I tweeted this last night:
Where did this absurd myth that the government's money is 'ours' come from? Taxes belong to the government and no else. You pay it because you owe it
It caused some controversry.
I followed it up with:
Democracy is a process by which we hold government accountable: it does not make government our agents
Libertarians were not happy.
For the record, my thinking is noted here.
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Perhaps the ‘christians’ amongst us will remember ‘Pay unto Ceasar……’. Paying tax is paying for common services. I am sure mi’lord would not like to stop his chariot every X miles just to pay the ‘toll’. Road tax is so much simpler.
Democracy is also first and foremost the process by which we choose our agents to run society in the best interests of the people. You cannot hold them accountable unless you’ve chosen them.
That commentator clearly never got logic at school.
between ‘all tax is theft’ and ‘all proprty is theft’ perhaps lies reason
I’d be interested to have your thoughts on Professor Philip Booth’s recent Sunday Telegraph article Richard.
“Tax havens are essential and do us all a favour.
Who among Sunday Telegraph readers has not tried to avoid paying tax? I should imagine that most married readers keep their assets in the name of the spouse with the lowest tax rate.”
This bit is a particular puzzle:
“Tax havens are in fact essential, especially international financial centres. Tax rules are often unjust, with non-taxpayers (such as investors in ISAs) often paying tax or taxpayers from overseas being taxed twice when they save money in investment funds.”
http://www.telegraph.co.uk/finance/comment/9669058/Tax-havens-are-essential-and-do-us-all-a-favour.html
I am afraid this is the perverted logic of the right, that tax crime is beneficial for undermining government, and that shifting the tax burden to the poor is beneficial for supposedly encouraging enterprise by promoting inequality. That is what tax havens do, by design. Booth and the IEA promote such ideas
This is a curious paradox given that some people choose to withhold certain portions of tax. Certain Quakers choose to pay less tax because they feel that it’s not in right ordering for a pacifist individual to support defence. And yes, they’re prosecuted for it. And no, I don’t do this myself. Mainly because I don’t want to be stripped of my ACA for not paying the right amount of tax.
I don’t agree that we own only the net portion of our salaries and never the total amount. I – M – earn my full salary from my employer. And I pay my taxes, in full, in order to comply with the law and because I believe that the government needs that money to provide public services. But I earned that money. The Treasury did not earn it. It is theirs because I comply with the law. It is not theirs because they earned it.
If tax automatically belonged to the government and not to the taxpayer, there would be no need for the government to spend that money in an accountable fashion. They could spend it as they liked. But they can’t do that, because they are accountable to us – and that is because they are spending the money that we earned and we give them. If the money was theirs automatically then there would be no accountability. Because we earned the money in the first place, because we pay it to the government, we do have some say in how it is spent, through the MPs that we elect. If we didn’t – then this would be a dictatorship not a democracy.
M
I am not sure you can have read my paper: nothing I say is inconsistent with democratic accountability which is about determining the amount of tax we pay. But it still does not mean the tax is ours.
Let’s take a simple comparison. If you’re VAT registered and charge VAT the VAT charged is not yours – it’s the governments, of course. You are entitled to the next income paid.
Exactly the same with income tax – only the net is yours.
Oh, and since as has been proved by QE and deficit spending, there is no link between tax and the level of spending to say tax makes them accountable is also not true. Democracy does that.
Theoretically all spending could be paid for with printed money if banks created no money at all. But rather as most people refuse to think banks create money out of thin air although that is true most people like to think their income is their own – and it is, but only after tax
Anything else is to deny the rule of law and the existence of property rights. I’m not sure Quakers do that. It’s one reason why as a Quaker I can’t support the peace tax campaign. It is philosophically misguided at many levels.
Richard
Hi Richard,
I will be honest and say I haven’t read your paper.
I wouldn’t agree that VAT and income tax follow the same logic in terms of who owns the net and gross amounts. VAT is added on to the net amount when you make a sale. Income tax is deducted from your wages before you receive them.
Let’s agree to disagree and retain mutual respect?
M
I can respect you – of course – but not your argument
That, I am afraid, is without a lot of logic
But we can disagree!
“Where did this absurd myth that the government’s money is ‘ours’ come from? Taxes belong to the government and no else. ”
A lot of people seem to refer to nationalised services as being “ours”, e.g “our” NHS.
Do you think that they are equally wrong?
Yes
Technically of course they are wrong. It is owned by the government.
Try to sell your bit of the NHS
Or even identify it
This is one of the most fascinating discussions (topic)I have read a long time.Especially the part about “our NHS” when you said we should identify our piece and try and sell it “lol”.Really,the tax we pay does not belong to us,otherwise when we needed to,we could dip into the pot. Try doing it!,”lol”.
I agree with the sentiment behind your post, but I’d say that the truth lies somewhere between the two extremes: it’s not just the government’s money, nor just ours, but both and neither.
Your post makes a clear distinction between “us” and “the government”. By so doing, you seem to have fallen into a terrible elephant trap, accepting the terms that right-wing, small-government campaigners are trying to force onto the debate. The government is not some separate, impersonal (potentially evil) entity: it IS us and represents our interests. At a practical level that may seem meaningless, but it is an important point to acknowledge.
No, I can’t get at my bit of the NHS, but neither can I get at my pension pot (at least for another few decades). It doesn’t make it any less mine.
The government represents us and is accountable to us
It is not us though
It is legally and actually distinct. We can’t pretend otherwise
Sometimes the government represents us and sometimes its accountable to us but often it is not…
There are many cases of bad/unpopular laws that are still on the statute books – Digital Economy Act for example, where we really have no way of getting the government to remove them or making the government accountable to us.
Your ‘pension pot’ does not exist. Your state pension will be paid from taxes received at the time.
[…] Bored, tired and after drinking much gin – basically my natural state of being – I scrolled through some tweets last night to discover Peter Murphy of Tax Research Uk ask a question which has been bugging me for a while: “Where did this absurd myth that the government’s money is ‘ours’ come from?” […]