A taxing time?

So, the circus has started again and the nation enjoys an orgy of political manoeuvering. But am I alone in being frustrated by party politics which seems to be about tinkering around the edges of the economy and lacks any grand convictions to bring about the radical change our nation needs in certain areas to, for instance, eradicate the endemic poverty of 10% of our population and address the burgeoning gap between rich and poor in our society? It seems to me that at least part of the reason for this is that governments just simply don’t have the real power they once enjoyed: it has been reduced by some of our sovereignty being surrendered to Europe and also the multi-nationals companies now wield as much economic power as many national governments and are unelected and accountable to no-one except their share-holders. In a recent, charming, little book by Jonathan Maitland called ‘The Complete and Utter Guide to the 2010 Election’ he points our that, in a list of the  100 largest economies in the World, 51 were companies and only 49 were countries: the oil company Exxon, for instance, being  the same size economically as Chile or Pakistan. One of the many upshots of this, of course, is that such companies have no commitment to community or nations and simply move their activities around to where labour is cheapest: so if you can make steel cheaper in Korea then you close the factories down in Scunthorpe. Whilst whole communities are decimated, the political parties argue relentlessly and with great futility about a few pence here and there on tax or National Insurance.

So does it matter? Well, I;ve just returned from a very instructive few days visiting our link Diocese of Harnosand in Sweden. The Swedes enjoy an unprecedented standard of living and it appears to be largely shared by all. They are not immune to the vagaries of big business having just sold off the lucrative Volvo concern, but things look good nevertheless. I was intrigued to learn that my host, the equivalent of a Vicar and Rural Dean in our system, was paid twice as much as me as gross income, and that this was not an unusual level of payment for Sweden. However, I was equally intrigued to find that he paid nearly half of his stipend in tax-a staggering amount. As we agonise over the levels of tax, stealth tax and NICs in England, driven by an unquestioned desire to pay as little to the government as possible, the Swedes uncomplainingly contribute enormous amounts to the common pot. And they are surrounded by the benefits of that tax: excellent health coverage, educational provision, local infrastructure and much more, and all in a nation of some 7 million people in a land twice as big as England and with a climate that would bring Britain to a halt for six months of the year. Meanwhile, out of the top 30 industrial nations, Britain was 18th lowest in taxation.

If we are going to relegate out politicians and national government to ‘tinkering around the edges’  then let’s give them the wherewithal to do it properly and provide the resources necessary for a good health system and world class education rather than accepting the tired mantra that taxation is a bad thing: as economists say ‘tax is the instrument that helps a society achieve its goals’. If we are to achieve a fairer and juster society and one in which all can flourish and have a hopeful future then we have to pay for it and get out of out collective national meanness. After all, contributing to the whole through tax is one of the most powerful ways we demonstrate that we are a united nation and a caring mutual community and not a self-seeking bunch of isolated individuals.

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~ by Tim Ellis on April 13, 2010.

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