George Osborne Must Avoid The Urge To Become A Control Freak

George Osborne - Chancellor of the Exchequer - Budget

This well-written piece from The Freedom Association is worth reading, warning the Chancellor of the Exchequer to avoid raising taxes on beer in his upcoming budget announcement.

As an avid beer drinker myself, I can argue from a position of self-interest alone that it would be bad to raise the level of tax on a pint of beer.

But let’s forget about that particular issue for a moment, and concentrate instead on the ludicrous yearly spectacle of the Chancellor of the Exchequer standing at the despatch box in the House of Commons, and reeling off a list of everyday products that he intends to extract more tax from in the coming year.

Could there be a greater example of heavy-handed, over-centralised, petty, British authoritarianism than this?

Why should the central government, in addition to raiding our personal incomes and (if we are so fortunate as to have them) corporate profits or capital gains, also be allowed to decide that it wants a slice of the pie every time we buy a pint at the local pub, or a pack of cigarettes, or a bottle of wine to drink at dinner?

Is the punishingly high rate of VAT (currently 20%) paid on most goods insufficient? Are the higher (40%) and top (50%) rates of income tax not enough, or the additional national insurance “contributions” that we all make (an additional tax in all but name, meaning that the highest marginal rate of income tax is now well over 50% – why bother to work at all when the government snatches more than half of every pound you make before it even hits your bank account?)

Since the Second World War, and for some time before, government in Britain – and the raising and spending of government funds – have been far too centralised. Wouldn’t it be a wonderful thing if taxes were simplified in this country, so that there was one deduction for income tax, one for VAT, one for capital gains, one for corporation tax and nothing else to worry about? Forget “national insurance” and sneaky tax increases on a pint of cider here, or a pack of cigarettes there, or doubling the tax we pay for the privilege of passing through any of Britain’s dilapidated airports (air passenger duty), or any other thing that the Chancellor thinks he can extract revenue from?

If that’s an impossible pipe dream, how about restoring some semblance of a link between the stealth taxes that are raised and what that money is spent on, so that I can be reasonably sure that the ridiculous amount of tax I pay when I fly from Heathrow Airport actually goes to make air travel or general transport better in this country, rather than being added to some massive central pot and disbursed to fund a score of other schemes that I probably either object to, or don’t benefit from?

And since no government will ever do this in the foreseeable future, can we at least implement Ben Gummer MP’s idea to give each taxpayer a yearly statement, personalised for their salary and annual tax contributions, showing where their contributions are going.

And when, for example,  people buy petrol at the pump (or rather, go inside the shop to pay, because this is Britain and paying at the pump is still proving too great a technical feat for us to master in 2012), it would be nice if the receipts would show the original price charged by the company, and then the price payable by the consumer once the onerously high rate of fuel duty is added on.

Government should be transparent, open and accountable, and I for one would like to see where my money is going.

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4 thoughts on “George Osborne Must Avoid The Urge To Become A Control Freak

  1. belindasgallery March 16, 2012 / 2:04 AM

    And ‘ll ask my dear friend and ideological soulmate Gordon Brown to come up with a good reason for taxing crossword puzzles and hot chocolate, it should only take him all of fifteen minutes! 😉

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  2. PoliticalPartington March 15, 2012 / 5:21 PM

    As much as I sympathise with the principle behind your post I think some of these ‘sin’ taxes are of great benefit to society. Some stealth taxes such as the TV license fee should be scrapped. Virtually everyone owns a TV nowadays so there is no need to focus solely on TV owners, as any uni student will know it is easily evaded and the government wastes a lot of money on catching evaders and menacing everyone. Your point on the NI tax is also well made; it is just another form of income tax. Let’s call a spade a spade.

    However taxes designed to compensate for negative externalities (the costs a user of a product imposes on society at large) are only fair. Heavy drinkers are disproportionally responsible for crime, vandalism and tying up hospital time from accidents, fights, stomach pumps and liver failure. People who run lorries and cars cost us road maintenance and damage the environment. Smokers tie up hospital beds.

    I fully support people’s rights to engage in such activities but they should have to pick up more of the bill so tube taking, smoke free, teetotallers have more money to spend on their hobbies which don’t cost anyone anything (unless you can find a reason why we should tax puzzles or hot chocolate).

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    • belindasgallery March 16, 2012 / 1:58 AM

      Good response! I accept the premise of what you say, and in retrospect I probably agree that in a pragmatic economy there is a place for certain ‘sin taxes’. However, I stand by my secondary point – if you are going to tax certain products or services in order to help compensate for the negative externalities that they generate, the tax revenues that are raised should actually be used to, y’know, help compensate for those negative externalities. This doesn’t happen at the moment; everything goes into the enormous central government pot and then gets spent on firefighting whatever issue The Sun has whipped up its readers into a frenzy about on that given week. I don’t have figures to hand (too lazy) but I imagine that the government rakes in far more money on tobacco and alcohol duty than is spent on anti-tobacco or alcohol advertising, or funding research into liver or lung disease, or anything else. And I don’t need to see figures to know for a fact that the vast sums of money I have paid in air passenger duty over the years have been diverted for another purpose quite other than making airports in this country more pleasant and less soul-sapping places! So I’ll concede my main point, that there is a pragmatic value to having some ‘sin taxes’. But I’m sticking to my guns that there should be more transparency in the tax code and an actual link between the extra 3p of tax that George Osborne will add to the price of beer in his upcoming budget and the additional measures that will be taken to counter alcohol-related externalities. Yes, all money is fungible, but I know when I’m being taken for a ride!

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