A pearl of wisdom in the Telegraph

Naturally it’s one of the comments left by a reader rather than an article per se…  The quote below that the commenter (subwus) shared comes from a book, Saturn’s Children – How the State Devours Liberty, Prosperity and Virtue.  The authors were Tory MP Alan Duncan and Dominic Hobson:

“It was in order to avoid the attentions of intrusive, inquisitorial and self-interested bureaucracies such as the modern Inland Revenue and the Customs and Excise that voters long insisted that the State fund its activities largely through indirect rather than direct taxes.

Previous generations regarded direct taxation as utterly inconsonant with liberty.From the time of John Locke to the advent of the collectivist age, when Natural Rights were supplanted with the administrative right of the government to levy whatever taxes it judges fit or necessary, most people in Britain regarded their right not to be taxed as rooted in the Natural Law.

History had taught them that it is taxation which enables the State to crush the liberty of the individual – that infinite money is the sinews of all forms of State power, and not just of war – and that well-financed governments are even more capable of pursuing policies which are dangerous, misguided or foolish (the previous Labour administration is a good example I would say) than poorly financed ones.

Throughout history people resisted those taxes – Poll Tax, Hearth Tax, even a universal excise or an accurate wealth tax – which necessitated an unconscionable invasion of personal privacy and freedom. They knew from bitter experience that the essence of any tax is the taking of money, property or a service by the State without paying for it, and that transactions of that kind can only be sustained by a mixture of fear and punitive sanctions.

All taxation was of necessity tyrannical, and a great tax was a great tyranny, but a direct tax was potentially the most tyrannical of all. It was the point of naked confrontation between the individual and the State, where the State had the power to ask how much money each individual had, how he earned it, and how he chose to spend it.”

‘How times have changed,’ subwus goes on to say.  He continues, ‘Now the Tories are trying to justify more expansion of the tax bureaucracy to intrude into the lives of ordinary people. Then again, I gave up on the Tories meaningfully rolling back the State years ago.’

Indeed. The reason why so many people have given up on the Tories is they have sold out their principles.  They no longer believe in anything apart from power for its own sake.  They have realised that embracing the ruinous system rather than reforming it pays for them and the powerbrokers they bow to behind the scenes, regardless of the damage it does to the legion of smaller wealth creators who just need the state to get off their back.

What the extract above does is prove a rule of thumb holds, that we should judge them by their actions, not their fine, soothing words.

2 Responses to “A pearl of wisdom in the Telegraph”

  1. 1 EForster 07/12/2012 at 12:08 pm

    The so-called direct taxes have multiplied over the years and now people generally believe, that by paying income taxes they really are bearing the burden of taxation, which the state demands of them. Hence the uproar when some persons or companies are supposed to be not paying their fair share.

    Actually, the burden is entirely borne by consumers. It is easy to see why. The whole edifice of commerce is supported by consumer spending. When people work for their living, they are satisfying some need that consumers at the end of the supply chain demand. It is consumer spending that gives them their income and the money that goes towards tax. The entire chain of suppliers delivering the final goods and services to consumers rely on the payment of all costs, including all taxes levied, by the end consumer. If it was otherwise these suppliers would become insolvent. There would be no work. To exist we have to sell our services to each other and the web of commerce provides the opportunity.

    The burden of taxation on consumer spending is very far from evident as the various contributions to taxation cannot be tracked through the chain of supply by the buyer and the bill only appears surreptitiously hidden in final retail price. Only VAT is seen at the checkout.

    But this is a gift to political manipulation of voters. It is very easy for low paid workers to believe that they do not pay much tax, when they pay no income tax. It is very easy for them to vote for more benefits, because they believe that someone else pays for the welfare state, such as higher income taxpayers, and not themselves. Even altruistic barons of industry believe that they should pay their fair share of taxation. They do pay tax, but only when they spend their disposable income. Naturally high earners will spend more and contribute more in tax, but voters should understand that we all pay tax at the same average rate as though it was an extra, but hidden, VAT.

    It would be a simple matter to recognise reality and simply tax consumption directly and explicitly, but politicians would then lose their principal tools of political persuasion.

    Ironically, politicians, and seemingly economists too, have reversed the meaning of direct and indirect taxes from their true effect. It is income tax, that is the indirect tax, but on the consumer. What workers really earn is the ‘after tax’ money, that they can take home to spend.

    For every £2 we spend today, £1 goes to be spent by government. It is as if when we buy a vacuum cleaner someone paid by government gets one too. The ultimate twofer.

    [With say £50 from us in tax, the government can write a cheque for £100 to buy the same product we did, because it gets £50 back in tax on the purchase. When government spends, its purchases are tax free!]

  2. 2 subwus 17/05/2013 at 9:05 pm

    Looks to me that my comment now has some direct philosphical relevance to the situation over in the US, with regards to their IRS targeting Tea Party style groups.
    Kind regards, subwus.

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