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Taxes are probably inevitable. Without advocating an anarchic restructuring of the entire framework of society some form of government looks both likely and desirable, and that government is going to need funding, hence... taxes.
The question therefore becomes what do we tax and to what extent. Imaginative and cunning Chancellors have found all manner of things to tax over the years, we pay tax on our income, on our consumption, on the fuel we use to drive to work, on the energy we use to heat and light our homes. We're taxed for having a home and more for having more than one. We pay tax on the interest or dividends our savings earn. In fact we even get taxed when we die.
A somewhat inaccurate, but never-the-less amusing (read worrying), way to illustrate all these combined is Tax Freedom Day. Up till Tax Freedom Day everything you earn in the year gets paid away to the government in one form or another (though this does freight with the caveat that you get to keep everything you earn after this day). TDF in 2012 was the 29 May 2012, or as a percentage 38% of what you earned this year will be paid as tax.
The important thing to note from this is that the average person pays 38 per cent. That's not £6,500 or £88/month or some other pound sterling figure; it’s a proportion of their total income. From this it follows (with elegant simplicity to coin a phrase), that if your total income is higher, then your contribution will be higher. By the simple usage of a % figure, rich people pay more tax.
This appears to have by-passed a large section of politicians who continually make speeches (or at least publicised rants) about how the "rich" must pay more, how they must contribute more than the average person, and how its " " fair " " that those with more resources take a larger share in maintaining society. The elephant in the room is that they already do!
To illustrate this point further here are some figures (tax takes calculated using the HMRC PAYE Wage Income calculator);
Current Situation:
Plebe A: Earns £15,000, pays £1,379 or 9.2%Pleb B: Earns £25,000 pays £3,379.00 or 13.5%
Pleb C: Earns £40,000 pays £6,379.00 or 15.9%
Patrician A: Earns £100,000 pays £29,884.00 or 29.9%
Patrician B: Earns £500,000 pays £228,126.00 or 45.6%
As this shows, it’s not just the total contribution that goes up; it’s the overall % of your total income that goes up as well.
An alternative way of looking at this is that Patrician B above earns the same about as 20 people all equivalent to Pleb B. The 20 Pleb B's pay £67,580 in tax between them, Patrician B, on their own, pays more than 3 times this amount. Taken to extreme lengths, 34 Pleb A's will earn slightly more in total then the single Patrician B, but will, between them, pay less than a quarter of the tax bill.
We don't just expect rich people to pay more, we expect them to pay more than would be raised if that wealth was shared out between a smaller numbers of lower earners - in effect we punish anyone who rises above the herd. The message to all the entrepreneurs, leaders and geniuses out there is pretty clear - Britain doesn't like success.
Rather than belabour this point anymore (by now your either convinced or your stating equality of income as a priorii desirable, and unless you have a reasonable response to the levelling down objection there isn't much point in continuing), I instead want to end this post with something I call the "desert island" scenario.
Three people are ship-wrecked on a (remarkably well equipped) desert island. Ignoring any advice they may have received regarding immediately dispatching any other survivors each sets about trying to ensure their survival.
Islander 1 (called Timmy for arguments sake), settles in for the long run, he finds a source of fresh water and builds a temporary dam to create a drinking pool. He builds a wind break in front of a dry cave, and creates a fire pit and other shelter. Finally he explores the island and finds various sources of food, including some things which are miraculous preservable, and therefore begins to build up a winter store.
Islander 2 (let's say this one’s called Jonny), isn't an industrious as Timmy, and doesn't make such long term plans. He builds a quick shelter to keep of the rain, and relies on the fact that it’s warm and sunny. He finds things to eat but doesn't do much in the way of storage or long term planning.
Islander 3 (called Spike), doesn't bother with any of this. Instead he sleeps on the beach, and pesters the other two islanders for food. He makes no preparations or helps with any of the day to day tasks the islanders have to do.
Things trot along for several months; Timmy has improved his cave to the point where it’s a small house, complete with a door and chimney meaning he can keep a fire going through the lengthening evenings. Jonny is minding his own business but is starting to suffer in the evenings as the conditions worsen. Spike has managed to get Timmy to let him sleep in his house, and still relies on the other two for food.
As winter hits properly the three islanders meet for a meeting on what they are going to do next. Jonny and Spike decide it’s only fair that since Timmy has the most food and the best shelter he should help the other two through the winter, after all he's been lucky enough to find and store food, and it was pure good fortune he took the time to improve his cave - so it’s only fair he shared the benefits out. Having come from a fantasy land ruled by democracy the three have a vote, and Jonny and Spike vote 2-1 that Timmy should share all his stores out.
With little else to do, and no chance of getting an alternative outcome, Timmy is forced to open his his house and share out his food.
A few months later everyone dies when the food runs out just before the end of the winter.
The morale is of course; if your ever stranded on a desert island, first kill any online socio-political bloggers before they get you, secondly, get rid of any democrats, and finally get rid of anyone who will try to tell you they have a right to take something you built up while they lazed about.
/Happy Blue Moon Day,
Zarl
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