In a liberal democracy the purpose of taxation is to pool the resources of the many to pay for essential things which no one person could, or would, subsidise. It differs from insurance where the premiums of the many pay for the misfortunes of the few. In insurance you only benefit if you suffer a loss. From taxation everybody benefits.
In the earliest forms of such democracy the big two uses of taxation were defence and justice (including policing). Education and health were relatively late additions. Support of the arts came earlier but this highlights the sort of people who were making the rules.
Now, here’s an interesting experiment that gets conducted fairly regularly. Ask people if they are paying too much tax and they usually agree. Then, ask people in turn whether there should be more or less tax paid on each area of public life separately and, apart from subsidy of the arts, most folk want more spending. The business of government can be summarised as convincing the people that you are investing more in everything from a diminishing pot.
Of course where Thatcher was wrong is that a country is not like a household where the books always have to balance. It is wise to borrow to invest. There is a magic money tree. Austerity, when interest rates were at a record low, was the second stupidest thing the Tories did 2010-2024.
Now, to use yesterday’s concluding question, how much tax you wanna pay?
(I recommend Ian Dunt’s ‘How To Be a Liberal’ from 2020 on this)
No comments:
Post a Comment