something for nothing culture'. Correct me if I am wrong but I am fairly sure he is old enough to have lived through Poll Tax 1.0, but seems to have failed to learn the lesson. This fatal addiction to ensuring even the poorest pay tax, driven by a narrow interpretation of what tax actually is, will cost the Conservatives dear in the long-run.
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