Tax simplification

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AccountingWEB (amongst others) has reported that the Tories have issued a press release saying:

A report by a working group headed up by ex-chancellor Lord Howe has suggested the establishment an Office of Tax Simplification (OTS) to examine the existing tax code and make proposals for simplification. As well as being staffed by HMRC and academia, the OTS should also include individuals from the tax professions to provide expertise and a fresh perspective.

There are five reasons for taxation, all of which conveniently begin with an R:

1. Revenue raising

2. Repricing goods or services considered beneficial or harmful

3. Redistributing income and wealth within society

4. Representing the democratic social contract between the government and those governed

5. Reorganising the economy through fiscal policy.

I am not claiming that at present all these objectives are achieved: I do suggest that there is no democratically elected government in the western world which does not at present subscribe to this view, albeit with different emphasis given.

You cannot have this range of objectives and have a simple tax system. It is not possible. When compounded by the abuse that the tax profession heaps up on any arrangement created by government, the only appropriate responses to the suggestion that a person seeking political office wants to create an Office of Tax Simplification are threefold in number:

1. Admiration for their political guile, whilst doubting their sincerity. Simplification is not going to happen.

2. Presumption that they have no understanding of the issue they wish to tackle (and I doubt this).

3. Considerable concern that they might, like the flat taxers from whom they take inspiration, want to change the fundamental nature of our society with the aim of making it considerably more unjust.

None is attractive. I hope it's number 1: that is at least politics as normal.