Four Cheers for Paying Tax

The economist Milton Friedman, who many people would cite as the Godfather of Neoliberalism, observed on a number of occasions that tax taken from an individual without their consent amounts to theft by the State. This particular notion has been firmly embraced by the rich and influential who have responded in a way that suggests they see it as their moral duty to avoid or even evade paying tax wherever possible. Nobody, they would have us believe, wants to pay tax and so it is entirely legitimate to dodge it wherever you can. The delightfully named Lord Fink, giving us a glimpse of his substantial brass-neck, said in response to accusations that he was dodging his tax responsibilities:

“I didn’t object to his use of the word ‘tax avoidance’. Because you are right: tax avoidance, everyone does it.”

Whilst I’m entirely prepared to believe that in the circles Lord Fink moves everyone is busy trying to avoid paying tax, I would like to put on record that he does not speak for me. Nor, I believe, does he speak for a substantial majority of the population. Fink is able to say what he does because he doesn’t even question whether it is morally right to avoid tax – he simply takes it as axiomatic, a proven truth. To him tax is nothing more than a levy on his hard work that the State will take and waste on scroungers and wastrels who are the lazy architects of their own misfortune. In the world of the neoliberal establishment immorality isn’t avoiding your collective duty to pay tax, it’s paying tax to support feckless, failed individuals and bleeding-heart social institutions.

This idea that there’s something clever and noble in not paying tax has leached its way into the wider culture. Vilifying ‘the tax man’ has become a mantra for successful people across all our sport, entertainment and business worlds. How dare the Government think it’s right and proper to take my money from me when I’ve earned it by the sweat of my brow or the massive talent I have? That must be right, mustn’t it? Myleene Klass thinks so, Gary Barlow clearly thought so, Jimmy Carr thought so…….the list goes on and surely they can’t all be wrong.

Well, yes they can. For me, this is an Alice in Wonderland version of morality. Not only do I think I should pay all the tax that is due on what I earn, I’m proud to pay tax and genuinely delighted that I live in a society where the idea of progressive income tax underpins everything we do. I don’t have children but I’m delighted that my taxes go to helping support other people’s children. Both of my parents are dead but I’m delighted that my taxes go to supporting the elderly care of other people’s parents. This isn’t an issue of finance or budgets or personal probity – it’s an issue of what kind of society you want to live in. I’m proud to pay tax because I’m committed to the idea of our interdependence as a community. I pay tax to the degree I’m flourishing and I only flourish because of other people and not in spite of them. I hold no religious faith but that doesn’t stop me from thinking that I owe a debt of gratitude to all the people I live amongst and who I will need to rely on when times get tough for me.

It is often argued by the apologists of the tax dodgers that if they have to pay higher rates of tax than everyone else it becomes counter-productive because they are rich enough and clever enough to find ways to evade their commitments completely. Keep tax low enough, the argument goes, and we will stay in the country and pay it; raise the levels of tax and we’ll do a bunk or pay an accountant to find a cunning loophole that will allow us to salt the money away. Are we really expected, as a society, as an interdependent collective of people, to have our tax policies and our social spending dictated by a rich elite that simply demands a morally bankrupt form of special treatment? It seems to me that we have very few political representatives prepared to call their bluff on this. Levels of tax and the circumstances in which the payment of tax should be made cannot be dictated by those who have one objective – to pay little or none of it.

Denis Healey, the former Labour Chancellor of the Exchequer, is frequently misquoted as saying that he would tax the rich until ‘the pips squeak’. Healey wasn’t all that radical in fact – what he actually said was that he would squeeze property speculators until the pips squeaked, which is a very different proposition. However, I’d like to resurrect the principle of the squeeze on the rich. If in reality I have a choice between the rich paying more and the systematic devastation of our community infrastructure, I know which one I’ll go for. I’d rather have some public libraries than watch the rich stock their wine cellars and expand their fleets of yachts. Income tax rates for the rich are lower now than at many other points in the years after the Second World War and in the period before the 2008 economic crash the rich enjoyed a bonanza of constantly reducing tax rates – and it can hardly be argued the results of that were unparalleled prosperity for all. In the post-crash world those who have best been able to defend their incomes are precisely the ones who need to throw more into the pot.

I can almost hear the clamour of those who will decry this article as an expression of ‘the politics of envy’ or as ‘rich bashing’ or claim it’s economically illiterate. I’d prefer to discuss what it tells us about the sort of society we want to live in and how I explain to someone trapped on an income that doesn’t feed them, house them or keep them warm why it is that people living on £200,000 week think they shouldn’t be paying a bit more.

Terry Potter (originally posted March 2015)

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