Knifonomics (part 12): do what you’re told.

Speaks for itself...

There are several arguments against high levels of taxation, specifically in the UK the top 50% rate, which of course is under further scrutiny.

One argument is that it doesn’t actually raise money – which is probably true. Another is that it may be a major disincentive to business and wealth creation – also true. The best one is that it’s just wrong, as in why does the government think it knows best how to spend our money? Why can’t we decide for ourselves, barring genuine necessities.

Here, the great Thomas Sowell offers a good example of this, with a compelling case for more freedom in the provision of health care, which even though I work for the NHS, I recognise as a good thing, even though it might mean less cash for the service (not necessarily a problem, which is for another post). **

The best overall case for this less government/more freedom argument that I’ve read recently is in today’s Scotsman, of all places, by Bill Jamieson. A taster:

“Taxation of private incomes, even those of the highest, is never to be undertaken lightly. This is especially so in the modern age. For I believe the pendulum has swung far too far away from liberty towards democracy; from respect for individual freedom to the needs of an insatiable and greedy state….

…Gordon Brown’s chancellorship and later premiership represented in my view everything that has gone monstrously wrong with this country – an acceleration towards a financial and political collapse. He saw nothing wrong in exacting in his first budget a tax on the income of pension funds, a stealing – and I do not flinch from that word – from long-term savings contracts entered into by millions of people to provide for some comfort in their retirement. That one act took £5 billion a year at a stroke from the pockets of savers. Never mind the problems it created for pension funds and their beneficiaries. That’s tomorrow’s problem. This tax had the political virtue of being invisible. That did not make it morally right….

…The logical end to this – and I do believe we are not that far off this now – would be for the whole system of “private income” and “earnings” to be scrapped and for these to be paid direct to the Treasury. And it would be left to the Treasury, and for its officials working in tandem with Her Majesty’s Revenue and Customs, to dispense small calibrated personal allowances to each of us for spending. If the state knows best how to tax it is because it knows how best to spend. So why not let us go to the logical end of this journey and pay all our money to the state directly?

So, we’re all doomed without economic growth, that growth is stifled by high taxation, and above all that,  it’s wrong.


** Here is another example of why the NHS just might be improved with a different approach to funding.


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