A Taxing Problem

Listening to David Aaronovitch on the Beeb has made me think yet again about taxation.  According to a number-cruncher, we spend 30p of every £1 on social security, health 20p, education 10p, defence 5p, interest on national debt 5p, police 5p.  Of the rest comes everything else – including environmental stuff (it’ll be interesting to see this in thirty years’ time, when we’ve so screwed the environment that it’ll be our biggest expenditure).

Another number-cruncher said that 78% tax is paid by the highest household earners.  The top 1% of income tax payers pays 27% of tax.  That’s very generous of them.  However, they earn over £160,000.  At that gross salary (according to moneysavingexpert.com), you’d pay £57,800, which seems like a whack-loada-tax – and you have £6,724 NICs.  However, that still leaves a nice net pay of £94,476.  Leaving aside the fact that that is more money than I’ll ever earn gross (I’m not envious…), that is more than any individual actually needs to live a comfortable life on.

But we need to do something to plug the widening gap between tax revenues and expenditure.  Not house-based taxes, perhaps.  The last valuation was in 1991 – but to re-evaluate house prices would cripple lots of people (yes, including me) whose houses are in the South-East and who can only just about afford the mortgage.

The parties all have their suggestions for improvements.  My alignment, of course, is with the Greens.  But we need to go further – even to have a change of attitude.  We need a two-pronged attack on the problem of taxation.  First, we need to make taxation not something to avoid (or evade), but something to be enthusiastic about and proud of paying.   Secondly, we need to make how our taxes are being spent much more open.  Both of these things are possible with the internet.

A friend suggested that we could publish “taxpayer-of-the-week” – we could look on those who pay the most taxes as philanthropists, not fat cats; benefactors, not bankers.

Councils could also publish easy-reading version of their budgets and accounts, so we know how much they’ve spent on the police, the local schools etc.  The NHS ditto.

Here are some possibilities and problems from the Open Knowledge Foundation:

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