Low Tax and Public Services
Posted on February 6, 2024
I have often wondered why people look at our nation’s economy and fail to see the relationship between public services and taxation. Why can’t it be seen how it plays a vital role in shaping the overall well-being of its citizens? Okay, I can see how the idea of lower taxes might initially sound appealing, at least to a point. However, there is indisputable connection between adequate taxation and the offering of good quality public services.
You don’t need to be a chartered accountant to understand that good public services, such as healthcare, education, and infrastructure, require substantial financial resources. When taxation is kept at a minimum, the available funds fall short, thus stalling a government’s ability to invest in critical sectors. Fair taxation ensures a steady stream of revenue, allowing for the maintenance and improvement of essential services that contribute to the overall development of our society. It’s not hard to understand.
Health & Education & Social Equality
It’s obvious to me that public services are fundamental to nurturing a skilled and healthy workforce. Education and healthcare systems, funded by taxes, are the backbone of a nation’s human capital. Insufficient investment in these areas leads to a less competitive and less resilient workforce. Eventually, lack of investment in health and education stunts the country’s economic growth. So why is Britain obsessed with voting for whoever offers tax cuts despite the damage it does? I get it if public services are in great health and the government pot is overflowing with excess cash, but it’s clearly not.
Fair taxation really is the ultimate tool for promoting social equality. A progressive tax system, where higher-income individuals contribute proportionally more, helps bridge the gap between the affluent and those with fewer resources. This then fosters a sense of inclusivity and shared revalues, contributing to a more cohesive and stable, nicer society with less crime. Paying tax should be something to be proud of but in the UK it is often the opposite. Accountancy firms actively encourage ‘tax efficiency’ offering clients several ways of manipulating profits subject to corporation tax.
Infrastructure & Crisis Management
Infrastructure is the backbone of economic progress. Without it, we are screwed, From transportation networks to communication systems, public services rely on a good robust infrastructure. Low taxation compromises the government’s ability to invest in and maintain these vital systems and we end up with potholes. This then impedes efficient functioning of businesses and the overall development of communities. Again, this is not rocket science.
Unforeseen challenges, such as a global health crisis like Covid, require a swift and well-funded response. Adequate taxation ensures that governments have the financial capacity to address emergencies effectively, safeguarding the well-being of citizens and maintaining societal resilience. Our government failed us during Covid and cutbacks on the storage of PPE played a huge role in that failure. Instead of being aided by public services, the government chose to spend emergency money in the private sector. That ended well.
The link between good public services and taxation is not just about numbers; it’s about investing in the prosperity and well-being of a nation. Striking the right balance is crucial. I accept nobody enjoys paying taxes but understanding their role in building a strong and resilient society is essential. Adequate taxation paves the way for quality public services, contributing to a nation’s progress and the welfare of its people.
There is lashings of irony to be had when you hear people moaning about potholes at the same time as voting for a tax cut. Since 2010, councils have had their budgets cut by 30% on average. If they are not getting central government funding, how are they supposed to mend anything? Councils are now being forced to up their rates, so the public lash out them. They’re barking up the wrong tree.
Why not lash out at the government? They are the ones who have created a system where middle income earners pay tax so the rich don’t have to. A recent study showed that 98 of the FTSE had offshore interests with regards to tax efficiency. They are doing it because they are allowed to and public services are affected. When libraries, swimming pools and bus routes are shut down, it’s because there is no money coming to councils.
If you have a government that supports these people and is funded by them, what chance does a nation have to be cohesive? In the build up to the election when tax promises are made, it’s worth remembering that it will be public services that are cut even further to fund them. It’s a bribe and not even a good one. A better society means equality with taxation and spending, not the championing of ‘wealth creators’ who are above the law applied to individuals and small businesses.
But that none of that matters if you’ve got a mansion, a helicopter and a private doctor.