I was reading a conversation on twitter that gave me some pause. There seem to be an increasingly vociferous number of commentators on both sides of the political spectrum who are completely uncritical about the government’s spending plans.

“I’m proud to pay tax.”

“I’m happy with the way the government spends my money.”

“I’m happy to give my money to the government to spend on the poor and the needy.”

And if the government spent my money on the poor and the needy in a way that actually helped them out of poverty and need and didn’t leave them beholden to more of my money, I’d be happy with it too.

However, I’m not really keen on the government spending my money on things like killing people in countries far away or spying on me or funneling large piles of money at their mates or funders. If you look at things like the Common Agricultural Policy, where farmers get land subsidies whether they grow stuff or not, there is no benefit to the money we give to the EU either. And even if you believe in the EU, we are a nett contributor, so we are giving money to the EU for no return to us.

So at a “macro” level, there is an argument against tax.

But even if the government spent my money on things I approved of, there is another hurdle: does the government spend my money well?

Research into the business of government spending is that at best, half of a department’s budget winds up “on the front line”. Quite often it’s as little as 10%.

And apart from that, the pennies of my money spent in the front line is quite often spent in ways I do not approve of. While I might be happy for my tax money to be spent on essential health care, is breast augmentation really essential? So there is also a micro argument against tax.

In essence, the government takes your money and spends it on things you wouldn’t spend it on. Even when it spends money on things you want it to spend it on, it spends it very badly.

Why then, would you be happy or proud to give money to these people?

Amfortas March 31, 2012 at 04:57

Taxes, we are told, make it possible for people to achieve their
‘aspirations’. It opens up ‘opportunities’ for them. Let us have taxes that
reflect the demand for taxes. Let lefties pay, say three times as much as
conservatives. After all, they want higher taxes, so let us make the
opportunity possible for them to achieve their aspirations.

john malpas March 31, 2012 at 01:08

But did they just say “I’m happy with the way the government spends my
money” to wind you all up.
After all if they were truly content they could
just hand over all they own for their government to dish out as it feels
like.

mister_choos
March 30, 2012 at 15:21

Criminonymous ,

I’m sure that the private sector is/can be inefficient. But with them we
have a choice. That (in theory at least) drives them to at least try to be
more efficient. The state has no such incentive.

Andrew Duffin
March 30, 2012 at 15:18

“Why…would you be happy or proud to give money to these people?”

Because you’re a leftist arse and it’s a way of making you feel good about
yourself cf. the selfish greedy mean rich baby-eating tory bastards?

Beady March 30, 2012 at 15:08

Basically, all tax is a wrong. We wouldn’t allow a bloke in the street to
just help themselves out of our wallet, because they need some new trainers.
We’d complain to the police and have them arrested.
We do however allow the
government to do exactly that.
I realise that tax is inevitable, but if we
started from the position that forcibly removing money from someone is wrong
but acceptable in certain closely controlled circumstances then maybe we’d
start to get somewhere.

Pat March 30, 2012 at 11:33

Milton Friedman pointed out ages ago that there are four ways of spending
money
1/Spend your own money on yourself- this generally gets best value at
least cost.
2/ Spend your own money on someone else- the cost is still
controlled, but with the best will in the world the value obtained is less (I
wonder how many wives actually receive the ideal present, even with their
husbands best endeavours)
3/ Spend someone else’s money on yourself- think
of expense account entertainment. Value may be very good, but costs are
exorbitant.
4/ Spend someone else’s money on someone else- expect poor
value and high costs.
All government spending is done the fourth way.

Noise March 30, 2012 at 11:31

I do like and acknowledge this argument, but it does fail when the same
argument is applied to the private sector.

Typical profit on a ‘product’ before overheads is probably 30-70%, which
probably isn’t that different.

I do however support your argument, I think I get annoyed at the level of
accountancy and layered management required. In an ideal world I would pay one
tax, with one set of accountants, instead I pay a myriad of taxes (I can think
of at least 20 taxes I am directly or indirectly exposed too). this makes 20
sets of rules, 20 sets of accountants, 20 sets of punishments for failure to
pay..

In legal terms, as a professional educated male sometimes I feel
overwhelmed with the complexity of just living. Does this fall into
“reasonability”?, some might say the intellectual elite have built a society
that only the intellectual elite can excel at.

cascadian March 30, 2012 at 19:23

Gahhh! As a professional educated male you should know that “Typical
profit on a ‘product’ before overheads is probably 30-70%,” is absolute
nonsense. Profit (in simple terms) is the amount left over after all
manufacturing costs, development costs and overheads are deducted.

Judging by the stock market most companies would be happy to achieve 10%
profit these days, many are achieving far lower percentages, maybe even
negative percentages.

And as others have pointed out if you have a problem with a certain
private sector company -lets say Apple- then move on to Samsung or another
competitor. Try that with Government.

JimS March 30, 2012 at 10:48

In a similar way people have been brainwashed into wanting more
‘legislation’. Don’t the Welsh have enough from Brussels and Westminster
without wanting more from Cardiff, for instance?

In a recent Jeremy Vine BBC Radio 2 programme a representative from the
water industry was repeatedly asked how many people had been prosecuted for
flouting hose pipe bans. The Vine line was clear, there is no point in a law
unless people go to prison. Similarly we have had calls for bans on smoking in
cars; “Well we ban non-wearing of seatbelts and mobile phones, so why not?”.
Legislate, legislate, tax, tax, same mindset.

Weren’t there EU proposals to tax internet traffic just because it was
there? If it moves salute it, if it doesn’t, paint it.

Criminonymous
March 30, 2012 at 10:08

“And if the government spent my money on the poor and the needy in a way
that actually helped them out of poverty and need and didn’t leave them
beholden to more of my money, I’d be happy with it too.

However, I’m not really keen on the government spending my money on things
like killing people in countries far away or spying on me or funneling large
piles of money at their mates or funders. If you look at things like the
Common Agricultural Policy, where farmers get land subsidies whether they grow
stuff or not, there is no benefit to the money we give to the EU either. And
even if you believe in the EU, we are a nett contributor, so we are giving
money to the EU for no return to us.”

I pretty much agree with all this, but it must be remembered that the
private sector is equally inefficient. If you look at BoE statistics regarding
the distribution of currency by the banks, it shows that only about 8-10% of
their lending goes into the productive economy, while the other 90% is wasted
in speculation. Not only is this money used unproductively, but it actually
contributes towards the instability of the global economy. I agree with Hayek
that our tax money is wasted on corruption, war and other nonsense, but I do
not believe that this fact is absolutely inherent to government and taxation.
Rather, I believe we need to use the infrastructure of government to
democratise the economy. This is not nationalisation – in fact, this idea
would be revered by the authoritarian socialists of the past because it
involves the people actually having some control. Nor is this “free markets”
as such – we do not start from a blank slate, we do not have equality of
opportunity or Nozick’s “just transfer” of wealth. Therefore, it is important
to democratise the economy, rather than “free” it, otherwise those who already
have a head start due to current distributions of wealth will be able and
incentivised to prevent a more equitable distribution of wealth.

http://en.wikipedia.org/wiki/Economic_democracy

What do you think about that?

abrupt March 30, 2012 at 11:14

Sounds like Blair describing communism.
How can you achieve an
“equitable distribution of wealth”, without insisting on an “equitable
distribution of spending”?
You spend, I save. You have satisfaction, I
regain my wealth

cascadian March 30, 2012 at 19:07

I think you just sent Thaddeus’ eyeballs into orbit

“I believe we need to use the infrastructure of government to democratise
the economy”……..Thats a very good definition of communism.

Look to yourself to know how best to spend your earnings, and where you
wish to contribute to the welfare of others.