Tuesday 20 March 2012

Portions

In the long slow battle against the public sector that the Tory party is currently engaged in, itemising the tax bill is a masterstroke. Like all great pieces of strategy, it will easily be obscured by something seemingly more important (in this case arguments about the top rate of tax) whilst it quietly changes the landscape entirely.
Everyone will have a little bit of interest in seeing how much they pay for the NHS or unemployment benefit. Then they will start asking why they should pay for the NHS, when they have private medical insurance, or why they should pay for schools when they have no children. Once you see your tax as a set of payments for specific services, you will want to start managing them and opting out of the ones you don't want. Once services become optional rather than universal, what is the point in the government providing them? You may as well buy them off a private company. Philosophically, the objection to any form of privatisation is removed.
When talking to people in the USA, I noticed that they really resented the state because every year they had to fill in a tax return and pay money directly to the state. In this country, because the bureaucratic infrastructure has been in place for hundreds of years, most of us are taxed before we are paid, meaning that we have little sense of having to give money to the state. This creates an entirely different relationship with the concept of tax that explains much of the difference in the approach to the state's role on either side of the pond. Obviously, the Tories would love us all to have an American-style tax system that made us resent every penny we pay to the state, but abolishing PAYE would lose them the election. Much 'better' to change our attitude to the tax system by other means.
The itemised tax bill changes nothing immediately, it just allows us to argue about whether we are paying enough for this or that service. It is once we start to ask if we are paying too much that the whole landscape begins to change.

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