30 April 2009

Radio Silence

Apologies for the lack of postings. I've been trying to balance the output with some input, so I'm in the middle of reading Herbert Spencer's Social Statics. I'll try to churn something out soon.

14 April 2009

The Taxpayers' Alliance - Still Missing the Point on Green Taxes

I commented on the TPA's stance on green taxes last year [1] and it seems they've still got a bee in their collective bonnet about them, as they've produced a Green Tax Calculator which is designed to allow people to work out the amount they pay annually in green taxes [2].

The TPA positions itself as a "low tax" campaign group, which is something I'm broadly in favour of, but when it starts focusing on specific taxes, such as green taxes, it isn't criticising the overall level of taxation, it is criticising the tax mix, which is a completely different proposition.

If they are so convinced that green taxes should make up a lower proportion of the overall tax take, I'd expect them to give some solid reason why they are inherently worse that Income Tax, VAT, NI, etc. Unfortunately, that is something they haven't seriously attempted.

What I find really odd is that they've chosen to release figures which paint a picture which is at odds with their message. If you believe their figures (to be fair, I've no reason to believe they are inaccurate), then the average person pays £740 in green taxes per year. In 2007-08, net taxes were £515.9billion [3], which equates to approximately £8,500 per person, so green taxes make up a single figure percentage of the total, which makes them appear a poor choice of target for a group looking for low taxes generally. Even a worker on a wage well below the average is likely to be paying significantly more in income taxes than in green taxes.

Of the £740 figure, over half (£496) is fuel duty. As a way of raising revenue, I think fuel duty is one of the better methods; it produces some significant positive externalities, such a encouraging the use of more fuel efficient vehicles and going some way towards pricing the scarcity value of road space. If that £496 were to be raised by taxing income instead, the positive externalities would be lost and I can't see any that would replace them. If you earn money, it doesn't create any negative externalities for me, so there is no particular reason I would want the tax system to discourage you from earning money.

The other advantage with fuel duty is that it is much easier to administer. It doesn't require that every company has a knowledge of the system in the way that income tax does, so it creates less of a regulatory burden. There is also much less scope to evade fuel duty than there is to evade income tax, so it needs fewer public sector staff to administer.

Of course, the TPA might argue that they would rather have the £496 removed from the tax burden altogether than transfered to income tax, but that still wouldn't explain why it should be fuel duty that is reduced rather than income tax.

1. http://plockett.blogspot.com/2008/08/green-taxes-how-to-completely-miss.html
2. http://www.taxpayersalliance.com/research/2009/04/new-online-green-tax-calculator-launched-average-person-pays-740-in-green-taxes-and-regulations.html
3. http://www.hm-treasury.gov.uk/d/public_finances_databank.xls

11 April 2009

The Tax Justice Network and LVT

There's a nice summary of the Tax Justice Network and its campaign against tax havens over at the Land Value Taxation Campaign[1].

If somebody's objection to tax havens is that they enable the avoidance of tax through loopholes in the tax system, a brief period of consideration should make it obvious that the problem isn't tax havens, it's the tax system. Start levying tax on geographically fixed resources, such as locations, EM spectrum, roads, etc. and you solve the problem, because you can't move those items to a tax haven. Avoidance would be halted without any need to dictate tax policy to other nations.

The TJN appears unwilling to acknowledge that as an option, which seems to hint that their real objective is to establish a global tax cartel to ensure that taxes can be kept high everywhere without the fear of a more efficient competitor undercutting the agreed minimum.

1. http://www.landvaluetax.org/latest/what-is-the-tax-justice-network.html

08 April 2009

Go Back to Your Constituencies and Prepare for Opposition

Call me a cynic, but I can't help feeling that the government's plan to spend £750,000 to help charities lobby more effectively[1] is the act of a government resigned to losing the next election and looking for a way to make its successor's life more difficult.

As John Redwood pointed out, if the government wanted to know what these charities think, it could just ask them; it doesn't need to spend a quarter of a million pounds to enable charities to be more effective at campaigning from a distance.

As a scorched earth strategy it makes a lot more sense; the government can seek out the charities which are most at odds with the opposition's policies and train them up to provide vigorous criticism. Given that the government's reputation is in tatters, the charities are probably in a stronger position to offer credible opposition to the next government.

1. http://news.bbc.co.uk/1/hi/uk_politics/7989656.stm

06 April 2009

Letter to the Manchester Evening News

As part of a regular feature where the paper prints articles written by North West MEPs, Arlene McCarthy made some comments I just had to respond to:

I was astonished to read the attempt by the MEP Arlene McCarthy to portray herself as a champion of consumer protection and local business exports (6th April).

This is the politician who has backed a campaign to skew the copyright bargain against the consumer by retrospectively increasing the time that copyright applies for (against the recommendations of the government's own independent review), which would result in consumers having to pay more to enjoy books and music which would have rightly entered the public domain and been free to use.

This is the politician who has also spearheaded a campaign to make software patentable in the EU, which could have done severe damage to the UK software industry, by granting monopolies to the large US corporations which currently dominate the market, delivering a worse deal for the consumer in the process.

These don't look anything like the actions of someone committed to protecting consumers and backing local business exports.

Sometimes they get printed and sometimes they don't, so I thought I'd post it here too.