A week or so ago, I commented on AccManPro that I disagreed with pretty much everything that appears on the taxresearch.org.uk blog. One of the commenters there asked me to expand on this and to explain why I thought the ideas being discussed were wrong. I sense that I was being baited but what the heck....
I was going to write a long piece on the ideas behind "tax justice" and the silliness intrinsic in it. However, I found it getting unnecessarily wordy so I thought I'd highlight examples instead:
1) The primary fallacy seems to be the tendency to start from the perspective that your money is the state's - and that you should be allowed to keep what is left after the state has taken what it wants. This perspective is then used to argue that arranging one's affairs to reduce tax liabilities is somehow "taking" money from others. To see why they can think this, you must put yourself in their heads. They start with the assumption that the £100 you just earned is the state's. If you pay 41% tax on it, you're allowed to keep £59 of it - they'll give you the £59, in other words. However, if you find a way to make the tax liability 40%, say, then the state would have to give you £60 back. You've just been given an extra £1. And here's where it gets screwy... they seem to be claiming that this £1 has been funded by somebody else. Yes. That truly does seem to be the thought process. The idea that the original £100 was yours to start with seems completely to escape them. Bizarre.
2) The headline on this piece on a different website related to tax justice shows the "interesting" level of economic literacy prevalent in this field. There seems to be a belief that poverty is "caused" and that, naturally, it is somebody's fault. Sorry, folks. Poverty is not "caused". It is the natural state of humanity. The story of the last five hundred years has been our discovery of how to escape it by creating wealth for ourselves and for others. It is clearly true that many, many people are doing a lot less well than we would like. However, any analysis that starts with the assertion that this is somebody else's fault is not going to lead to anything sensible.
3) Anybody who disagrees with the tax justice crowd is "greedy". See this comment to somebody upset by the impact of inheritance tax. One can argue about the merits of inheritance tax or explain why one believes a tax paid only by the stupid and the unlucky is morally justifiable but note that this isn't what happens. Instead, the ad hominem is deployed. Lovely.
I should point out that I am sure the tax justice crowd are well-meaning, pleasant people. Indeed, I am sure I could spend an enjoyable evening in the company of such people (and I am sufficiently polite in person that I'm sure they could tolerate me!). However, I don't think they would manage to persuade me that this movement is one to which I should subscribe.
I notice that Tim Worstall also sometimes links to taxresearch to take issue with them. Well worth reading.
[EDIT 2007-09-02 19:08 Corrected typo and added link to Tim Worstall]
[UPDATE 2007-09-03 17:23 Richard Murphy has responded. http://www.taxresearch.org.uk/Blog/2007/09/03/tax-justice-2/ ]