Libertarian meat eater, right wing in the sense of conservative with a small c.

Friday, 18 April 2008

Through the looking glass

We had a friend over for dinner last night and as the conversation does tend to when I'm around, we got onto politics. She made a statement that made me slightly aghast regarding taxation:

"I don't resent paying taxes because I don't view the money as mine in the first place"

Admittedly she works in the public sector but when I pressed that point she insisted that whether in public or private employment, she still feels the same way. Her argument was that employers pay according to what they can afford in order to get someone to do the job and she would be just as happy with her post tax income whether under the current situation or receiving a lower pay packet that was not taxed. It's a fair enough point on one level, if I give you £1 it makes no difference if I hand over one coin or give you a fiver and demand £4 change.

At this point vodka and a vital game of Halo 2 intervened so I let the subject drop. However I believe that her view is based on a fundamental misunderstanding. The situation described above is not what is going on. Instead of being offered £1 and paying change, you are being offered £5 and a third party, (government taxation), comes in and nabs £4. The fact that so much money goes into the pathetically inefficient government coffers, (see diseconomies of scale), makes us all poorer and depresses wages and GDP growth. A cut in, or abolition of, income tax does not allow employers to drop their wages because they would lose their staff to competitors. It would however, make us richer.

The other problem I have with her view is that by not seeing your pre tax wages as your money you have no incentive to hold the government to account for wasting your hard earned dosh. "What they've just wasted £X Billion on idiotic IT projects? Well I don't care it's not like they're wasting my money.", but they are. The money you earn is yours to keep unless there is a very good justification otherwise. Government should be held accountable for every damn penny they extort from us because the best person to spend your money is you.

The other weird view for this post comes from Neil "I fail to understand the basic concepts of Liberty" Harding, who is raging against the rumour that Boris wants to overturn the smoking ban in London, (not that he has the power to do so but it seems that all the candidates enjoy promising things they have no power to deliver, so we'll forgive him that one).

Neil, of course supports the smoking ban on the basis that he likes to go to places that are not filled with smoke. Fair enough but what takes the biscuit is that Neil has previously argued that the smoking ban increases Liberty and this time has come up with another gem:

"If you think this is a civil liberties issue (it isn't)"

Yes it is. It is obvious that it is because it's a restriction on peoples behavior on privately owned property whether or not the owner wishes such behavior to be allowed. I have argued with Neil about positive and negative liberty before and he seems unable or unwilling to grasp the point that a ban on things that do not cause harm to others, (even if you believe that passive smoking is the very scourge of the devil then you are not forced to go into smoky environments), cannot enhance but only diminish Liberty. By all means, support the smoking ban because you don't like your local to be smoky, or because you just hate smokers, or because you a nasty, sanctimonious little cunt but don't deny that it is a civil Liberties issue nor that it reduces Liberty.

1 comment:

Thon Brocket said...

People in the public sector don't pay really pay tax. They can't. Their "deductions" go straight back into the same tax pool from which the whole of their emoluments are paid. It's a book-keeping trick.

Take a jobsworth whom the State pays £30K a year. That's achieved by paying him a nominal £45K and taxing him 33% - £15K (rough figures, OK, but it's the argument that counts). But they could get exactly the same result (£30K net transfer) by paying £90K and taxing £60K (67%) ; or by paying £30K and taxing at 0%.

The tax-rate can be set at any level and achieve the same result - which demonstrates that the whole construct is bogus.

This mechanism is absolutely different from taxing a private-sector income. You can't change a tax-rate without changing the net amounts passing between the state, employee and employer.

So when your CS chum says "I don't resent paying taxes because I don't view the money as mine in the first place", she's about right. What she doesn't get is the difference between her and somebody who actually does something productive for a crust.