Monday, February 15, 2010

The T Word

"And it came to pass in those days, that there went out a decree from Caesar Augustus that all the world should be taxed." (Luke 2:1, King James Bible, 1611)

"At that time the Roman emperor, Augustus, decreed that a census should be taken throughout the Roman Empire." (Luke 2:1, New Living Translation, 2007)

Just like NuEverything, New Bibles don't like to mention the word tax. Much better to call it something else, like census*.

NuLabour have been absolute shockers at this, deploying all manner of weasel words to disguise swingeing increases in taxation. Stealth taxes have been at the very heart of their approach to public finance.

Take National Insurance. The very term is a serious misnomer, because whatever the original Beveridge intentions may have been, these days National Insurance is simply weaselspeak for Jobs Tax. And whereas Labour inherited a combined employer and employee NI contribution rate of 20% (contracted in), as from next April (2011), the rate will be 25.8%, an uplift of well over one-quarter.

Combining that with their stealth changes in NI contribution bands, by next year Labour will have increased the Jobs Tax by around 120% since coming to power. And to put that in context, money GDP will have increased by only 85%.

Or take the issue of charging for services that were once "free" or heavily subsidised. From passports, to planning applications, to dentistry, charges have been soaring.

As we blogged here, local authorities have been prime movers in this. Over the decade to 2007-08, Council Tax in England rose by 80%, more than four times the general rate of CPI inflation. Yet at the same time, councils increased service charges - for everything from parking to pest control - by 120%, about seven times the general inflation rate. And the revenue from charges is big - it's now equivalent to over 50% of that raised from Council Tax itself.

Now, as a matter of principle, we actually applaud charging for services - as far as possible, users should pay for the services they use. But what sticks in our craw is that we're effectively being charged twice over. Charges have risen but taxes haven't been cut. In reality, there has been a disguised increase in taxation.

And now we've got this row over the new Death Tax, or compulsory levy as Health Secretary Burnham wants us to call it.

What exactly is meant to be the difference between a compulsory levy and a tax? Presumably it's the same sort of difference that distinguishes the Telly Tax from a tax - ie in economic substance there is no difference (which is why the ONS now categorises the TV licence as a tax).

Of course, we all know why Burnham doesn't want to call it a tax - it's the same old stealthy tax spin that won Labour three elections.

But in these final dying days, he's surely lost the plot. Because to us "compulsory levy" sounds even worse than the good old English T word - it sounds more like the kind of thing the Sheriff of Nottingham used to impose on the oppressed villagers of Sherwood, right alongside other abominable foreign practices like droit de seigneur.

PS Despite all the flak he's taken, Lansley was quite right to walk away from the supposed cross-party consensus stitch-up on this new tax. We all understand that care for the elderly is a growing problem, and it's getting increasingly expensive. But why should it always be taxpayers who have to step into the breach? Why can't we say that individuals and families have to find ways of funding this care for themselves? Of course, there will always be some people who will ultimately need taxpayer help, but we must draw a line that says people are expected to help themselves. Taxpayers cannot be loaded up with yet another long-term funding disaster. And there needs to be an open political debate about this, not some back room deal.

*Scriptural authority note Yes, yes, we know it was a census. But the only reason Augustus ordered a  census was so he could tax everyone more thoroughly. He'd got fed up with being ripped off by sub-contracting tax-farmers, and wanted his own tax collectors operating on a properly documented accountable basis. He was in fact the man who invented modern taxation, including a death tax, which was set at 5% to fund retirement pensions for Roman soldiers.

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