Brussels is getting The Joy of Tax

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I have already written about the tax conference I attended in Brussels over the last couple of days and discussed one of the hot topics of conversation, which was Brexit. Now let me consider the other, which was, of course taxation.

I am not going to discuss the detail of the debate. That is not because they were not good or useful: this was at a technical level a first rate conference, in my opinion. But that fact is overshadowed by the more important fact that the EU's DG Taxation ran an event on tax fairness at all. Not long ago this would have been as unlikely as the World Bank running an event on tackling tax wars, which it did last year. The significance is in the change in attitude towards tax that each represents.

For too long tax has been considered a dry, technical issue. The only real function of tax has been its supposed role in funding public services. The only issue of consequence subject to much debate was its success, or otherwise, in supposedly doing so within the requirement for a balanced budget. But this conference opened with a discussion on the philosophy of tax in the context of the need for social justice if the legitimate expectations of people are to be met.

It is hard to overstate the importance in this change of attitude. In The Joy of Tax I argued that tax is the single most important instrument available to any government to shape the social, economic and political environment in the state for which it is responsible. I think this conference succeeded in recognising that fact (and the book got a couple of mentions along the way, and not from me). Taking tax out of the technical arena and putting it into its true context has long been a goal for those engaged with tax justice. This conference appeared to be a step forward in that respect.

But I won't go so far as to say all relevant issues were addressed. It was still assumed that tax does raise the revenue to pay for public services when that is not true. All public services are in reality paid for by newly created money which is then reclaimed from the economy by taxation. This was not discussed. As a result the true capacity of money to act as a macroeconomic tool, and the need for tax to be considered as an essential component in the money creation / fiscal stimulus debate was not addressed. That, I suggest, should be the topic for another occasion. But for now I an pleased that the EU is seeing tax in its true light. The Joy of Tax is being appreciated in Brussels. I can't complain about that.