JASMINE BIRTLES: The 'joy' of tax - no, really!

31 March 2020

We might wonder momentarily where the tax that we have not managed to wriggle out of actually goes.

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“If you make any money, the Government shoves you in the creek once a year with it in your pockets, and all that don’t get wet you can keep.”

So said the American comedian Will Rogers. And that comes to mind at this time of year, when we all kid ourselves we are getting one up on the Government by putting extra money into our pensions and Isas and making sure we have given away £3,000 if we were going to (where do we find all this money?) before midnight on 5 April. We are doing our best not to pay any more to the Government than we have to. But somehow, they still get us in the end. Really, a person doesn’t know how much she has to be thankful for until she has to pay tax on it.

Making the most of tax-efficient products is still an excellent idea – assuming you actually found enough fivers down the back of the sofa to put into these helpful savers. But as we scramble to keep cash out of the Revenue’s pockets, we might wonder momentarily where the tax that we have not managed to wriggle out of actually goes.

Because you need to know where your tax money goes. You are a hard-working taxpayer, so you have a right to know. That’s why we are always called ‘hard-working taxpayers’. Not shiftless, clock-watching, self-centred, so-called workers who would definitely hide our vast wealth in an offshore account like the rich people do, if we knew how to do it without getting caught (sorry, Jimmy Carr).

We’re paying enough of it too. Last year, according to the Adam Smith Institute, ‘Tax Freedom Day’ (the day when, in effect, all our taxes are paid and whatever we earn after that we get to keep – whoopee!) was 29 May. So for almost five months we were simply working for the Government. After that date, our money is our own to do what we want with: stick it on the dogs, spend it in bars, buy a nuclear deterrent, you name it…

So it is interesting to know that the biggest chunk of our tax money goes into welfare, at £240 billion (including a massive £111 billion spent on pensions, a figure that will only go up while the elderly continue to vote Conservative and the youth continue to vote Love Island). This is followed by the NHS at £145 billion, and then £102 billion on education. Surprisingly, the controversial defence spend is a paltry £46 billion in comparison, closely followed by a staggering £39 billion a year in Government debt interest. Who are they borrowing from? Wonga?

As for who should be paying the most tax in this country, that’s something that Brits are surprisingly united on. Surveys have found most Brits believe the highest levels of tax should be paid by “someone else”. If “someone else” started paying their dues, the rest of us could keep more of our hard-earned and wouldn’t be looking for offshore islands the Revenue hasn’t yet heard of.

And that, in a nutshell, is why we have to have taxes. As Oliver Wendell Holmes Jr said: “Taxes are what we pay for a civilized society.” No one wants to pay them so governments constantly look for ways to get it off us without argument. Hence the ‘joy’ of inheritance tax.

Imagine what it would be like if our taxes were voluntary, like charitable payments. What if we could decide whether we really wanted to pay for pensions, or for the shiftless unemployed (the actual bill for them is just £2 billion by the way), or just give the whole lot to dogs homes because, let’s face it, dogs are nicer than most people.

We would find ourselves accosted by tax ‘chuggers’ springing on us in the high street, with a beaming smile, saying “Hi, I wonder if I could have a few minutes of your time to talk about paying for the nations’ basic needs, such as infrastructure, hospitals, schools and an independent nuclear deterrent. We’d only take a third of your wages, and then ask you for a lot more whenever you buy anything, or use the roads. Can I count on your support? It would just take five minutes to give me your bank details.”

“Well, of course,” you would reply. “I’m all right with infrastructure, health and education – but I’ve got a bit of a problem with financing the whole mutual destruction thing… and then MPs’ expenses. Hmm… you might have to give me a while to think about it.” 

And that, of course, is why we have PAYE. Without being forced to work for the Government for the first five months of every year, if we let people decide when they wanted to pay their taxes, they just wouldn’t.

If only there was an example in recent history of what happens when a country’s population don’t pay their taxes, leading to economic meltdown and resulting in fellow EU members having to bail them out several times over, with no prospect of getting any of the money back. Nope, can’t think of one – not off the top of my head.