I was discussing the role that tax might play in the post-coronavirus consensus last week and as a result drafted the ten principles that I think should guide thinking on this issue. I would describe them as the principles that might underpin tax justice, in my current opinion. As I doubt they will be published elsewhere I share them here:
Tax and society
1. Tax systems are fundamental to shaping distributional justice within a society. They should be designed to minimise harms, which are those policies and practices that undermine the re-distributional capacity of a tax system. In particular, no part of a tax system should undermine another part of the same system or harm the revenues or tax system of another tax jurisdiction.
Tax and equality
2. Tax should, without exception and across the system as a whole, redistribute income and wealth to deliver greater equality and reduce inequality in society.
Tax and market failure
3. Tax should be used to reprice goods and services to counter social harms and promote benefits that markets alone cannot deliver.
Tax reliefs and allowances
4. Tax incentives, allowances and reliefs must be designed for the overall benefit of society as a whole and should not undermine any other principle noted here or create opportunities for profit, gain or abuse at the expense of collective welfare.
The tax authority
5. The tax system and authority of a jurisdiction should have all the financial, political and administrative support it requires to enforce all tax law in the interests of society as a whole and of economic and social justice within it, including by constraining the activities of those professions that seek to undermine its integrity.
Tax and economic policy
6. Tax does through fiscal, monetary and other policy play a key part in the macroeconomic management of an economy. When doing so the principles noted here should not be undermined.
Tax and justice
7. Justice should be seen to be done within a tax system. Tax authorities should make available all legislation, information, support and explanations required to assist a taxpayer seeking to comply with their obligations. Appropriate, timely, affordable and independent appeal mechanisms must be available to those who believe that they have been incorrectly taxed. Penalties for those who err must be proportionate.
8. The tax system of a jurisdiction should be accounted for openly and with sufficient information being supplied to ensure that all the stakeholders of a tax system can appraise the effectiveness of that system against the reasonable expectations that they might have of it.
Tax and other law
9. The accounting, company law, trust, administrative and other laws of a jurisdiction should be designed to assist and support the enforcement of its tax system.
Tax and international obligations
10. Tax authorities should cooperate internationally to ensure the delivery of tax justice within their own and other jurisdictions in accordance with the principles noted here.
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i agree but no political party in parliament will agree to the above. I know Corbyn & co would agree but he is on his way out . Starmer not a chance he wants go back to tory lite party. As for your points i agree wholeheartedly
I suspect you completely misread Starmer. Whilst he will attempt to unify the party, he is far more radical than many give him credit for!!
I personally think he is more radical
But if Rachel Reeves is the shadow chancellor I will worry – she is very neoclassical in approach
There will be no limit to the retribution the British public will visit on Johnson and the Tories when this crisis subsides. Keir Starmer simply has to position Labour to go with that flow. Corbynism, as amplified and modulated by the neo-stalinists and ultra trades unionists surrounding him, is a busted flush and would never in a million years secure the support of a majority of the electorate.
Richard, I have one question, after reading the 10 point guidelines.
How do we on the so rich African continent put this in practice?
Pardon my ignorance, but this sounds so good to be true in our case, or to be implemented by systems that seek (whether deliberate or by accident) to outsmart its tax paying public?
I am not sure the principles change, do they?
I entirely accept that the delivery may differ
This is where the Tax Justice Network is the specialist: I admit I am northern state focussed in this regard. Sorry…
Could you please explain what you mean by a ‘consensus’ in this setting.
The word suggests some kind of general agreement.
I would have thought that these issues are decided over time by democratically elected politicians. There should never be any kind of ‘general agreement’ that displaces this.
Am I right in assuming your proposed consensus is not intended to displace democratic decision making?
How very odd a question
What do you think I am proposing?
But there are also meta narratives in society that go beyond politics e.g. the post war consensus
It is that greater meta narrative to which I refer, but it will be delivered through the democratic process
I assume you mean ‘hopefully might be delivered through the democratic process’ rather than ‘will be delivered’?
I’m not sure any of us has a mandate on what ‘WILL be delivered’.
This seems a wish list for one person. That’s fine, but a long way to being a ‘consensus’, assuming there is or even should be one. Let these things be decided as we go.
If you wish to thin I have megalomaniacal tendencies please feel free to think what you wish
But please don’t waste my time telling me something that is not true
I am putting forward ideas for a post-coronavirus consensus. Freedom of speech affp0rds me that right. Do you have a problem with that?
Do you think that I should have a problem with the many identities that you seem to use here?
What you are really saying is that you will continue to offer yours views on taxation which is your right..a consensus reached for all intent and purpose means what policies an elected Government choses to follow. Not for example what is generally agreed on a blog like this. The probability of an elected government ever adopting what you propose is very remote but that should not stop your flow of ideas.
No, a consensus is much broader than what a government suggests
It is a paradigm
Politicians don’t create them
They follow them
But there are also meta narratives in society that go beyond politics e.g. the post war Washington consensus
It is that greater meta narrative to which I refer, but it will be delivered through the democratic process
How did that come about?
This is surely a time for studying as well as thinking. And when you talk about consensus it’s not clear if you hoping that England, the UK, Europe as a continent, or the world as a whole moves together.
I did not talk of the Washington consensus
And why not worldwide?
I’m not for a moment saying it will only start here
But like minded people make these things
I thought that the Washington consensus was the closest thing to a post-war consensus that we had. All the countries re-built to different systems, from communists, to Attlee, Erhard and the USA all took different routes. And have gradually converged ideologically after a few decades.
Clearly you meant something else when you claimed there was a post-war consensus. What did you mean? Other than not being at war, which is the only consensus around now against this virus.
The consensus is for it to just be over.
How we then get on and make the best of our lives after that will be like the end of WWII. We’ll all go off and try different things.
There isn’t even a consensus right now in the EU before CV-19 about how we provide universal health care. Only one member now has the NHS system, there are co-payment systems, SHI systems, mixed public and private, a real selection box. The only consensus about is that it is universal.
As a libertarian you should embrace and promote the freedom to come, economic and social, so long as we don’t impose costs on those who didn’t consent.
The Washington consensus was the post 1980 agreement and neoliberal
The post war consensus was Keynesian
I am not an economic libertarian and have no desire to be: it is recipe for abuse
“It is a paradigm..Politicians don’t create them..They follow them”
So you are proposing a new paradigm, a new way of thinking that will be followed by the masses and then by politicians? The masses of Britain, Europe, China, India, Russia and America..all follow the logic of a certain R Murphy..Good luck matey, that will keep you busy
No problem
You may lack ambition….I want to at least play a part
Scottish Government please take note! If Independence is to be achieved it will require a brand new, principles-based taxation system. This should be worked on in advance so that the proposal can be part of the post-Independence strategy. I’m not at all convinced about the SNP’s current capabilities in the crucial fields of economics, taxation, social benefits, finance and currency, so expert outside help will be necessary to construct a coherent structure of inter-related plans. Is there anyone out there with the necessary breadth of knowledge and who might be looking for work? Oh, just a minute….
http://allofusfirst.org/library/a-scottish-tax-system-imagining-the-future-2017/
“Justice should be seen to be done within a tax system. Tax authorities should make available all legislation, information, support and explanations required to assist a taxpayer seeking to comply with their obligations. Appropriate, timely, affordable and independent appeal mechanisms must be available to those who believe that they have been incorrectly taxed. Penalties for those who err must be proportionate.”
Quite so, have the system simple enough and well explained enough that we can do away with accountants..
Accountants play an enormous role in making sure people stay within the law – a majority do such socially useful activity despite what is true of some 0thers in the profession
How about no taxes for 12 months? Let people build up their own wealth and recover.
Why are you so obsessed with taking money from people?
You think public services will survive an £800 billion give away?
Why are you so intent on destroying the mixed economy on which we all so obviously rely?
Regarding tax
You have said many times public services are not paid by tax, tax is a means to control inflation..given there is no inflation why not have no personal tax for a year? I have no doubt people will be spending whatever savings they have in these difficult times. Just print more money to pay for public services for the next 12months or so?
There is no inflation because tax is controlling it
Is it really that hard to work this out?
“There is no inflation because tax is controlling it…Is it really that hard to work this out?”
You patronising twat..no it isn’t at this moment in time it is my, and millions of others, inability to work !!!!!!
You talk about dogma,, take a close look at yourself FFS
Well it didn’t take long to out you as a troll
I’m always slightly bemused by the tax is theft crowd. I can kind of see the logic, if you assume that the society you live in contributes literally nothing to you, but in my opinion that is a misguided and naive assumption to make.
There is, of course, a simple answer for those who object to paying taxes – go and live off grid. Completely off grid. Don’t use the roads or the healthcare or schools or water or energy distribution or any public transport etc etc etc.
To comment more general about this topic. I hope we arrive at a similar consensus to the one outlined above. I was accused by my father of being optimistic regarding this, amongst other things, so I replied that optimism is better than despair and everything has to start somewhere.
Thank you for the writing Richard 🙂 it fuels my optimism
Thanks
You’d have thought the tax is theft brigade would know to shut up right now
Apparently not
Thanks for the link Richard and thanks for having written a plan. I guess the Scottish Gov currently has its hands full with the virus crisis, but consideration of your proposals ought to be high in the priority of the new Finance Secretary once Covid19 recedes.
I still hope so….
Simplicity is needed…
When I started in tax at the tax office, we didn’t have any of that ‘online’ malarky and had to read what we called ‘books’ (young people may need to google this). Anyway, tax legislation was published in what were known as the yellow and orange books. Yellow direct taxes (income tax and so on) Orange indirect taxes such as VAT (GST to you).The Yellow books had two volumes one chunky, the other not so. Orange was one volume. That was over a century of tax legislation
Along came Gordon Brown…By the time he finished there were four chunky yellow books, two orange. He’d effectively doubled the amount of legislation in a decade. He would squeeze new Sections into the tax acts so you’d end up with absurdities like Section 42P after he stuck a new load in between section 42 and 43. There are even bits where it’s section 72AF because more than 26 new sections had been crammed in. Every budget whole forests were cut down to provide the paper for the new rules.
I think we’re up to 5 yellow and 3 orange now. All books you could batter a horse to death with.
Simple it isn’t. It it all necessary? Is it fukc..
Yes it is, actually
The vast majority of the growth is to stop abuse
Blame the abusers, not government
“The vast majority of the growth is to stop abuse”
Completely disagree..keep it simple, keep it obvious..thats a much better way to avoid abuse. The complexity is an open door for abuse
You really don’t understand tax is what I have to say
Tax is not about revenue raising
And tax is not meant to be simple – it is meant to reshape society
Read my book The Joy of Tax
“You really don’t understand tax is what I have to say”
“And tax is not meant to be simple — Read my book The Joy of Tax”
maybe a little self reflection instead of self obsession is needed by your good self!
I know the orange and yellow books too
And no, I don’t need self-reflection
I’m telling you that the orange and yellow books tell you nothing at all about the purpose of tax: literally, nothing at all
‘I’m telling you that the orange and yellow books tell you nothing at all about the purpose of tax: literally, nothing at all”
Well they tell you the rules you have to abide by and those rules mushroomed under Gordon Brown to a point where they become so complex they are a boon for accountants and that is wrong.
You want to philosophize, fair enough..i am saying tax has to be simplified
I don’t want to philosophise
Tax is a vastly bigger subject than you seem to appreciate
Why not explore the issue?
“ Why not explore the issue?”
No thanks it’s actually deathly boring
So why did you come here?