For now at least there is merit in the phrase: ‘There are two things in life that are certain, death and taxes.’ With this in mind I have drawn up a by no means extensive list of taxes that we currently do not use. After all if we are to always have taxes and I accept and often promote the fact that there is undeniable merit in having them. For obvious reasons the state needs money notably for security and social provisions, but it is important that we get them right. Sticking to Adam Smiths four cannons and the more progressive area’s of taxation I look at the following:
A land Value tax –
A tax on land – this is would most probably be in place of many of the current taxes indirectly levied on land via property, that are not always the easiest or clearest to collect or measure and can have the effect of creating a land hoarding culture.
More can be found on LVT here: Land Value Tax
The Mansion Tax-
Proposed by the Liberal Democrats as a way of differentiating themselves from the Tories in government this idea quickly became Labour policy, an annual fee for having a house worth over £2 million pounds in addition to the council tax. Again this idea has merit but it is probably far more practical to have another band of council tax and undertake a serious review of the council tax bands. A A remeasuring of the relative values of peoples houses is needed now as so many houses now are growing in price faster than they can be brought or sold. More can be found on the Mansion Tax here
Graduate Tax –
A graduate tax would be a small income related tax and would work very similarly to the current fee system but would mean that universities would have the funding upfront and thee would be no fee element to the amount owed so if a graduate landed a high income job thy would pay more over the time that the ta would apply than a gradate that landed a lower paid job. The argument is that taxes are more likely to put off those from a more affluent back ground than those from a poor one where as fee’s put off those a the lower end of the income spectrum and make the availability of payments upfront by wealthier students a possibility. Though evidence is showing many different things so the jury is out on this one. More can be found on the Graduate Tax here. Though my stated preferences can be found here.
Financial Transaction Tax – (AKA the Robin Hood Tax) –
This is a small tax on financial transactions that it is estimated could bring in around £20bn for the treasury, with many prominent economists coming down on both sides this is a hot topic at the moment. A tax that has developed from the Tobin Tax which is aimed not just as generating revenue but at stabilising financial turbulence in the stock and currency markets. The EU wanted to impose it across the union but Osborne has since spend millions fighting it claiming that it would harm the city of London.
As little as I like to admit it he is probably right that a traditional FTT as seen in Sweden which without unanimity would drive the highly mobile financial transaction’s abroad. This is what happened to Sweden in the late 80’s – 90’s as a variant of the tax that effected financial transaction in Sweden. This was a pretty bad policy and it led to a massive fall in the competitiveness of their financial sector as transactions just happened elsewhere, though many of the companies remained there.
George however missed the point that it is perverse to say that because Sweden implemented a tax in the wrong way, that the UK could not have a tax implemented in the right way, raise billions and not harm the city. Does he doubt his own ability to do this?
Stamp duty for example which effects all financial transactions on shares wherever they are sold by a UK based company seems fine. So it is also perverse that Osborne can talk of the effect on the city while pushing through the bankers levy ( a perverse money grab on ordinary citizens by the back door) or the success of Labour’s bankers bonus tax which was a much better way to punish the greed of some bankers while leaving the money in the bank that belongs to the citizens. More on the Robin Hood Tax can be found here.
These are just some of many taxes that are and should be open to debate, I am not saying these are the best cures for many of our ill’s or that taxes alone could solve societies ill’s but if any can they might well be on this list.