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How much of a person’s income is it right for the state to appropriate for its own ends? I don’t pretend to know the answer to that question and I would be suspicious about anyone who said they did. Those on the left, however, think they have the answer: ‘more, more, more’. Nowhere has this irrational, anti-capitalist attitude been more in evidence than in leftists’ demands that the government should ‘force’ corporations such as Starbucks to pay their ‘fair share’ of tax.
No one is accusing Starbucks of any illegal activity. It has not evaded tax; it has avoided it – as does anyone who takes out an ISA or stocks up on duty-free booze. It has done so at the same time as providing nearly 10,000 UK jobs and paying millions of pounds in VAT and National Insurance. Amazon and Google, which have also been criticised for similar tax avoidance, provide services much-valued by many millions of people. Despite these facts, leftists from UK Uncut and the Labour Party, as well as ‘tax campaigner’ Richard Murphy, have lined up to denounce the firms.
What do the leftists hope to achieve by this campaign? Starbucks has caved (but Google and Amazon haven’t), so the State will be around £10 million better off each year. As if the public sector wasn’t bloated enough already. In the process of growing the non-productive sector of the economy, UK Uncut and its fellow travelers will actively damage the productive sector.
Capitalists have pointed out ad infinitum that, in fact, a company cannot pay tax. A company is a piece of paper in Companies House, a legal fiction. Companies don’t pay tax – people do. Corporation Tax is paid either by the owners in the form of lower dividends, employees in the form of lower wages and fewer benefits, or customers through higher prices. Corporation Tax therefore is one of the most pernicious of all taxes as it assaults the economy from three angles – investments, jobs and consumption – and hinders economic growth directly.
When leftists talk of taxation their language becomes chilling. Tax campaigner Richard Murphy has referred to taxation being money we ‘owe’ the government . Polly Toynbee, channeling FDR, spoke of taxes being ‘the price we pay for civilisation’. FDR also said that ‘one sure way to determine the social conscience of a government is to examine the way taxes are collected’. George Takei, former Star Trek actor and current Facebook super-star and Obama supporter, has blogged saying, ‘Tax me, please’.
It is difficult for me to truly comprehend the utter wrongheadedness of these arguments. Taxation isn’t money we ‘owe’ the State. To ‘owe’ something to someone implies some sort of voluntary transaction between the two parties. There is nothing voluntary about taxation – we have no choice but to pay and next to no say in the level of taxation or method of collection. Anyone who thinks taxes are in any way voluntary should try not paying them. Money is deducted from our pay at source without us have the opportunity to invest or save in order to offset the financial impact of taxation. Neither are taxes some sort of membership fee. Taxation is money taken from us on threat of violence (if you don’t believe me, look at HMRC’s creepy and authoritarian new ad campaign), spent on things over which we have no say and which are often of little or no benefit to us – or worse, actively harm us and the economy from which we derive our quality of life.
The leftist view on taxation is wrong because their starting point is wrong. They start by asking ‘what’s best for the State?’ Clearly the State wishes and will always wish to grow in size and power, which means an ever-increasing tax take. It is often instructing to consider the actions of the State as if they were the actions of a group of ordinary people. Taxation is then exposed as the activity of a criminal band, the lowest form of a protection racket. Libertarians must fight against this.
I do, however, agree with Roosevelt when he says, ‘one sure way to determine the social conscience of a government is to examine the way taxes are collected’. This story from the dying days of the Labour government shows how HMRC destroyed an entire family in its wrongful pursuit of an alleged (by HMRC) tax fraud. It shows the callousness, the suspicion of success and the readiness to wreck the achievements of others that all too often characterises the actions of those such as UK Uncut. Read it, and worry.
Finally, Takei. George, if you’re so keen on paying more tax just write a cheque. I assure you the IRS will receive it with gratitude!
Tagged with: Nicholas Rogers