There’s been lots of talk recently about tax evasion and tax avoidance – by both companies and individuals, particularly wealthy ones. I’ve not heard anyone talking about the reverse – let’s call it tax opting – choosing to pay more tax than the law requires.
There is lots of debate about what the right tax level should be. It varies from country to country and over time. If the tax rate rises, there will be grumbles from people who think they pay too much. If the tax rate falls everyone is supposed to be happy.
Somehow the important need to pay for public services and infrastructure to provide for wider community well-being has been forgotten. National infrastructure, like roads and water supplies, enables our economy to thrive and our quality of life to be good. We all benefit and even a multi-billionnaire can’t buy substitutes for this.
On Tuesday The Guardian reported the average weekly spend for the bottom tenth of households was nearly 10 times the spend for the top tenth. This suggests two things to me:
- First, that an income difference of 10 times between the highest and lowest paid might be a reasonable balance between recognising skills and abilities and having a society that values everyone.
- Secondly, that there must be a lot of people out there with spare cash every month – not just the ‘super-rich’ but also some of the comfortably off.
Some of these people whose incomes exceed their outgoings, are also be people with a social conscience.
Some of these give to charities.
Some of these people will also support the role of the state as a provider of public services. Some of these are people who argue that tax ought to be increased rather than have such harsh cuts to spending.
But there is no way that I know for them to become tax opters – to donate extra money for the generality of public services.
Who might these people be? Maybe…
a company executive who recognises the importance of good state education, to supply employees for his business.
a public sector worker couple whose children have now left home.
an elderly widow with good pension and savings who wants health and scial services to be available when needed.
Could introducing a way to do this encourage more philanthropy in the UK and help people reconnect taxation and public well-being? I’m going to suggest it to the Lib Dem policy working group on taxation!
Having suggested this to a few people, here are three more thoughts.
Tax-opting could be an easier decision than giving to charity. You don’t need to decide between cancer and strokes, children or education, and so on – or having to write dozens of cheques. And while the public services are said to be inefficient, there is nothing to say that charities are necessarily better.
It is hard to support some of our most important public services, like road repairing through charities.
Perhaps it would be possible to link tax opting with opting out of military taxes. This is an issue that has bugged conscientious objectors for decades, now that military might is not personnel on the ground but investment in technology. Conscience is an organisation campaigning in this area in the UK.