Totalitarian taxation

The Centre for Economics and Business Research estimates that the 50% marginal tax rate on annual incomes in excess of £150,000 is costing the Exchequer over £1 billion a year. The reason is simple: Entrepreneurs up their sticks and move to sunnier economic climes. The actual figure is probably higher, for many foreign businessmen, entertainers and sportsmen who could otherwise move themselves and their money to Britain refrain from doing so. Though for obvious reasons their number can’t be calculated precisely, it’s unlikely to be trivial. The tax ought to be scrapped, conclude those not entirely bereft of common sense.

That only shows how little they understand the real purpose of modern taxation. It’s not so much keeping the government solvent (an end that’s out of reach for modern governments anyway) as keeping the people under its thumb. For any modern government, be it a democracy, a tyranny or a democratic tyranny, is innately totalitarian. Those who have no laws to answer to rely on coercion and violence to exert their control. Those somewhat restrained by a tradition of justice rely on economic levers instead.

High taxes, preferably but not necessarily accompanied by inflation (which is a tax requiring no legislative approval), prevent too many people from becoming independent from the state. Those from whom the state extorts 60% of their income (all told) have to devote every waking moment to making sure they can still survive on the remaining 40%. All the government has to do to bring them to heel is push the button on the money-printing press, and within a year or two the 40% becomes 25% in real terms. In fact, real incomes everywhere in the West have been stagnant for 20 years, and in Britain they’ve actually decreased in the last 10.

If, say, we paid a flat 20% rate, not only would we not bother to cheat, but we wouldn’t depend on the state’s largess in our retirement. That isn’t an outcome the state, as personified by our politicians, craves. They want to take, or inflate, our money away and then use it to create a huge underclass with a vested interest in perpetuating the government — in the hope that all those Peters robbed to pay Pauls will also come begging to the state’s doorstep when what’s left of their money runs out.

Promiscuous government spending inflates not only currency but also assets. Realising that their money is losing value people rush either to spend it or invest it into something that’s less likely to disappear, mostly property. A steadily inflating currency turns everyone into either a reckless spendthrift or freewheeling speculator, including those who are by nature neither wastrels nor gamblers. Thus quantitative easing (presumably ‘queasing’ for short) spells qualitative disaster. Add to this extortionist taxation, and the state has control over our economic destiny. Wishing to bind its citizens hand and foot, the state itself had to slip the tethers of fiscal responsibility.

And yet no one protests. Scrofulous youths climb into smelly tents because they hate capitalism and love hating. Yet responsible, Barbour-clad adults will march to protect their right to chase foxes but not to save society from totalitarian economism and tyrannical taxation. It is of course our patriotic duty to pay taxes — but only to a government pursuing patriotic ends. Anyone who thinks our Daves, Nicks, Georges and Vinces fit this description is sorely misguided.


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