My definition of a modern tax system

Salary-planning2These days, not a week goes by without hearing something about how we pay too much in taxes or how too much of what we do pay is spent on X. Occasionally, we hear someone say that they’re happy to pay their dues, as long as none of it goes towards Y. I’m quite self-determined. I believe that what I earn should be mine to keep. But I also see the merits of paying my taxes. I never truly understood why until I attended a lecture by Will Hutton in the early 2010s on our place within the system and how it interacts with us.

I wasn’t expecting any major revelations on this particular evening. However, he did say something that more or less crystallised my view of paying tax. I can’t quote him word for word, but it more or less went as follows: “In this room there are 300 people. 100 of you will get cancer. But we don’t know which 100. So, everyone puts money into a pot and, when the 100 of you, who are destined to get cancer, get it, there is money available to treat you.”

At the time I liked this. But later it occurred to me that the argument only holds water if the thing you’re putting money into a pot for is a just cause and is agreed upon by everyone paying into it. If he’d said: “In this room there are 300 people. 100 of you will die from an enemy strike. So, everyone puts money in a pot and, when 100 of you die, we’ll have enough money to chuck a nuclear warhead back,” some may not have been so content.

But we live in a technologically advanced age. We don’t (necessarily) need politicians deciding how to spend our money. We could say so ourselves. Here is my proposal.

Let’s say we all pay a constant rate of tax. This is just to make writing it down easy. Let’s say 30% of anything earned over GBP 10,000. This ensures everyone pays an amount, assuming they’re earning enough. Forget about special considerations and sources of income for a moment – those are fine details and not the thrust of what I’m about to get at.

hi-tax-reform-852-is5407438Now give everyone online access to their account at the tax office and let them see how much of their individual tax contribution goes towards the various categories of public spending. This shouldn’t be too hard, given that we already do internet banking and are getting comfortable with online security. Next, present slider controls, like you see on confused.com, so each taxpayer can adjust their taxation spending preferences according to their beliefs. This shouldn’t be too hard either, given that price comparison websites have been doing it for years.

Do you want more money to be put into education? Push that slider up to 70%. Don’t like war? Push the military slider down to 5%.

The government can calculate how much money is available in each spending category after aggregating across all the accounts. Again – not hard. A simple database query can take care of that.

Of course, not everyone will be engaged enough with such an idea to ever bother logging on. For these accounts, let the politicians haggle between each other as they’ve always done. But, for the taxpayers who want to have a say, their slider control preferences can’t be overridden by the treasury.

powerfist_355900You want more power to the people? Surely this idea has got to be a step in the right direction.

Whether such an idea ever becomes reality is another matter. So far, I’ve not seen a great track record when it comes to governments and IT. “They” will most likely see this idea as threatening. Or think we’re too stupid to think for ourselves. But every journey has to start with a first step. Any takers?

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About sebpringle1975

Twitter @sebpringle1975
This entry was posted in Democracy, Libertarianism, Politicians, Politics, social, uk, uk government and tagged , , , , , , , . Bookmark the permalink.

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