Magazine article Soundings

Tax: A Political Fault Line

Magazine article Soundings

Tax: A Political Fault Line

Article excerpt

Richard Murphy, The joy of tax: how a fair tax system can create a better society, Transworld Publishers 2015

This is a book that, in spite of its apparently precise focus (tax), carries an argument that is impressively broad in its implications. It includes minute excavations of details about taxation and also immense claims about the difference that could be made were we to take those details seriously. In this weaving together of different levels of argument it is both exhilarating and an example to be replicated in other 'policy areas', as we call them. Its aim is to pick apart and to challenge at a fundamental level the hegemonic common sense about taxation and its role in society. In the unthought assumptions of everyday speech, tax is a (necessary) evil. That common sense itself of course has implications - it is anti-state and individualising. Murphy will have none of it: 'tax is not about oppression, a loss of freedom or even a loss of income; it's ... about how to make collective choices that work best for the communities we all live in' (p67). And 'tax systems ... are the best mechanism by which an elected government can embed the social values it represents in the economy that it is charged with managing' (p104).

Campaigns around tax have been among the most successful so-called 'single-issue' movements of recent years.1 And it is good to read here of their many successes. The public face of these campaigns, though, has been mainly around the multiple evasions and corruptions in and of the current system. Here, Murphy takes things a step further in a challenge to the system as a whole and the way we think about it.

There are some technical discussions, and some arguments I left question-marks beside. There is a pugilistic style; and occasional recourse to assumptions about our human(e) nature. But it is all worth it for the overall argument.

The two concluding chapters of the book present, in turn, a sketch of what an ideal tax system might look like, and a proposed budget speech for a Chancellor that might aim to begin to move towards such a system. In terms of immediate policies there is much here that has been argued for in Soundings and in the Kilburn Manifesto, but also much more. There is the argument for shifting the basis of tax away from work and towards all income, in particular income from assets. Prominent here is an argument for a Land Value Tax, as part of a more general taxation of wealth. (The argument for taxes on wealth, as distinct from earned income, is not only right in principle but also becomes more urgent with the current shape of the economy - and of inequality - in which income from rent from various forms of assets is so significant.) Also among the proposals are a new Investment Bank, a programme of infrastructure quantitative easing, the guarantee of a universal minimum income, a financial transactions tax, a progressive airusage tax on plane travel, and what Murphy calls a Carbon Usage Tax. This last is proposed as a progressive tax on all financial flows through bank accounts and related payment systems, and is intended to shift taxation away from work (again) but this time towards consumption. 'Over time the rate will become progressive: the goal will be to entirely replace the regressive national insurance charge that at present discourages employment with a new progressive charge that will discourage excessive consumption in a way that no tax in the UK does at present. We know that this is necessary: we cannot afford the excess consumption that is fuelling global warming. …

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