While readying words to accompany this Nugget in a Nutshell on taxation I turned up the clearest most concise piece I have yet to read on the subject, by Dominic Frisby, who seamlessly combines his career in financial journalism with that of stand-up comic. Taxation – in a minute
Did you know that the UK tax code is ten times longer than the complete works of William Shakespeare? I sum it up in a minute on the video, as what it has always been – a funnel shifting wealth from the many to the few.
Why we need to simplify our tax code – Dominic Frisby
Back in August I took a show to the Edinburgh Festival all about tax. Not perhaps the most fertile subject for comedy – HMRC’s cock-ups aside – but I’d concluded that the dearth of media about such an important subject needed to be put right.
Tax is and has always been power. Whether kings, emperors or governments, if they lose their tax revenue, they lose their power. The aim behind every conquest in history has been to take control of the tax base. The purpose of every revolution is pretty much the same. Every war has been funded by some kind of tax, either before or after the event.
Tax permeates everything that we do. It’s as much a part of our lives as eating, drinking or sleeping. Can you name me an activity – apart from breathing – that doesn’t involve taxation in some way?
I know what you are thinking. All you’re doing by that is creating future taxpayers.
The way that a society is taxed speaks volumes about that society. In the UK taxes are taken at source, by stealth, by force and without choice. So, there’s a relationship between taxation and freedom, as well.
It is not a case of who is paying their “fair share” of taxation but a case of taxation itself not being fair. That massive extraction, by the state, of wealth produced by human activity is at the root of our civilization’s troubles, and underwrites all its wars. Why do we think it okay that we cannot choose how to deploy half of the wealth we create? The answer simply lays in finding another way of doing things we are already doing.
Outrage has been prompted by Oxfam’s estimate that the richest 1% will soon own 51% of the world’s wealth. A predictable “steal from the rich and give to the poor” response rallies public support and thereby diverts blame from the state for its inability to deliver the services for which we pay them well. The problem is inherent waste and inefficiency, not who pays how much tax. Politicians won’t actually squeeze much out of their super-rich masters but we’ll support taxes implemented in the name of wealth redistribution and call if fair play. Taxation is the taking of money against the threat of damage for non-compliance – always has been. It’s rather like mugging, and not a lot gets sprinkled back. Over 70% of taxation is not upon our earnings anyway, but in every pound we spend; each cup of coffee, pair of shoes, drop of petrol or alcohol, massage, rent payment and watt of electricity bears the burden of a heavy state. Wealthy consumers already pay a lot more taxes on that account. If we doubled income taxes on the super-rich the extra revenue would not even cover the interest owed to bankers by our state for creating the money that prevented other bankers from going bankrupt as a result of immoral dealings. Don’t expect it to dent the deficit, and know that many of the wealthiest 1% have fingers, hands, and heads in governments across the world and would be less assured of their wealth without that leverage and control.
Were the answer to every problem “more taxation” then we would soon have 0.0% control over how we deploy our wealth, instead of just 50%. Only 10 of those 50% in taxes is eventually spent within the category of “redistribution of wealth,” which is neither an underlying purpose of taxation, nor a priority. Are we truly incapable of re-distributing our own wealth, voluntarily, to organizations with genuine charitable credentials and goals in tune with our own?
The combination of all levied taxes sees half or more of the total wealth created by people and companies sucked into the state to fund its spending. The state overspends and borrows the excess from banks, to be repaid by our future wealth creation (which must constantly increase for the scheme to work). It works for the central banks who create that money, literally, out of thin air. It’s smoke and mirrors.
“The bank hath benefit of interest on all moneys which it creates out of nothing.” William Paterson, founder in 1694 of the Bank of England,
The state is not a necessary evil and society will not collapse into dog-eat-dog savagery without them sucking out its lifeblood to preserve order. 98% of us are caring human beings who cherish the idea of living in peace and harmony with each other. We are good at doing that. Then some 2% of us are sociopaths who see the rest as a resource to be used and exploited, having no compassion for starving babies or tortured grandmothers of their own or any other race. Unsurprisingly, politics is a common career choice for sociopaths.
In our system sociopaths sometimes get to the very top. Historical examples abound, with our own era witnessing pre-planned wars waged on false pretenses destroying the lives of countless millions. That 98% cannot imagine a human being behaving so badly is the greatest strength of the 2%, and underpins the “Big Lie.” Adolf Hitler described this in Mein Kampf as a lie so “colossal” that no one would believe someone “could have the impudence to distort the truth so infamously.” Even after seeing “facts which prove” they “doubt and waver,” assuming there is “some other explanation.”
Politics is not even the main game in town, though it often appears to be the only one. Examples abound of civilization self-organizing without the need of top-down control by force. In our current system, democratic or otherwise, we too often find scum rising to the top and calling the shots. In a free system we develop means to eject the scum and let cream rise to the top. The feedback loop of customer reviews does just this at Tripadvisor, Amazon, Airbnb, Uber, and other new age businesses. We can do it. We have the technology, and I’m off on a tangent here which could stretch into an entire book but will not since it is already written.
TAXATION EXPLAINED, by Jean Baptiste Colbert, 17th century finance minister to Louis XIV : “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”
Talk of social engineering, climate management, and wealth redistribution is all about reducing the hissing.