Windows on the world


Taxation by Obfuscation

Perfection is rarely if ever achieved.  It is not a natural phenomenon, and Man’s creations rely on natural materials and conditions.  The more a creation depends on human participation, so does the likelihood of perfection become ever more remote.  And yet there is a spark within the human spirit that seems continually to strive toward perfection.  At least, there is a tendency to want things to be better than they are, and perhaps that is the driving force of civilisation.

Democracy, being man-made and dependent on human participation, is far from perfect, although measured against other forms of governance it has much to commend.  As we gain control over other aspects of our lives, then, we might be expected to divert some effort to improving the system of democracy, but here there appears to be strong resistance to change.  The US Presidential election of 2000 descended into farce because the democratic system had refused to embrace the benefits of technology.

Best Interests of the voters

Hopefully, votes will eventually be registered, monitored and counted by computers, but once the election is over the real problems of governance begin.  In theory, the democratically elected party carries out the wishes of the voting population.  Historically, there has been no way that those elected could ascertain the wishes of the people on every issue, and so parties are rather dubiously elected on general policy.  On rare occasions a specific issue is put to the people by way of a referendum, but this would be an impractical way to resolve all matters.  There is also a strong belief, particularly in political circles, that as issues become more complex so the people are incapable of rational decision-making.  Hence the politicians’ strong resistance to change:  we must hang on to our power because it is in the ‘best interests’ of the voters.

But as the electorate becomes technically aware and better educated, with access to more and more information and analysis, this traditional view can no longer be justified.  The ‘Man in the Street’ cannot, overnight, be expected to manage a complex national economy within a delicate, constantly changing international arena, but there is no reason why society should not begin moving in this direction.  The starting point could be public spending.

What about the nurses?

For decades, there has been an imbalance between the popular desire to improve the lot of nurses, teachers and police constables and the politicians’ reluctance to raise the necessary taxes.  The political logic is simple:  raise taxes, even in a popular cause, and we risk losing the next election.  The problem is made more complicated by the traditional, unwieldy system of taxation:  taxation by obfuscation.  In the nineteenth century there was no alternative, but modern computers could revolutionise the way we account for public spending.

The Man in the Street pays taxes in so many ways that he will have no idea of his total annual tax bill.  And perhaps not even the well-informed politician knows the relationship between the various taxes raised and the different areas of public spending.  But with the computer power now available there is no reason why we should not break down these figures and present them in a way that could be understood.  Take, for example, the three areas of health, education, and policing. 

Paying for the status quo

Annual budgets should be presented to the voters with clear options, with income tax becoming an umbrella term for specific taxes.  The Man in the Street can be told that the cost of maintaining the status quo is 7p for health, 7p for education, and 7p for policing (or whatever the figures are).  To reduce waiting levels in the health service to specified targets would mean building 16 new hospitals over the next ten years (additional cost 1p), and recruiting (and retaining) 10,000 more nurses.  This would depend on improved nursing employment conditions, and the cost of making nursing attractive (compared, say, to office work) would cost an additional 2p.   Similarly in the other areas, link the budget and status quo with rates of taxation, and show the increase (or decrease) in taxation for specific options. 

A responsible majority

It would not be difficult to present information in this way.  Of course, income tax is only one form of taxation, but corporation and indirect taxes could be apportioned in like manner.   The system could be even more sophisticated, with such refinements as taxes raised from cigarettes being shown as a credit in the health budget.  And using his home PC or mobile phone, or the keyboard at the local library, post office or council office, the Man in the Street could vote item by item for the community he wants.  Politicians have long assumed that people do not like paying taxes, but as we face increasing frustration over public services that do not meet our expectations it seems unlikely that the majority would fail to respond responsibly to this kind of decision-making.  And that is what democracy is about ~ granting the responsible wishes of the majority of the population.

There is an old saying: people get the politicians they deserve.  Surely, as we enter the third millennium, it is time that a democratic people be given the community it deserves.

© Harvey Tordoff
January 2001