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Uber Member
Join Date: Sep 2004
Location: Woking
Posts: 30,819
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Will green taxes start a revolution?
http://www.timesonline.co.uk/article...429172,00.html
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Voters are already disgruntled and sceptical — just wait till they know exactly how their money is being spent
I AM NOT a scientist or an economist. I am not qualified to comment in detail on the Stern report or the environmental warnings from Al Gore (mind you, most of those who do comment on these things are not qualified to do so either, but let that pass). This is complicated science, much of it new. I have, however, spent ten years on a low-impact experimental farm and take a reasonable interest in sustainable agriculture, reducing pollution, discouraging Jeremy Clarkson and not laying waste fossil resources and biodiversity. That’s where I am. Not an unusual standpoint.
Yet one aspect of the current environmental furore sorely needs a lay challenge: the concept of “green taxes”. The Chancellor is — we are assured — planning new levies on motorists, aircraft passengers and wasteful household purchases. Landfill taxes will cause local authorities to reduce their waste collection services and gleefully surcharge heavy bins. One report estimated the green tax take at an average of £1,300 per year per family. Any dissenting politician can be vilified as a filthy polluter who doesn’t care if half the world gets scorched and flooded. For a chancellor, green taxes are dream taxes; fluffy bunnies amid the dark vulturous impositions associated with paying for duller, harsher things such as cluster bombs and Ofsted.
Alas for chancellors: the sad political truth is that we’re not convinced. Not any more. Inch by inch, year by year, the electorate has lost confidence in government housekeeping. In a phone-in on defence spending the other day — and God knows the poor military need more than they get — most callers were sceptical. They didn’t think of it as “defence” spending but as attack spending — invasion spending. They resented that. Nor, in other areas, do many taxpayers believe that their money is wisely used. Not after the Tory poll-tax fiasco, the Labour Millennium Dome and the explosion in government advisers and PRs; not when ministerial pensions — even for the most disgraced, even for those who write self-serving and indiscreet memoirs — outstrip those of useful citizens.
It is hard to trust the environmental language of government when Whitehall windows blaze empty at night and leaders jet round the globe in spacious comfort for specious reasons. Quangos cost £22 billion a year; local government pension schemes have a deficit of £27 billion which we will have to pay; each member of the ineffectual European Parliament costs two and a half million a year to run. Most UK government departments overspent their budgets last year. Since 1997 the number of tax collectors has risen twice as fast as the number of nurses.
So green taxers will have a hard time to convince us (even if David Cameron sticks a quixotic windmill on Downing Street). There are small areas where a merely punitive tax helps — the Irish did well out of charging for plastic carrier bags, and more people now bring their own. Fair tax on airline fuel would reduce emissions. But by and large, taxpayers suspect that green tax will not improve parks, save wild countryside or discover new energy sources. We think it will go into the general pot and get squandered; just as only 15 per cent of vehicle tax is spent on roads. We are well aware that “national insurance” is no such thing, and will not return most of us a liveable pension, a fast clean hospital or decent care in old age. It’s not insurance, it’s plain tax. The name means nothing. Maybe we have a case under the Trade Descriptions Act.
This brings us to the concept, deeply unpopular with governments worldwide, of “hypothecated taxation”. A hypothecated tax, for those one chapter behind me in the textbook, can be used only for a specific purpose. Our one clear example is the BBC licence fee; we know who gets it and what they spend it on, and grumble accordingly. Beyond that, ministers hate the idea. So do Shadow ministers, though Oliver Letwin once supported a campaign whose members want to divert the defence portion of their tax bill on to “peace-building initiatives”. Otherwise, politicians view hypothecation as a diabolical interference with their freedom to spend. In the US it is called “lockbox government” by detractors, who say that even putting airport or highway tolls into special accounts diminishes flexibility. On the other hand, if you think about it, those private-finance contracts for schools, hospitals and prisons are effectively hypothecating decades’ worth of future money to fulfil those contracts, so ministers don’t seem to mind doing it when it suits them.
But it might suit us to have real hypothecation. It might give us more faith and willingness to pay, and force governments to work on a longer timescale rather than chucking out bribes every four years and featherbedding hospitals in marginal seats. Savings or overspends could be announced in each area, and the next year’s take adjusted accordingly. We would feel a glow of virtue whenever we saved our school or doctor money, and a corresponding righteous irritation when our neighbour wasted it.
Tax experts, ministers and professional politicians roll their eyes and sigh whenever the subject is mentioned, accusing proposers of populist naiveté. But in an age of mistrust and contempt for politicians, hypothecated income tax might be a transparent way to get individuals to pay for what the country needs, and to comply or protest with greater economic literacy. It might even be good for us to be forced to realise how much it costs to run health and welfare and education and justice, how much we subsidise transport, where the income from court fines goes, what the latest wars are costing and how great is the cost of the government machine itself. It would certainly make tax demands more interesting to read.
On the other hand it might lead to revolution. But they’re always saying they want more political engagement from the disgruntled masses, aren’t they?
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This drew this comment
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The drive for Public Health and the construction of sewers was the Victorian equivelant of climate change and the vast expense involved was accepted. The problem is today that nobody believes that politicians will spend wisely since all our experience is of incompetence or outright peculation. I think that this government has brought the possibility of revolution much nearer - I 'll bet for example the protest vote for UKIP is growing rapidly. If they got 50 seats a the next Parliament that would concentrate minds wonderfully
David Kay, st legier, switzerland
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02-11-2006, 11:06 AM
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