It is quite common for people to simultaneously request lower taxes and more investment in services. If this is not achieved then it is due to government inefficiency, and only by putting in place some sort of privatised middle man can we reduce costs. Most people don't actually notice the tax they pay, of course they want more income and to pay less for goods, but they don't notice the tax. However those that pay a tax bill are far more likely to be notice the amount of tax they pay, this is usually the higher earners, including the media and opinion formers.
One of my motives for considering this is due to the many discussions now taking place on the merits of a flat rate income tax, something I oppose simply because in changing our existing system we would without doubt move the some of the tax burden from the rich to the poorest.
What I would like to see is a way of "hiding" the tax collection, this would serve to reduce the animosity and hopefully simplify the collection. So far the best idea I have come up with is a small micro tax on transactions collected from the banks, who then pass on the cost via interest rate changes rather than flat fees. If this is successful we could possibly remove income tax, which is not really paid by salaried individuals but taken before they receive their real wage. Transaction charges exist at the moment in the form of VAT, but is equally awkward to collect as "VAT deductable" is a complex science.
There will always be a debate about how much tax should be raised, big government versus little government, which is fair. My concern is that too much debate is driven by the feeling of being "hit" by a tax bill, and also a feeling that "my" money goes towards other people. The other area that should be covered is to ensure that people receive a tax invoice, marked paid, indicating what services they have consumed, which I suspect would be a surprise to many; we just need funds to pay for it.
2 comments :
How would you deal with the raft of people who deal in cash only and rarely if ever use a bank?
I would probably expect this system to be targeted at business rather than individuals, and I assume a business is less likely to run on a cash basis. Furthermore, I would expect the number of cash transactions to decrease as the business grows. A peculiar function of the current system is that many large organisations are able to avoid tax, but I expect they would not be able to avoid bank transactions.
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