“What has the State ever done for me?”

We need to shift the discourse.

Too often taxes are justified or debated on the basis of what one gets out of the tax system. Like the NHS? Pay your taxes. Like good schools? Pay your taxes. Fire-service? Pay your taxes.

But this feeds a misconceived impression: that what you pay in taxes, you get directly from the system. Unfortunately, it is not so simple-if it were that simple, it wouldn’t be called tax…it would simply be payment! Tax, by definition, hinges on the idea that there is no correlating benefit.

This focus on direct benefit however leaves a gaping conceptual hole. What about the people, mobile workers for instance, that actually do not use the resources which taxes pay for and yet are forced to pay? Likewise, what about the people who only take and never give back? These “us v them” arguments become too easy to make.

We need to take a step back and look at the system as a whole. We need to stop focusing on what taxes pay for and instead think about why they are paid in the first place. It is often quipped that taxes represent the price paid to live in a civilized society. I would agree, but a stronger reason emerges when we look at the reason there are even things worth taxing. The banker in London, for instance, who earns £1mil in income, might believe they have pulled themselves up by their own bootstraps and take little out of the system. But this narrative is blind to the real forces: would one get £1mil doing the same job in Mozambique? No. The fact is that there are few places in the world which value to such an extent the banker’s particular skill set. The tax the banker ought to pay is not derived from the fact that they will get the tube to work but rather because they wouldn’t have earned that money in the first place if it weren’t for London!

Lets stop focusing on the benefits and look at the reason taxable items even arise. Let’s shift the discourse.

I should add a proviso at the same time however: Governments must demonstrate that the taxes being levied are going to pay for programmes, assets or policies that are actually needed. But that is a different story for a different blogpost.


About taxatlincolnox

Tax law academic. With this blog, I seek merely to contribute to the debate. All thoughts are mine, of course.
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2 Responses to “What has the State ever done for me?”

  1. Gearóid says:

    I completely agree, tax is about the redistribution of wealth, it’s why income tax is progressive, at least to a point.


  2. This is true-there are many reasons justifying taxes ex post such as redistribution of wealth, discourage socially undesirable activities, raising money to pay for services, to pay for war (as Income Tax was first introduced to do) etc. Indeed, we stick with income tax because it has a greater redistributive force than other taxes. What I’m trying to do in this article however, is shift the emphasis from outcomes to incidence. In other words, not to solely think about taxes on the basis of the good things they might do after the fact, but to justify their incidence before that fact arises.


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