Honesty and Tax Hypothecation
The hypothecation of a tax (also known as the ring fencing or ear marking of a tax) is the dedication of the revenue from a specific tax for a particular expenditure purpose.
– Wikipedia
For those of us old enough to recall the Road Tax and the associated tax disc, it is natural to assume that because we’re paying a road tax, that we’d be getting better roads for our money. In fact, one of the most common grumbles of any motorist is how appalling English roads are considering how heavily we are taxed on our cars, and how little of our Road Tax is spent on roads.
But this is merely an example of the legerdemain of government when it comes to tax.
The Road Tax was originally intended to provide money to keep roads in good shape based on the use thereof. Unfortunately, the government started to find that it wasn’t spending anything like the amount raised on roads, and needed to swipe the “profits” for other things. So it retained the visible trappings of road tax (the tax disc) but changed the Road Tax to a Vehicle Excise Duty, which could then go into the general tax pile.
Hence, motorists continue to feel like they’re paying a tax to keep the roads in good nick, but actually they’re funding wars in Iraq or dole-bludging White Lightning swiggers.
Tax hypothecation is often derided by people who feel that it is an inefficient way of taxing people: it’s very difficult to get the right level of tax for something on a per-area basis. And this is very true.
But at the same time government tells us that they are taxing specific things for specific reasons. Cigarettes and alcohol are taxed because of the massive burden they place on the wonderful NHS. Green taxes are levied because we’re killing the planet. Given that this is how the taxes are sold to us, is it unreasonable for us to expect that the government will actually spend those taxes on those specific problems?
How would Green voters feel if the government was brutally honest and said: “We’re taxing those nasty ‘not green enough’ energy suppliers so that we can bomb Iraq”? Would that make green taxes seem quite so noble?
How do motorists feel about the fact that their “road tax” and 60%-plus petrol duty is actually partly used to subsidise rail fares?
How do you feel that the massive duty on your favourite tipple is used to keep Shaz and her multiple boyfriends in free White Lightning?
Isn’t it time the government came clean to us about tax?
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1
March 30, 2012 at 13:29 -
“Cigarettes and alcohol are taxed because of the massive burden they place on the wonderful NHS.”
Not so.
Tobacco tax raises 12 billion for the exchequer. Less than 2 billion is spent on treating alleged smoking related disease. 10 billion profit. Not a bad deal. In fact, for every surgical procedure a smoker may require, he/she pays for four non-smokers to be treated. A polite “Thank you” would be preferable to vilification. Another fact: smokers chip in enough to design, build, equip, staff and maintain five new hospitals every year.
Much the same with alcohol. 32 billion raised and around 5 billion spent on treatment.
One must not believe everything one reads in the lying mainstream media.
CR.
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3
March 30, 2012 at 14:24 -
It’s what makes the UK so unproductive.
1. A whole load of people being paid to collect the tax
2. A whole load of people being paid dish out benefitsThe benefits then get spent on TVs, cigs, booze and fuel, and the tax is then collected and redistributed per 1 & 2 above, thus supporting pointless jobs and parasites with no benefit to the economy. The politicians see it as a way to attract votes, and that’s about it.
Someone I know has started shopping at Makro recently and she is fuming about the vat charges. She never notices it when she goes to ASDA or Sainsburys, why? because they don’t show the vat charges separately on the till receipt.
It’s time that all retailers started to show the tax charged, especially the gas stations.
It might wake up the sleepwalking brits.-
4
March 30, 2012 at 14:59 -
My favourite parts about the Tax Circus that is the public sector are as follows.
About half the money collected in tax is used to fund to cost of collecting it, salaries, big offices, pensions, Death in Service, generous expenses.
When the public sector pays Tax on their salaries it is simply recycling back the Tax Collected from the Private Sector minus the Cost of Collection to be further processed due to the Cost of Collecting from the public sector.
In the building trade the equivilent would be collecting a bucket of water(Tax) from a well(Economy) to place in a government tank(Inland Revenue), losing half of the water you originally collected due to wastage, spillage and incompetence. Then distributing that water back out to the collecters (Public Sector Costs) who will then lose another half of it returning it too the Government tank(Inland Revenue) again. When there is a lack of water to pay for all the collecters the Government simply borrow water to pay the collectors (Public Sector Borrowing Requirement)
Eventually the amount of water in the well reduces(Recession) and people suffer thirst(Poverty).
The obvious answer according to our politicians is to collect more water from the well at the same time as importing more people to drink the water and sending large volumes of the water abroad to help those who cannot be bothered digging their own wells while our grannies go thirsty, our war veterans go thirsty and our kids have no hope of ever getting water.
Am I alone in questioning the sanity or practicallity of such stupid fucks.
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5
March 30, 2012 at 14:43 -
Interesting numbers, Cpt Ranting. I wonder if the 10 billion profit completely funds the rest of the NHS for the rest of us.
But surely no-one ever believed that road tax was spent on roads, except for a short while after it was introduced (road fund licence anyone)? Or NI contributions on investing for pensions, for that matter, except in the very general sense of “investing in the UK economy”?
Didn’t they use a chunk of lottery money to send civil servants on a training course? Just wait till the government decides to expand the concept of what constitutes a “good cause”
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6
March 30, 2012 at 15:07 -
Mark,
I have no idea what the NHS costs to run. I suspect no-one knows for certain. If you are a politician, it is not in your best interests to tell truth. So they rarely make that mistake.
Both figures (the 12B and the 32B) may be wildly underestimated, and the “treatment” figures may be vastly exaggerated . They may also be disbelieved outright, coming as they do, from govt sources.
If these taxes were hypothecated no-one-absolutely no-one-would have room to argue but because they go into the bottomless pit that is the Treasury, we have no idea what our money is being wasted on.
All we know for sure is that they have a Black Belt 6th Dan in wasting our money.
CR.
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7
March 30, 2012 at 15:22 -
The budget for the Health Department is £199 bn this financial year. How much of that is departmental spend, how much on such things as public health labs, and how much directly to the NHS I don’t know.
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9
March 30, 2012 at 15:26 -
Government spends far too much of other people’s money. Full stop. The fact that it tells porkies (or that various sections of the media make assorted claims to support their particular points of view) should be no real surprise to anybody – they try hard to conceal the fact that they take too much and are utterly abysmal at getting value for money when they spend it.
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10
March 30, 2012 at 15:52 -
I wouldn’t mind paying current levels of fuel duty & road tax if we had a public transport system as efficient and cheap as the Dutch, German etc public transport systems.
Where does all the money go? The government manges to spend a large fortune but the outcomes are awful.
Time to make public all government spending down it each and every transaction.
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11
March 30, 2012 at 15:58 -
We do need lots of taxes to uphold the fine old British Tradition of “legitimately” killing foreign people in far off places in the name of Britain. WE should be able to kill them, but if their own goverments do so, we squawk like hell and scream human rights abuses.
Some very good points made in the previous posts about who pays for what -
12
March 30, 2012 at 16:09 -
Instead of burning out our brains trying learn what govt does with more than half our income it is sometimes worth looking at employee numbers.
The sacred nhs has about 1.5 million employees, out of a national workforce of about 29 million. That’s one worker in twenty excluding contractors, so a near neighbour may well be a ‘health care professional’.
HMRC at 74,000 staff has one for every 390 of the working population.
Royal Mail: 163,000……Simplistic and very rough and ready, yes, but you get the picture.
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13
March 30, 2012 at 17:28 -
“Value Added Tax” is another oxymoron.
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14
March 30, 2012 at 17:37 -
The only tax that is ring fenced is the Telly Tax.
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March 30, 2012 at 19:50 -
“The only tax that is ring fenced is the Telly Tax”
Oh no it isn’t. I maintain that a goodly proportion of the Beeb’s compulsory-or-you-go to-prison tax is not used to “inform, entertain and educate”. It is used as an (ever increasingly thinly) disguised political propaganda and in furthering the Fabian, Bilderberg and Common Purpose Agendas
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16
March 31, 2012 at 09:16 -
Quite apart from the matter of its being extremely regressive (at least till the person paying it reaches what ever age confers exemption), the television tax – so patronizingly called the licence fee – is wrong in two important ways : first, its means of collection is incredibly inefficient (it were better in this respect if the B.B.C. were simply funded from general taxation) ; secondly, its fundamental purpose is not to fund broadcasting but to provide cover for the activities of Ravensbourne.
The politicians like to talk – amazingly often, you might think – about G.C.H.Q. and all its ‘secret’ work ; the really secret stuff however is not G.C.H.Q.’s listening to Russian, Chinese and Persian communications but Ravensbourne’s spying on the British population. The catching of licence-fee dodgers provides cover for one of the most overt means of doing this.
Given the advance of technology – which has made the good old detector van obsolete for both overt and covert purposes – you might be surprised that the whole system has not been abandoned ; no, unfortunately they cannot do that : it would entail their admitting far to much about the real surveillance society.
ΠΞ
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17
March 31, 2012 at 04:46 -
What a revolutionary act it would be to go around the houses of all the people in your street and stick a label on their gate posts. “Net tax provider”, or “Lives off YOUR taxes”. Maybe even ‘Rent-seeking Scum” on a few.
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March 31, 2012 at 09:56 -
“The only tax that is ring fenced is the Telly Tax”
It is also one of the few taxes where it is quite easy to withhold once one does a casual bit of interwebby research.
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March 31, 2012 at 18:58 -
“”””“The only tax that is ring fenced is the Telly Tax”
It is also one of the few taxes where it is quite easy to withhold once one does a casual bit of interwebby research.””””
Please enlarge a little on this interwebby research stuff.
As for me, I don’t pay television tax because I refuse to be indoctrinated by the BBC etc. We disposed of the aerial several years ago, and only watch DVDs and Videos etc. I can’t be bothered with all the latest films either, I just collect old ones from charity shops or boot sales for 10pence each. If they are good, I keep if not they get thrown or returned to the charity shop.
It is bliss. We don’t miss the TV one little bit. You would be amazed at how easy it is to live without TV blaring all the time and numbing the mind.
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