The abolition of the 10% band affects only the first £2,230 of taxable income, so the additional tax is £223. For most taxpayers, this is offset by the reduction in the basic rate from 22% to 20%. For someone earning £25,000 the overall tax reduction is £175, but someone earning £15,000 will be £28 worse off.

David

I see taxation as an evil, as legitimised theft by the State, as a vicious means of punishing the industrious whilst redistributing the booty to those lazy courtier groups it favours.

How do you think the British Army should be financed? Or policing? Or the Monarchy?

No wonder Gordie left the country for a bit.

'I see taxation as an evil, as legitimised theft by the State, as a vicious means of punishing the industrious whilst redistributing the booty to those lazy courtier groups it favours.'

Somebody has to pay for sending in those planes you call for.

One for me and four for you, Taxman..

Of course the 'welfarians' will acknowledge and support the governments right to all and everything that a person may earn or possess. Particularly the socialists who pay scant recognition to individual rights, - unless, of course those affected are in far away places such as China and Tibet, then the debate is all about 'human rights' for the individual.

However, most intelligent folk would agree that some taxation is necessary, and that the government's share or annual tithe should be kept to a minimum, but that it should be spent prudently.

Of course there has to be some taxation, and as the original idea of raising taxes was to pay for the defence of the Realm, it was seen as being vital to survival of the nation, and was accepted.

That politicians have seen fit to continually raise the levels of taxation, mainly to finance various welfare schemes, including their own welfare, I might add, brings taxation into the realm of theft, - legalised, but still a theft.

The aim should be for minimal government, their remit being stability and security, which, of course includes financing the military, all the rest of their 'worthy, but ineffective endeavours', are just social engineering, which, although expensive and extravagant, does have a certain vote garnering quality.

Given that they - the government, - have made such a mess of their original remit, and practically everything else they have touched with their poisonous, sticky little fingers, it is hardly surprising that many honest people regard taxation a theft...and yet the gullible still see the government as 'their friend', when it is obvious that many of todays problems are entirely of their making...

p.s. Perhaps if politicians had to do an honest job, they might appreciate the real value of that which they dispense so casually...

Ernest

I'm with you in the low-tax camp. The problem is that governments have gone from providing essential services to using our money to buy votes.

I see defenders of legalised theft ask how the military, or policing or the Crown would be financed without taxation. Why no soul searching about your 5-a-day cottaging outreach workers will be financed? Let's have the demands for toenail cutting advisory services, all those quangoes you obviously cannot function without and do let's hear it for the oh-so-important climate change task force at the town hall.

The military, police and Crown are a piffling draw on our wallets. When the Leftists shut up, shuffle off and leave the way clear for decent conservatives to govern again, there will hardly be a need for the police and half of the Crown functions anyway.

Most of the delinquents, hooligans and wrong'uns queuing outside the courts for a ticking off are the products of the Left's Godless welfare state. The rest are the Left's labour-voting immigrants.

Government, formed to do collectively only that which we cannot do individually, has ballooned monstrously over the last century. Fewer civil servants administered the greatest empire the world has ever seen than now work for any one London local authority. As it's expanded it has become more of a burden on us not only because we have to pay for that expansion and to keep it going, but this expansion has led directly to the welfare state, a balkanised nation, millions of infantilised Britons and the vast costs of an uncivilised, barbaric nation.

I see I'm a leftist again. It's hard to keep up.

Pete Moore,

"I see defenders of legalised theft ask how the military, or policing or the Crown would be financed without taxation. [...snip red herrings...]
The military, police and Crown are a piffling draw on our wallets."

In other words, a little "legalised theft" is OK, as long as it is done for things of which you approve?

What is your justification for any 'legalised theft' at all? Spare me the legitimate functions of government crap - theft is theft, right?

The only purpose that the State should come looking taxed from any of us is to maintain the rule of law, and protect the Nation. End of taxation.

Hang on - what about the transgendered Ukrainian outreach programme...yeah, and that, of course. Then there's Gordon's million strong public sector army...and PR men for failed PM's...oh the list goes on. WHY should we be taxed?

Frank O'Dwyer -

Yes, theft is theft. Of course, the police, military and courts would require funding and if this is met through general taxation, it is met through theft. If I regard myself as honest there's no getting away from it.

Now lets look at tax, the growth of governmant and at what may be trimmed.

If government spending had not exceeded inflation after 1997, we could now do away with an awful lot of tax:

If the government sector had grown only in line with inflation, rather than far above it, taxpayers would be £200 billion better off – enough to abolish income tax, corporation tax, capital gains tax and inheritance tax. Just think what that would do for our international competitiveness.

http://www.adamsmith.org/blog/tax-and-economy/tax-freedom-day-2008-200803131051/

Would you be better off without income tax, Frank? I think so! In fact you'd be better than better off, because your employer could invest that which gets taken now as corporation tax and invest it, grow the company and create jobs. You'd then be earning more, maybe, than your untaxed salary. Then when you and the missus decide to buy a bigger place with your bigger earnings you won't be clobbered with CGT. Leave your lovely new home to your children and they won't have to flog it to be shaken down by the state nder the guise of utterly immoral inheritence taxes.

What a winner that is Frank, and all the government had to do was peg spending to inflation after 1997, when the state was already bloated so much by a century's expansion we couldn't escape it.

If I suggested to you that income tax ought to be abolished you'd think me mad, no doubt. But all that would do is reduce that state's tax take to 2003 levels. Most people would benefit by hundreds of Pounds a month, some by thousands, by abolishing income tax, yet somehow it's an idea deemed mad.

What's mad is the (I suspect deliberate) lack of imagination here. Abolish all those taxes and the state has to do what all of us has to do - live within its income.

The British state, being the servant of the British people, has no duty at all to foreigners. Foreign visitors to our great and ancient land can be taxed on a sliding scale. Call it £5 or £10 a pop for tourists, £100 a load for lorry drivers etc and the money soon rolls in. Combined with a competitive sales tax economy, set at the local level to encourage competition, and you'll soon have enough money to pay for the military, police and courts.

Bingo, there's your money, not taken at source from Britons, levied on consumption and topped up nicely by Johnny Continental.

Vote for me.

Then when you and the missus decide to buy a bigger place with your bigger earnings you won't be clobbered with CGT.

Pete

There is no CGT when you sell your main residence, but don't let an inconvenient fact get in your way.

Peter -

Yes, you're right. It'll come as no consolation to Frank O'Dwyer, however, who may have been able to afford a nice little gaff by the sea if Gordon Brown hadn't decided to build the total state.

Knowing that you hate to agree with me like to test my arguments, I'll take it you have no problem with the rest of my post.

Taxation and expanded government has alot to do with monetary policy and the central banking system.

The banking system has our governments in its pockets and it functions largely by ensuring governments take out large loans. it is not concerned with the validity of the project that requires the money. only that the money is borrowed and that the interest is paid off. and ofcourse the kicker is that our taxes pay off the interest.

cut out the middleman and bring monetary production back under public control and let the state lend the money. then use the interest to replace much (if not all) taxation. The state can also lend itself the money at no interest for large projects like infrastructure etc.

There is of course no such thing as legalised theft, unless you consider the very existance of the state or government to be unlawful. As long as we accept that govt. has the right to pass legislation compelling private infoviduals and bodies to contribute to a national exchequer then the govt we elect can choose perfectly lawfully whatever limits it wishes.

Colm,

The concept of 'legality' needs a definition when used in such a rhetorical debate, something a little more definitive, - to catch the mood of the debaters, if you will.

There at least three types of 'legality', the moral, the judicial, and the legislative.

The moral kind is perhaps more personal, while the judicial kind is built on the body of law built over centuries, and usually refers to crimes against the individual, his property, whether private or commercial, and society in general

The legislative kind is that passed by government, ostensibly to enable the proper functioning of the day-to-day running of the country, but being used evermore as a tool for social engineering.

It is this last category that gets labelled as 'theft'. If one accepts that a fee (tax) is charged, to pay for such services as security etc. and is willingly paid, it is not theft, but when it becomes abused and gets excessive, and is used basically for the government's self-interest, it then becomes unacceptable, and is not willingly paid, - it is a coerced payment, - pretty much the like a mugging, - and becomes a 'theft'.

Given that there is such a discrepancy between what the government sees as legitimate spending and what the public sees as spendthrift waste, and particularly when such tax is raised as a control measure to change people's lifstyles, it is hardly surprising that such taxes are seen as theft, and the people who implement them as no better than thieves.

Apologies for such a convoluted post, but I am sur eyou get my drift...

Ernest

I am not agreeing with the amount that govt. taxes us. I completely agree that it is too high and is certainly largely being used for purposes of social engineering. I only meant my comment in the sense that, the people elect the govt and it is up to us to elect politicians who think and act differently and who will reverse the levels of taxation. So long as we fail to do that then we can't claim the current tax system to be theft.

The conservative party continually campaigns on a manifesto of tax cuts, and what happens? Labour smears the planned cuts as "cutting back on essential public service spending", and the gullible electorate take fright and believe it.
Oh yes, we would much rather retain our wonderful NHS (which now kills more people per annum than traffic accidents) than risk having a nice tax cut (which we could spend on a BUPA policy, for example). Ah well, as John Lydon said "this is what you want....this is what you get".

Anyway: Hot tax-saving tip from this week onwards! :-
If you're employed and a basic rate taxpayer, and you're also the director of a small ltd company with profits below the Class 4 NIC lower limit, then do your "private" work as "self-employment income" rather than through your company, and pay income tax at 20% on the profits, rather than CT at 21%. A small loophole, but as they say, look after the pennies....
(if your company's profits would attract C4 NIC if done as self-employment, then continue to use the company).

Pete Moore,

"If I suggested to you that income tax ought to be abolished you'd think me mad, no doubt"

That is the first time I've heard the insanity plea for being a libertarian, I admit. (As you probably know, the idea you sketch is actual policy for the UK Libertarian party.)

There is nothing wrong with such a proposal in principle. They are interesting ideas and they should be debated on their merits. What I object to is the doublethink of 'tax is theft, so we'll have a sales tax'. If you really think that tax is some kind of mugging then I fail to see how mugging is OK when I buy something. Nor do I really follow the logic that says it is OK to mug tourists.

To my mind the only coherent argument for tax is to provide for the cost of public goods. The argument then becomes one of economic efficiency, fairness, and of what is a public good in the first place. The extreme cases are easy. Almost nobody trusts that the market or charity can provide the military and almost nobody trusts the government to provide supermarkets. In between you have stuff like roads, health, welfare and education, where nobody really trusts any of the options and it is really a question of which approach is the least bad.

While it is nice of you to propose that the best tax is one that makes Frank O'Dwyer as wealthy as possible, I don't think that this is really the test. Me, I would happy with tax that is principled, fair, as low as possible and least onerous in terms of administrative burden. Any system is going to fail those tests to some degree and the current one certainly does.

I'm not totally convinced by the 'abolish income tax' idea as it's not at all clear to me what the consequences will be. All that extra money will go somewhere but it is not obvious where. Some of it will likely be taken as extra profit - i.e. gross salaries might simply reduce and the difference will go to the employer. Not that profit is a bad thing, but some of that will leave the country. As for the idea that I will suddenly be able to afford a country retreat, I won't be the only one with cash on the hip wanting to do that, so the price of that could go up. So will prices in general, unless supply also increases.

The idea of taxing 'foreigners' may simply destroy tourism and raise the price of imports - the result of that is the stuff we want costs more, and we get poorer. Last but not least, income tax is already a form of sales tax (on our work) which gets passed on to the consumer. So this is not really about abolishing tax but just an argument about the most efficient way of reducing it. This should be debated on the evidence and ideology just gets in the way. Similarly it is more productive to discuss specific government proposals that can be axed rather than speak wistfully of small government and tax being theft.

Incidentally of all the taxes we currently have the biggest pain in the ass for those who have to administer it - mainly small businesses - is sales tax (VAT). On this basis alone (I have to do VAT every quarter) the idea of yet more sales tax doesn't fill me with the joys of spring.

That said, the Libertarian's slogan of 'Tax doesn't have to be' is a gem.

I can't argue with Frank's presentation of the issue. The basis of politics in any western democracy where you draw the line on government and a different line may be appropriate in different circumstances.

I believe in markets and would like to see the government getting out of large areas of the economy. But when markets have done their job and reduced the number of people who need help from the state the remainder are going to still need assistance. The state will have to be either a provider or buyer of services for the poor if we are to have a state worth defending.

I ... would like to see the government getting out of large areas of the economy.

Henry, they already did that and we now have a "credit crunch"* and the looming possibility of recession. and im not for absolute state control of the markets, but its quite obvious that the markets need regulated and for those regulations to be enforced. because once again the banking institution looks set to destroy everyones hard work, run away with the fruits of our labour and ask for hand outs in the leaner times.

* they can call it what they want, but in truth its a deliberate restricting of the outflow of money. money the banks never had in the first place.

Excellent comment, Frank (Monday 11.00 pm)

I also sympathise with your sales tax plight. I have to make a VAT return every month. Last year I filed late 9 times out of twelve and had to pay a fine/surcharge each time!

Frank O'Dwyer -

My salary is the business only of me and my employer. The state, being only the collective expression of people who have no moral claim on my labour, doesn't have my permission to take a penny. Therefore when it taxes me it is theft. But as I said, this is problematic when advocating even minimal taxes for a minimal state. When I come up with a solution which doesn;t require rhetorical games I'll let you know.

In the meantime, a sales tax is less morally repugnant. That income tax (for most) is taxed at source implies that the state is the primary beneficiary of our labour, even before ourselves. Also, although we must buy goods, a sales tax does allow choice on whether to make any purchase at any time or between competing products.

All foreign visitors are fair game for a fair tax. The British state is obliged to serve Britons only. If it can advantage us at a foreigner's expense it ought to do so. I have no problem philosophically with a foreign state stitching me up at Johnny Foreigner's expense. I can travel there or not.

It's interesting that taxing foreigners may necessarily destroy tourism (which I doubt very much). No doubt you think that taxing the non-doms will see wealth flee too.

Under my benevolent dictatorship VAT will be abolished. It is a foreign tax and quite illegal.

While it is nice of you to propose that the best tax is one that makes Frank O'Dwyer as wealthy as possible, I don't think that this is really the test.

For you it ought to be. The notion that politicians know best how to spend your money really is quite perverse.

I'm not totally convinced by the 'abolish income tax' idea as it's not at all clear to me what the consequences will be.

The state will have to live within its bloated 1997 trousers. That's when we had a marginally less inefficient NHS, plenty of coppers and a larger military than now. There was even enough in the kitty to employ a few cottaging outreach workers.

Doesn't a system based on a 'sales tax' have more benefits than a tax based on income?

A tax on income, by it's very nature must be in some degree anti-incentive, and is non-discretionary in it's collection.

A sales tax on the other hand is only levied when an expenditure is made and is therefore largely discretionary. In might even be seen as an antidote to the rampant consumerism that so many lefties love to whinge about, it might also encourage people to start saving again, as interest earned would not be taxed.

The essentials of life can be zero rated, and the rate can be increased as the degree of extravagance is perceived by the exchequer, - leaving the Chancellor with the impression that he is still in control of revenue, a feeling, I am sure he hasn't experienced for some years

Such a system would certainly be a lot fairer than the current one, as everyone above poverty level would contribute something.

Instead of evermore complicated tax returns, all we would have to do is keep records of expenditure, to prove that tax has been paid 'at source'. Businesses would have to keep records of sales, - which they already have to do, life would be much simpler for everyone.

As for avoidance, there is already a system in place for catching the dodgers, and it would be easier to prove evasion.

There are many places that have such a system, including several of the American States, and it works surprisingly well.

Income tax is favoured by governments, mainly because that is what they are used to, but that doesn't mean it is still the best system.

Pete/Ernest

Are you familiar with Cllr Tony Sharps blog

100 years on and still accurate

In his latest blog he covers the Mail on Sundays article showing conservative posters from 100 years ago. A couple he highlights are interesting in themselves

Kloot.

Those posters from the Mail are doing the rounds of many blogs right now.
The first one is very apt indeed, and worth printing off from the Mail site itself.