Political

Tax policies aren’t just about who gets what money

You judge a set of tax proposals by who gets what money. It sounds obvious, doesn’t it? Who could possibly object to that? Well, for a start – me.

The reason is highlighted by Will Straw’s analysis of the key policy goals laid down by Nick Clegg. Looking at the Liberal Democrat proposals to raise the basic threshold to £10,000 and so take millions out of the income tax system all together, Will judged it on the basis of who gets what in their pocket (or rather, a promise of a shortly to be published analysis of that). But that’s not the whole story.

There is a major benefit which doesn’t get counted in pounds and pence in your pocket from being taken out of the income tax system – if you are the sort of person who struggles to handle complicated bureaucracy, who moves in and out of jobs through the year, who doesn’t have the financial cushion to see them through while tax takes are adjusted and over/under payments come and go. Or indeed, if you’re the sort of person for whom all of that applies.

Among the millions who would be taken out of income tax all together with a £10,000 threshold are many who fall into those descriptions.

People who will benefit from having the hassle of struggling with the tax system lifted from them. People who will benefit from not having to worry about how tax is under or over-paid if they move between jobs or different pieces of part-time work. People who will benefit from not struggling to make ends meet because, while there is a tax adjustment coming down the line, they aren’t getting the money in their bank account right now. People who just don’t have the financial resources and bureaucratic experience to see themselves through dealing with an at times complicated, unforgiving and slow moving tax system.

Making bureaucracy simple for individuals is a much under-rated policy goal. Business and red-tape hogs the limelight in this respect – with the result that we end up with well intentioned policies such as the Office of the Public Guardian mired in over-complicated, expensive bureaucracy that turns what should be a great service for the most vulnerable in society into a service for those with money to spend on lawyers.

So when judging a tax policy – and above all, when judging it by the progressive yardstick – don’t just look at the theoretical implications. Look at the bureaucratic reality too.

One response to “Tax policies aren’t just about who gets what money”

  1. To be fair most Labour people by their very nature won’t understand your points as they’re so locked into thinking that their system is the best – they have no comprehension of what it’s like to exist on the figures that are outlined above and think that people actually think navigating a complicated tax system is something if not enjoyable something people feel is necessary.

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