20150622 A few thousand demonstrators hit the news; many millions of workers don't.

#politicalrealitycheck

Yesterday was Sunday and, like millions of people, I spent the day at my desk, generating wealth for myself, my family and, because I pay taxes, society. No one asked me, or the millions like me for my story.

And yet this morning, the newspapers and broadcast media are focussing on the few thousands - if we are generous, the few tens of thousands - who demonstrated against "austerity" in various parts of the world.

The world needs a political reality check. Let's do a hashtag: #politicsrealitycheck.

 

 

My story is this: I was working my balls off, as I do almost every day, to generate wealth that the protestors think I'm not entitled to. And while I'm doing it, they are holding their street parties, saying they should be entitled to come and take from me an ever greater proportion of the fruits of my labour.

I don't mind paying reasonable taxes for reasonable purposes. I do object to paying higher taxes for what amounts to discretionary spending by governments who want to build monuments to themselves. I object to the amount of money governments spend on re-branding departments and divisions - and on the slogans they seem to think essential. I object to pointless political statements being paid for by the public purse: a London Borough has spent money on the design, purchase and installation of signs declaring itself a nuclear free zone. And all over London there are road signs that are so counter-intuitive that I have no idea what they are trying to tell me to do and, because I'd rather focus on driving than trying to interpret the meanderings of a politician's mind, I just ignore.

I think it's my duty to pay taxes for universal healthcare, free at the point of delivery, for illnesses, disease, injury and the ravages of old age. I do not accept that it is my duty to be responsible for the costs of fertility treatment. On the contrary - I think we should ensure that sterility, especially for men, is far more readily accessible. Unless a woman's breasts are so ginormous that they interfere with her ability to function, then there is no justification for the healthcare budget to be spent on breast cosmetic surgery. "I'm depressed because my husband says my tits are too small," is not a good enough reason to spend the money I spent Sunday earning.

Many of the demonstrators are employed in the public sector. The only reason they are paid is because I pay taxes. They claim I should pay more tax so that more money is spent on public sector pay. For sure, there are those in the public sector who are greatly underpaid - the armed forces, the police, nurses, for example. But there are many that are overpaid or completely unnecessary - including political advisers and other hangers on. Far too much is spent on social workers who all too frequently agitate a left-wing agenda.

Socialists have only one message: that those who work hard and are successful should hand over an ever-increasing share of their wealth to the state. ironically, what most socialists don't recognise is that, in every communist and socialist regime there has ever been, the money does not trickle down to the people. Instead, the elite they blindly followed spend it on themselves, their friends and statues celebrating what a great job they claim to have done.

The state should spend money on essential services - education, healthcare, security, emergency services, armed forces, roads, public transport, water, the justice system and other basic amenities. Beyond that, there should be a basic safety net but it should be set at a level that encourages those who are able to work to work. The state should also support grass roots sports and encourage discipline and excellence.

It should not be the role of the state to become further involved in people's lives.

This is why all the talk of "austerity" is nonsense. Governments that are seeking to cut public spending are not - for the most part - being austere. Mostly, they are reversing decades of profligacy funded by ever higher taxes and ever higher borrowings and decades of economic mismanagement.

Unfortunately, those governments often pick soft targets. Instead of withdrawing support for what amount to discretionary projects, they remove the funding from essential services, knowing that those who work in such services are less likely to strike or, even, to organise themselves into effective counter-forces.

The recipe for fixing it is simple: first, an efficient tax system that is easier and cheaper to police. A flat tax with no allowances is the ideal system. Above a tax-free pay of a sufficient amount (in the UK, this should be set at about GBP10,000 per annum), a basic rate tax of 15% on the next GBP20,000 and a rate of 25% on all income (salary and bonuses) above that amount should produce easily sufficient to meet the obligations of a prudent government. There should be a national insurance scheme modelled on those in Singapore and Malaysia: these are a personal account. These should be 7.5% of all salaried income plus an employer's contribution of 12.5% of salary. Company contributions should stop above GBP50,000 but employees should be able to continue to make voluntary contributions at the same rate above that figure with break points every GBP25,000. i.e. they could make voluntary contributions on their earnings up to 75,, 100k, etc. In this way, pensioners will have built a personal pot out of which they can support their old age.

The public sector should be immediately switched to this system and away from the current special arrangements they enjoy.

Corporation tax should follow the same pattern as personal income tax: a small company's tax rate of zero on the first GBP10,000, 15% on the next 20,000 and 25% on all income above that amount.

A core part of this strategy would be to remove all allowances - both personal and corporate. The most obvious result of this would be that foreign companies that load expenses in the UK and then repatriate money under the guise of royalties, etc. would be taxed on their gross revenues, not their profits after repatriation.

A further advantage is that such a system makes the provision of non-salaried benefits disproportionately expensive for companies. Therefore the provision of e.g. company cars and parking spaces for those who do not need constant access to a car will become far less attractive.

"Non-Doms" (i.e. people who maintain a presence in a country but are not domiciled in it) must be taxed, on the same basis as employees, on the money they bring into countries.

The self-employed should be taxed on the same system - and a Pay As You Earn scheme set up under which they pay tax and national insurance on their drawings as they take them.

Note that this creates a system of taxation on INCOME not on PROFITS so the lower tax rate compensates for the loss of allowances.

It would also remove the opportunity for fraudulent or manipulative accounting practices e.g. bed and breakfasting assets at the end of a financial year to fictitiously reduce profits.

The requirement for audit should be abolished. Audit serves little or no effective purpose but it costs companies a large amount. With no allowances to apply, audit becomes even less useful. Because profit becomes irrelevant, and income is the only measure by which taxation is calculated, accounting becomes a much less complex task. Similarly, tax management becomes entirely unnecessary: any understatement of income should be regarded not as tax evasion but as a fraud. That opens up the opportunity to bring prosecutions more easily - and to use asset recovery through anti-money laundering laws more straightforward. Income statements for tax purposes should be sworn statements made by the Directors who must, therefore, have individual responsibility for their truth.

On the spending side of the government's balance sheet, governments must make drastic cuts in their vanity projects. They must properly fund domestic and international security, essential healthcare, the justice system (including proper legal aid - but not without limit and in some cases, excluding certain types of case and persons from the legal aid system. Benefits must be reviewed so that they go to the genuinely needy.

Immigration must be tackled so that those who contribute are valued and those that do not are rejected. Countries must adopt a hard line on illegal economic migration - and they must also adopt the basic principles that anyone applying for asylum must do so in the first place they land after leaving behind the threat. Asylum must not be permanent - the causes of asylum are generally temporary. When the risk has gone, those who fled must be required to return home. They must not be allowed to claim that the fact they have created a family unit in the destination country gives them a right to remain. However, genuine cases of international marriage, outside the asylum system, must be recognised.

Migrants must be required to meet a minimum period before they are entitled to any supported services including education, healthcare, housing or other benefits. The period should be at least one year. Migrants who arrive without money or pre-approved employment should be rejected.

Benefits must be taxed at the same rates as income.

There must be provision for social housing but it should not be regarded as a house for life. There should be positive encouragement for young people to continue to live with their families and not to regard social housing as a right. Social housing and benefits should not provide a living standard that equals or exceeds that of those who go to work and who earn money to improve their wealth and standards of living.

Complex and costly systems for the management of benefits must be replaced with systems that encourage the unemployed to take up work, even if it is odd jobs. The system as it has developed in recent decades positively discourages the unemployed from taking up short term or part time employment.

Schools should be expanded to provide regional childcare / crèches at hours that suit the local employment environment. They should be provided at cost for families where neither parent is available because of a work assignment. They should not be babysitting services. They should be available for all children more than three years old and should include kindergarten classes including reading, writing and simple arithmetic.

Universities should be restored as centres of academic excellence. Vocational qualifications should be taught as professional qualifications, not as academic study and awards made accordingly. Admission should be on merit, only. A system of bursaries should be developed for able students who require financial assistance. Neither state nor university funds should be available for management degrees. Universities should fund, or obtain sponsorship for, research degrees (i.e. post masters) in science, engineering technology and physical medicine.

Schools must be required to produce pupils who are literate and numerate. Those who, for reasons of disability or lack of mental acuity are unable to keep up should be responsibly and properly helped to maximise their potential. Schools must recognise that different pupils have different learning needs and tailor teaching approaches to those needs but not at the expense of the majority who present a broadly similar ability and approach.

Roads must be properly maintained. Public transport must be available so as to reduce the dependence on private cars and taxis.

Water, electricity and gas are essential services. In principle, they should be provided at cost. However, it is necessary to recognise that the infrastructure for these services is expensive to maintain and to improve. If these services are to remain in the private sector, there must be an agreed plan for maintenance and improvement and to allow a reasonable margin for profit. However, the cost to end users must be approved by government : consumers must not be ambushed.

The BBC must be allowed to develop sponsorship for its programmes so that the licence fee can be phased out. It must be allowed to run advertisements between (but not during) programmes. However, news and current affairs should not be sponsored. The BBC should not be handicapped by competition from new technologies - it should be able to create its own versions of e.g. Spotify and video streaming services, which would be sponsored, advertiser supported or subscription based.

MPs allowances must be reviewed. Parliament should buy or build a central London hotel for the use of MPs so as to remove the second homes allowance.

All of these plans will release large numbers of government employees and e.g. accountants into the labour market. We must provide proper retraining facilities for the middle aged as well as for the young. And there must be effective employment services: companies must be encouraged to put jobs into job centres before putting them out to private employment agencies so that there is a national register of opportunities readily accessible by those seeking employment. In this way, barriers to re-entering the workforce are reduced.

Governments need to invest in manufacturing, starting with apprenticeships. But this need not be in large scale, headline projects. All over the country, small businesses are facing closure as the last of a line bows out. There are people that want to become artisans, craftsmen and there are willing masters. Bakers, butchers, tailors, cobblers, blacksmiths. There are dozens of trades and crafts that could be made viable with proper apprenticeships. The UK is a nation of small shopkeepers - driven out of business by massive competitors. If our high-streets were once more full of greengrocers, fishmongers and cheese shops, instead of pound shops, charity shops and estate agents, society benefits. Governments need to step in to give effect to rent controls on the high street for small businesses. Local governments need to reduce local property taxes so that small retail businesses can return and both recruit and train specialists in relevant skills.

And the great thing? All of this will reduce government spending and increase the tax take whilst improving the quality of life for many of the vulnerable in our society. It will actively pull the ground from under left-wing agitators.

It's an agenda that benefits everyone, and removes the excuses that socialists use to create divisions within society. Those that march while I'm working will have no merit in their arguments. Perhaps they will, also, begin to contribute to the common wealth of society instead of making demands of those that do.

It's not rocket science. But it's ballsy. Does any government have the courage to do it?

 


 

© 2015 Jefferson Galt
All rights reserved

 


 

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