TAXATION AND SPENDING POLICY
Nothing is free
We only get
What we pay for
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Summary and Aims of our policy.
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We have the simplest fiscal policy in the world, our goal is to completely simplify and straighten out the tax system.
We see one simple answer to the never ending tax and spending debate, everyone pays for exactly what they get, it's just that simple! How can any fiscal policy ever have integrity or be acceptable to all people, if you do not get what you pay for, why would we ever want such a system? We understand this raises some questions, and many might ask how low earners will afford to pay, however our policies give everyone full opportunity to earn a wage that comfortably meets their costs of the public services they receive. In summary then the goals of our fiscal policy are as follows:
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Simplification of the tax and spending (fiscal) system.
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Reduction of wealth inequality.
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Accountability: To ensure that what a tax payer pays in, is exactly what they get out.
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Transparency: Every tax payer can see easily and exactly, how much tax they have paid, and where it has been spent.
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Current unresolved issues.
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Our current tax system is one of the most complex in the world, we have numerous taxes, many of which are extremely complex in themselves, such as corporation tax, business rates, and PAYE, and therefore people have little or no accurate knowledge of how they are taxed. Some of our main taxes are as follows: income tax, PAYE, national insurance, VAT, council tax, business rates, corporation tax, inheritance tax, stamp duty, capital gains tax, alcohol duty, fuel duty, road tax, insurance premium tax, dividend tax, tobacco duty, the list goes on and there are over thirty of them!
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Once the taxes are collected they mostly get mixed up in a single pot, the treasury. From the treasury, the government then decides how this total tax income is spent, about one £trillion each year or %40 of GDP. We believe there are some very fundamental problems that are created by this system:
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There is no integrity to our tax system, it lacks any sense of responsibility, and accountability.
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As described above taxes are pulled from many different sources, some of which receive almost no benefit from that tax, such as business rates, and then are all mixed up, and sent to different public services, projects, and institutions. This means that everything is being manipulated all the time, government is constantly trying to make one area of taxation pay for another area of spending, that is not related to the area of taxation. For example businesses pay a huge amount of business rates, but this money is never spent on benefiting the businesses who pay it, it might be spent on transport, or defence or social care instead, so where is the integrity in the tax, what do the businesses get in return for their tax payments, which ultimately are paid for by the consumers? This phenomenon of not getting any direct correspondence between what you pay in tax and what you receive back in public services, is a complete lack of integrity, responsibility, and accountability in the tax system, and it will always lead to the endless heated fiscal debates we have and widespread dissatisfaction with the tax system.
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Total disconnection from the reality of tax and spending, due to a complex tax system which few understand, resulting in the widescale disempowering of people:
As explained it is very difficult to understand how you are taxed, unless you are an accountant or similar professional, and it is even more difficult to find out exactly where your money has been spent, as it all gets mixed up in one pot, and is spent on many different public services and projects. We have tried going online and finding these answers, and found it difficult.
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Because no one generally knows about the taxation and spending, of their own own tax, or the countries tax in general, many false ideas regarding tax and spending start to become common. One idea is that if a public service is offered at no cost, then it is free, clearly nothing is free, someone always pays for it. Other misconceptions are that the government is unfairly withholding funds for itself from public services, or the government is being unnecessarily austere with spending. These ideas are incorrect because generally there is a constant shortage of tax revue for public services, and therefore the government is constantly struggling to find resources. This means everything the government collects in tax, it rapidly spends on some form of public service, and usually more, as debt often rises. Others might believe the government is corrupt and extracting money from the tax system, but we believe the British political system is one of the least corrupt in the world.
Another common false idea is that people sometimes feel the government should lower tax, and increase public spending, this is clearly completely impossible to sustain, even with increasing debt, as it would bankrupt the country. News on television quite often shows interviews where people are asked what they think the government should do, and they reply 'increase spending on health, and lower income tax'. This does not really represent a realistic understanding of the fiscal system, when has someone said 'I want a better health service and I therefore want to pay more tax for it'. This lack of knowledge fundamentally disempowers people in their everyday lives, as it disconnects them from the importance and use of the tax they pay.
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As explained another major area of difficulty is endless debate and argument on what money should be spent where. Because nearly all tax is mixed together in one pot, there is no direct correspondence at all between what an individual pays in tax, and what public services they get in return. It is inevitable that this will create endless dissatisfaction for pretty much everyone in the country, and cause ongoing argument and conflict. This dissatisfaction occurs at all levels, the people of Britain argue with and lobby the government to spend more in certain areas, and tax less in other areas. The political parties endlessly argue amongst themselves about how public money should be spent, the wealthy can feel despondent because they can pay far more into the tax system than the average, the honest working person may feel they are paying too much also. Those who do not work, can be funded by others, causing irritation to the tax payer, and disempowering them also as they are not fully motivated to work, and have the pride of it. Possibly the most irritating thing of all is that some of the wealthiest people pay little or no tax, on account of various tax havens, or living abroad.
A final issue with the tax system is inefficiency: It takes a huge amount of resources to collect many different complex taxes, this is inefficient, and costs a lot of tax payers money. Because the taxes themselves can be extremely complex, this also encourages tax confusion and disputes, some of which run into seven figure court cases.
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A summary then of the problems with our tax and spending system are as follows: Complexity, causes a complete disconnection of people from what they pay in tax and what they get in return, which in turn encourages misconceptions about fiscal policy. This disempowers everyone as they do not feel the know where they stand, many feel unhappy with the deal they get. There is continual argument about how tax is raised and spent, and distrust of the government is widespread. No one ends up feeling proud of the tax they pay, and the public services they create for themselves, and there is a general dread of tax, such that most people try to avoid or minimise their paying of it. We do not feel this is a functional position, and we therefore have policies to resolve all of this.
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Our Policy - How it resolve the issues and achieves the aims.
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There are two simple, basic features of our fiscal policy. The first is to simplify and replace nearly all tax with a cost based system, indeed we want to eliminate the idea of tax altogether and replace it with the concept and awareness of cost. The second is to make all collecting and spending of tax traceable and transparent. Essentially our policy is to straighten everything out and then make it all visible to everyone.
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We believe that it is an absolute basic characteristic of any civilised and functional society, that everyone has full responsibility, and accountability, these are two of our core values that we uphold at all times. This means if an individual wants a service, they pay for that service exactly, no more or less than it costs to provide it to them, this is fair. As we have explained this is not the case at all at the moment, everyone pays different amount ranging from zero to more than half their income, and receives different amounts of benefit in return.
In our system of tax, all the taxes where people pay something but get little or nothing in return, would be reduced or completely phased out over time. There is no integrity in collecting a tax from someone if they get nothing in return, and it may sound strange to suggest that this even happens, but it does all the time in our tax system. Some of the biggest examples of this are business rates, and corporation tax, most businesses pay these substantial taxes, but get little or nothing in return. Taxes on businesses are ultimately taxes on everyone, because they increase the costs of all the products we buy, ultimately us as the consumer therefore pays for it. The loss in revenue by phasing these taxes out, would then be replaced by people paying directly for the services they use. Similarly where people pay little or no tax, but continue to get public services this also would be phased out, thus achieving a completely fair tax system. The basic ways we would achieve this is as follows:
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Spending:
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Health care (£212 billion annual cost): The total annual costs of health care would be divided by the number of people of working age in the country (33 million), and then everyone would pay this fixed amount. This is an entirely fair system where everyone gets full health care, and everyone pays the same amount for it. (£6,424 per person per year).
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Education and defence (£157 billion annual cost): Everyone adult was educated, and every person is being defended by the British military. Therefore these costs will be paid for in the same way as health care, so that it is the same amount for everyone. (£4,757 per person per year).
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Pensions (£141 billion annual cost): Everyone has a government pension pot, which they individually pay into. What ever they put into this pot, is exactly what they get out of it, anyone can go online and immediately see how much they have put in, and what their pension is therefore worth. There is no directing, or spending of this money elsewhere, your money stays in your pot, an entirely fair system. (£4,272 per person per year).
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Housing and unemployment (£136 billion annual cost): No one will receive any benefits, unless they pay for them, so there will be jobs made available to anyone out of work at their local job centre, and with these wages they will be able to pay for their living costs.
Transport (£44 billion annual cost): Transport will be paid for by the people who use transport, so their will be a tax on fuel, and electric car charging, which exactly and proportionately matches the amount of use a person has of the transport system, and the costs of it. This tax will reflect the environmental implications and costs of electric transport, versus polluting transport. Again this tax will not be directed, or spent elsewhere, meaning it is entirely fair.
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Policing, and criminal justice system (£44 billion annual cost): These costs will be paid for entirely by people who break the law, not the tax payer, meaning it is entirely fair. See our Criminal Justice Policy.
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Interest on national debt (£97 billion annual cost): Our policy is to reduce national debt to zero, as we do not believe using tax payers money to pay interest is the correct policy.
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Alcohol and tobacco: Currently there are taxes on these products, we would continue with this, but only at a level that correctly reflects the costs they incur. By this we mean the extra costs to the NHS from the adverse health effects of alcohol and tobacco, would be calculated and then added as a tax to these products, and spent directly in the NHS, and no where else (this would decrease the health care costs quoted below). In this way people have the total freedom to drink and smoke what they wish, but in line with our core values and policies, they will have the full accountability of it also, this is a fair system that has full integrity.
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Other services: All the other services we have would all be funded on similar cost based approaches as above, and in these ways they would all be fair and have full integrity.
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Tax collection:
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Given the system above, the idea of tax is almost eliminated, and instead you have cost. Nearly all the taxes people and businesses pay would be phased out. People would not pay tax generally, they would get an itemised bill for their costs of the public services they use. The yearly bill would look like something like this:
Health care £6,424
Education and defence £4,757
Pension £4,272
Total £15,453
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This bill puts people in the truth of what things really cost, it means what they pay for is exactly what they get, it therefore has total responsibility and accountability. Many people may find these costs alarming (see below for help with this), but it is important to remember that this is the truth, there are many taxes that everyone pays, much of which go unnoticed, as they are unnoticeable in our economic systems. Most people are largely unaware of the VAT, business rates, and corporation tax they are effectively paying when they buy products and service, and there are many other hidden taxes. Generally people are paying much more tax than they realise, this disempowers everyone, as they do not understand what things really cost, and how they are paying for them. We want to change all of this and make the whole system fair and transparent so that people know what they are paying, and they are proud to do so, because they will get exactly that back in quality public services. Not only will people be proud to pay in this way, it strongly encourages them to take care of all public services, so that ultimately they pay less for them, this is a crucial part of accountability which we wish to encourage, as it benefits everyone.
We would continue to have only one tax and that would be income tax, however the starting threshold for this would be increased, so that only high earners pay income tax, most people would not pay any income tax at all. The reason we would continue with this tax is to reduce wealth inequality. We believe it is essential to encourage our entrepreneurs as they drive industry, create jobs, and therefore create wealth for everyone, and they should be rewarded for this valuable service to society. Income tax for high earners therefore must be balanced, not to low, but also not so high that it drives all of the entrepreneurs and their essential skills and ideas, out of our economy. However not only do we have a policy of reducing wealth inequality, we also have a policy of discouraging excessive consumerism and consumption, as we don't believe this is good for anyone, so for these reasons we would retain income tax, and use this for public services.
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Low earners would continue to receive tax breaks, so that their tax burden is manageable, and parents will be fully supported, see our Parenting Policy.
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Another core feature of our fiscal policy is to increase the national minimum wage, so that anyone can comfortably pay their public services costs. We believe that there needs to be a greater equity in how we value peoples work, we believe there are many low paid jobs which undervalue the people in them, and there are high paid jobs where people are over valued. We wish to bring this into a more equitable balance, so that everyone is highly motivated and professional in their work, and is rewarded well for it. This is backed by government jobs being available to anyone who is out of work, no one will receive money from the tax payer, unless they have earnt it.
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The final feature of our fiscal policy is public consultation. We wish to place key decisions in the hands of the public. One of the issues we highlighted above, is the constant debates and arguments over how much we spend on public services. We want to resolve these debates permanently, so that the people of Britain get what they want. The way we would do this is by simply explaining what the different parts of public services cost, and then ask people if they want to have these services or not, through referendums. For example, do people want an all inclusive NHS that provides the entirety of all the physical, mental, and community health care people need, and therefore pay the higher costs of it, or do they want a reduced service? The same principle would be applied to pensions, and other services. So we believe it is time we stopped arguing about things like this, and decided once and for all, as doing so will be highly beneficial to everyone.
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The move to our fiscal policy, would need to be done in stages and steadily, so that the shock of change is minimised, and the benefits of change are maximised. Our policy and figures here are very basic, and there are many details we have not explained, such as the step by step plan. However we hope that this makes clear the basic principles of how we will run the fiscal system, when in power we will publish the full plan, in simple terms, so that everyone is fully aware of what they will pay, and what they will get.
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Achieving the entirety of our fiscal policy, and its supporting policies, would represent a total change in the work and fiscal consciousness of society. Everyone will be fully empowered, they will wake up on Monday morning being eager to go to work, they would be proud of everything they do at work, knowing they will be rewarded well. They will be happy to pay their costs of public services, and have the pride of doing so, knowing that what they pay for, they will exactly get back in quality services. Everyone will take great care of, protect, and value, the public services we have, making them much better places to work in, and use, and we will finally have a fiscal and public services system that everyone is happy with!
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Wellbeing and cost benefits of this policy.
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We are unable to find the costs of collecting all tax in this country, but they are very significant indeed. For example every council in the country has a business rates office, with numerous people doing nothing other than rating buildings and collect the business rates tax, and an additional 66,000 people work in HMRC collecting tax costing maybe £2.5 billion per year. All of this would go in our system, and be replaced with a simple computer system and maybe 1000 people maximum, see our Automatic Accounting & Taxation Policy. The people liberated can then do value adding work such as careers in public services, and industry. There would be many other associated cost savings such as accountancy costs, all the costs of tax avoidance, disputes and their resolution, etc. All these stresses of tax collection will be greatly reduced, and people will be happy with the fiscal system, brining great wellbeing benefits to everyone.
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Supporting policies.
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Automatic Accounting & Taxation Policy
Standardisation & Simplification Policy
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Witten by Marcus white © 2024, updated 8-5-2024.
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