In a very good post about workfare - one that if read without knees jerking contains much that Classical Liberals would agree with - Shuggy says the following:
... David Cameron can smoke weed and snort coke and all that happens to him is that commentators admire the way he deflects 'unjustified' questions about his 'private life'. But the left-behind society has no such privacy.He isn't explicit, but I assume he is talking about means testing, and the license that gives the State to investigate every detail of a claimant's life.
The first letter on this page puts this more directly:
The BBC news now tells me my benefits will be scrapped and I will be tested (I have been tested twice already). I will have to bare all my privacy in the hope of retaining the right to survive the winter.And that's true. This point is often made by the left. It is linked to dignity.
On the other hand, those whose income is taxed to pay for benefits are subject to what Adam Smith called "the odious examination of the tax-gatherers". Especially in the case of the self-employed, and most particularly when they are subjected to a tax examination, no part of their lives can be called their own. Far more than in the case of benefits claimants, every detail of their lives is open to enquiry.
Is an invasion of the privacy of a claimant more important than that of the people taxed to pay the benefits they are claiming? If it is not, then whatever form of government revenue can legitimately be raised, it does not include income tax.
My own position is that both claimant and tax payer have the same right to privacy. But the claimant has a duty of justification to those whose money is being taken on their behalf. This doesn't need to take the form of means testing, but it does need to be satisfied.
Therefore, while land and transactions can be taxed without an invasion of privacy, income cannot and should not be taxed. Equally, means testing is unacceptable, but if a claimant is capable of work, any work at all, and this is available, they have a duty (to their fellow citizens, the taxpayers) to take it.
4 comments:
while land and transactions can be taxed without an invasion of privacy, income cannot and should not be taxed
I agree with that except the 'transactions' bit. Either it's an income type transaction (which ought not be taxed), or it's a land transaction (in which case there's no need, you can tax the land as you go along).
Equally, means testing is unacceptable, [agreed] but if a claimant is capable of work, any work at all, and this is available, they have a duty (to their fellow citizens, the taxpayers) to take it
Forget about 'duty'. People respond to incentives. If a) the basic level of benefits is not quite enough to live on, and b) there's no income tax or benefits withdrawal, then people will find work (or stay living with their parents, or, if single mum, find a husband - like in Victorian times).
Sounds like geonomics to me.
A value-added or sales tax is levied on transactions. These might be problematic for other reasons, but they aren't income taxes.
I agree about incentives, but our responsibility to those whose money we seek to take is also, in my opinion, important. It isn't either/or.
I blogged a little on the subject, without any great depth of analysis.
Firstly, these measures strike me as gimmicks. The same way we always hear about 'putting more bobbies on the beat', announcements that the work-shy will be targeted under new measures come and go, without much change to the situation.
Secondly, picking on such people is a good place to start, if you want to erode individual liberty and privacy. The next thing you know, we'll all be carrying ID cards, and being drug-tested.
Thirdly, means testing and making people jump through hoops is far more costly to administer. Instead of just giving someone fifty quid and be done with it, you end up employing an army of pen pushers, printing reams of new forms and empowering the little bureaucratic fascists that I despise.
The taxation system and the welfare state certainly need reform, but those reforms should be in the direction of simplification. The first change I would implement would be to raise the threshold before tax, at least to a level where the basic necessities can be provided for. It is ludicrous to take someone's money away as income tax and then play the benefactor by giving it back in 'tax credits' or benefits. National Insurance also needs root and branch reform. The fact is, someone who has been working for years, and thus paying into the system, sees scant reward for his contribution if he is constrained to seek benefit from the dole office.
Peter: value-added or sales tax is levied on transactions. These might be problematic for other reasons, but they aren't income taxes
How is the economic incidence of a sales tax (with a deduction for input sales tax already paid) any different from a flat turnover tax (with an exemption for business-to-business)???
And how is a turnover tax not like an income tax (but far worse - you pay it even if you're making losses)???
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