A rumination in favour of taxes.

Taxes have a really bad reputation. We couple them with death an event most of us don’t anticipate with relish. And like death they are unavoidable though tell that to the super earners and their advisers. Watch them twist and contort whatever code they can find to practice their money saving origami and tell me that taxes can’t be avoided. But this, unlike evasion, is legal, a tug of war game between smart, grey people. I say let them play and as long as humanity spends vastly more resources in an ongoing attempt to avoid death, it’s OK. However, Evaders we should hunt and crush like flies. They think they have the right to choose while all others do not.
It is not surprising since death and taxes are deemed unavoidable we view them negatively. In this day and age we value choice above all else and here we have none. And it’s obvious that giving away some of our hard earned cash to a bunch of faceless bureaucrats isn’t going to feel good. Even the word tax feels a little harsh, after all it can be taken to mean “a strain or heavy demand”. Who wants that in an era of self improvement and kaizen like efficiency drives. Frictionless perfection’s the goal. We’re moving in the opposite direction aren’t we? Towards a peaceful easy existence, with our smart machines doing the heavy lifting. We may even make them pay taxes and see how they feel about that. And given that they will feel about it the way we make them feel about it, maybe we need to adjust our posture on tax.
First let’s do the easy stuff. We should ban the old axiom. Or at least we should modify it as follows.
There are only two great opportunities afforded to humankind, life and taxes.
OK not great but a start. We should try to make it a badge of honour to pay tax.
Secondly we should promote the fact that to pay tax is to earn more. This is true even for those who pay large amounts of tax as a result of something called progressive taxation. Generally speaking if one is paying large amounts of tax one is earning large amounts of money. Given the choice, we’ll it’s obvious isn’t it?
Thirdly, we should better communicate how much tax is raised from which sources and how these taxes are spent focussing on the benefits they deliver. These communications should be designed to promote a positive experience for those targeted i.e. Tax payers and prospective tax payers. After all in a democracy taxes are spent on what the people want them spent on. Well no they are not but they should be. The point is if they are not furthering the common good then what are they doing?
Fourthly we should call them something different. Why not relabel ‘taxes’ as ‘public gifts’. This way I could look forward to submitting my annual return like I do Christmas.
Right. That’s the easy part. The hard part is to ensure that the whole system feels fair and that the expenditure is necessary and efficient.
It is rare in all but the most basic transactions to achieve equity. At best we can hope to converge on fairness. It’s for this reason that there is a saying in the Mergers and Acquisitions World. It states that a good deal is one in which both sides are equally unhappy at the outcome. It makes them laugh but of course the implication is that a deal cant be done unless one side concedes something and that each side thinks it has conceded to the other. It’s just a state of mind thing, they could have a saying about a good deal being win/win. Actually they do, it’s just that they don’t believe it. The whole point of their game is to win big and bigger than the other side. It might be win/win but the other side lost didn’t it?
The point is that it is genuinely hard to achieve fairness, a change situation in which the risks, costs and benefits are shared in proportion to the merit of either party. But to quote Spinoza. All things excellent are as difficult as they are rare. We should strive for excellence here, it’s worth it. We can converge on a fairer system of tax and we can do it so well that the barriers to participation are removed. How?
Here’s a 5 point plan.
1. Create the circumstances where significantly progressive taxation is unnecessary. It is not a good tax system if the many rely substantially on the few. This means levelling out the pay range for 90% of the workforce. We should ignore the top 5%, let them keep pushing for the Moon. Everyone else should benefit more from the value created and the lowest paid should see the fastest increase. In the U.K. 40% of the adult population do not earn enough to pay taxes and some in Government celebrate this fact. I’m in mourning.
2. Change the way we elect our politicians and form Governments. Left and right party politics is for the birds in a rich society. An election system which gives a choice between two opposing philosophies and grants one the absolute power to Govern is flawed. Unless both converge around the middle, which is what normally happens when we all become so decadent in which case it is no choice at all, Government action lurches back and forth in a five year cycle. We should encourage a multi party system and to do so minority parties must have a chance to directly influence policy and expenditure. Coalition Government must surely be the way forward.
3. Prepare a National strategy, a fifty year vision within which all elected governments are constrained. We have the ability to prepare sophisticated methods of strategy development which would set out global trends, scenarios and bell weathers in order to guide, constrain and challenge successive Governments. We have defence strategies, millennium goals and infrastructure plans but why not prepare and cherish something which brings all of this together into a National context. If this is centralist, then execution should be its opposite.
4. We should remove prejudice from the means of delivery. What determines the means of converting our taxes into public goods and services should be guided by effectiveness. This in itself is difficult. To choose between private sector, public sector, public private partnership, third sector is difficult for any particular programme of expenditure. But the more we make our choices based upon an objective assessment of the risks and opportunities and the expertise available the better we will decide. And our solutions will be more creative. We have developed during the modern management era an impressive knowledge resource. We know how to decide and do all this stuff really well. We have failed though to insist that our managers sufficiently exhibit these skills. It’s time. Management development should be a priority and the objective assessment of competencies should be more widely adopted as the means of selection and progression.
5. Finally, if our managers are barely competent, they are rocket scientists when compared to our politicians. We must insist that our politicians are more capable. I’m not aware of even a pre qualification standard for elected officials let alone a progressive competency matrix. Give anyone a safe seat and they can end up on the back benches or better ( worse), in Government or opposition. I absolutely support the need for our elected officials to collectively reflect those they represent. It’s just that I don’t think we do the ignorant minority any favours by dumbing down government to include their stupefied predicament.
Imagine a World, where smart politicians work together and deliver via the most effective methods all the public goods and services which have been envisioned in our fifty year strategy and described in detail in each contemporary coalition Government’s agreed legislative programme.
Imagine a World where the vast majority of the adult population willingly contribute to the funding of these services because they understand why they are necessary and consider their money well spent.
Imagine a World in which politicians and business leaders are trusted because decisions are made transparently and with competence and Governance is genuinely effective. All this made possible because decision makers are competent, more able to make good decisions and hence more confident to discuss their reasoning.
Tax reform could be a powerful force for good. Public Gifts could heal our fractured societies.
