Taxation- My views explained

One of this blog's regular readers- Jo has pointed out that my last post might imply that I am in favour of a universal poll tax to replace income tax. For the sake of clarity I thought it would be best to state out the Lyon Tax Plan in full:

I operate from two clear principles:

1. Taxation is a bad thing. It might seem surprising to have to state as much but given recent governments' addiction to expensive programmes and their unerring certainty that they must be the best people to decide how money is spent.

We must never forget that people work hard for their money. We are able to tax them because government has a monopoly of organised violence in a country. We don't know what they would spend it on otherwise but I'm sure we would all agree that violence is a bad thing and that we should avoid using it, or threatening to use it, whenever we can. We should therefore tax only when absolutely necessary.

Taxation is most reprehensible when it denies people the means to pay their own way, or when it endangers economic activity that could allow people to do so.

2. We do need some taxation. This is unfortunate but we need a police force, courts, armed forces and various other odds and ends. These cost something.

We must therefore:

CUT- Capital Gains Tax, Stamp duty and similar (these are a tax on enterprise and investment)

INCREASE- VAT, specifically on goods and services which have "negative externallities," that is, things which damage other people as a side-effect.

REDUCE AND SIMPLIFY- We should take as many people out of income tax as possible but not use the tax system to hand out "credits" as the current unelected regime does. The band below which people do not get taxed should be raised to well above a living wage (say £20k) and a flat tax should be instituted on those above it.

Ideally we should not tax anyone on income at all (A tax on work? Which brainbox thought that one up?) but as long as we need one lets reduce and simplify it. This may put a load of pointless civil servants out of a job (kind of like how living longer puts undertakers out of work) It will however cut costs, allow further tax cuts and make it easier to calculate how much tax you owe- thereby further raising the tax yield.

As this applies to the story below it would lead to cuts in the bills for all payers (even the big earners) and mean that fewer people had to pay it.

The sooner we accept that taxation is a bad thing the sooner we will come round to my solution of reducing it for everyone and eliminating it for as many people as possible.