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July 27, 2012 / politicsbitesize

Tax is such a dirty word

Boring, pointless, burdensome and dirty. Tax can be described in many ways but the terms are mostly negative. It can be argued that the majority of people worldwide consider tax to be a burden: something they have to pay. In fact, Black’s Law Dictionary confirms these beliefs by defining tax as a ‘pecuniary burden laid upon individuals or property owners to support the government […]‘, which is ‘not a voluntary payment or donation, but an enforced contribution‘. Tax, it seems, is therefore understood as something that is paid to support A. N. Other.

Tax takes on many forms such as Value Added, Council, Capital Gains, Inheritance, Stamp Duty and Income. The first recorded occurrence of Income Tax being taken in the UK was in 1188. King Henry II introduced the Saladin tithe in order to raise money for the Third Crusade. However, the type of income tax we all know today was first introduced in 1799. In his December budget of 1798, William Pitt the Younger announced that an Income Tax would be levied on all annual incomes over £60 in order to pay for the weapons used in the Napoleonic wars.

Since its introduction tax has caused emotions to run high. There have been many revolutions throughout the world against the payment of taxes. As far back as 160BC the Jews revolted against the high taxes imposed on them by the Seleucid Empire; in 1794 there were protests over taxes, dubbed the Whiskey rebellion, in Pittsburgh, USA. As recently as the 1990s, Britain saw thousands demonstrate against the proposed introduction of the Poll Tax, which was later to become Council Tax.

In the 21st century we are still squabbling over the moral repugnance of taxation, only today it is the avoidance of paying it that is causing the problem. As a result of exposing Jimmy Carr’s involvement with a tax avoidance company in Jersey, a crackdown on companies involved in such practices has been announced this week.

The Exchequer Secretary, David Gauke, is proposing new powers for Her Majesty’s Revenue and Customs to enable them ‘to demand more information from [tax avoidance] scheme promoters’. According to the HMRC around £4.5bn is lost to the Treasury each year by people using these schemes to avoid paying the correct amount of income tax.

Mr Gauke also came down hard on the practice of paying ‘cash in hand’ for services such as plumbers or cleaners. He described this way of settling bills as a tax dodge that is ‘morally wrong’ and one which costs the economy a further £4bn a year in lost revenue.

Many consider tax to be an imposition on their personal income and it is easy to see why some people may choose to avoid paying it. But whether it is the big celebrity using expensive tax avoidance schemes or the plumber being paid cash in hand, avoiding contributing to the tax coffers has a detrimental impact on society as a whole.

If we all stopped paying our taxes soon there would be no funding for our education system, the NHS, the police force, the fire brigade, our ambulance personnel or the military. No longer is tax paid to the government for use in wars and weapons only; it is paid to them so that they may fund our vital services. So, as long as these services remain publicly financed, perhaps our attitude towards paying our fair share should become a more positive one.


One Comment

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  1. otmaneelrhazi / Jul 27 2012 11:07 am

    Reblogged this on Forex Prop Trading.

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