Tax

A sanctimonious liberal like any other respectable 16-year-old, I made a seminal lurch to the right the first time I opened a pay slip. I was manning the register weekends for the Ice Capades Chalet in Atlanta and made about $40 a week. Or so I imagined. Then where the hell was it? The significantly lighter payment was my rude introduction to taxation at source. Indignation at being fleeced at a minimal income persisted into my adulthood. I lived on a wing and a prayer for decades, and having to pitch anything whatsoever into the communal pot was consternating. I fancied that I asked for nothing from government; in trade, they should ask for nothing from me. I wasn’t yet a grown-up.

Plastered around Westminster this Easter were adverts for the Tower of London. ‘The perfect place for troublemakers – pre-book now,’ the poster read. ‘Members go free.’ So too – near enough – do those on Universal Credit (UC). Easter-holiday treats can be expensive for hard-working families. For those on benefits they’re a breeze. A trip to the Tower of London for a family of four costs £111. But if one of the parents is on UC (or a long list of other benefits), a £107 saving is applied and the whole family can get in for just £4. Visit the Tower’s café for fish and chips and UC bags you a half-price meal (£16.95 for the rest of us).

No matter how many jurisdictions discover the hard way that wealth taxes backfire, in California an initiative is collecting signatures to put a ‘one-time’ (ha!) 5 per cent tax on the net worth of the state’s roughly 200 billionaires on November’s ballot. Hey, those guys are rich. They won’t even notice. But the funny thing about people and money is that even folks with lots like to keep it. The 2026 Billionaire Tax Act is slyly retroactive, a variety of pre-crime legislation – applying to anyone resident in California on 1 January this year, looping a bungee cord around the ankles of would-be absconders. Thus billionaires such as Peter Thiel scrambled to establish a presence in a lower tax state before midnight on New Year’s Eve.

I once stood in a queue behind a Scotsman checking out of a hotel in Germany. After he had finished scrutinising his bill in agonising detail, he demanded that it be reprinted, this time removing the €1 discretionary charge which had been added in support of the local homeless. More recently some friends of my daughter’s met a Yorkshire-born Spectator writer at a local fête. They mentioned the connection, expecting some mild pleasantries. Not so. ‘’Appen that reminds me: he still owes me for a taxi.’ When I heard this, I was bemused. Then I remembered I had indeed shared a taxi with the Yorkshireman in question, requesting a minor diversion to drop me off at Cannon Street. This, granted, would have added two quid to the overall fare. Point taken.

‘The Somebody Else’s Problem field can be run for years on a single torch battery. This is because it relies on people’s natural disposition not to see anything they don’t want to, weren’t expecting or can’t explain.’ The SEP, as I hope many of you remember, is a cloak of invisibility featured in Douglas Adams’s Life, the Universe and Everything. It perhaps arises from a universal aspect of socially driven behaviour – one which encompasses the Bystander Effect, the Overton Window and the Too-Difficult Box. Strangely, Donald Rumsfeld misses out one of the four (un)known (un)knowns: he does not mention ‘unknown knowns’ – things that we know but aren’t aware of knowing, or pretend not to know.

The standard explanation for why charges for plastic bags reduced waste is economic. People were reluctant to pay 10p for a bag and so brought their own instead. This is partly true. But it would still be highly effective if the charge for a bag were merely 1p. That’s because charging any amount, however trifling, was sufficient to change the implicit assumptions about normal retail behaviour. Previously, if you went into Boots and bought, say, a toothbrush and a tube of Anusol, the default was for the cashier to put them in a new bag – it would have seemed rude not to do so. Suddenly, however, the imposition of a charge meant that shopkeepers had to ask whether you wanted a bag or not.

The Chancellor of the Exchequer found time this week to edit her own page on the social media site LinkedIn. She had, it appeared, fallen into error by saying that she had worked as an economist for the Bank of Scotland. Her role had in fact been humbler. No one should be criticised for seeking to correct a mistake. There is no fault in acknowledging that your claims to economic authority were exaggerated, and no shame in embracing humility. Which is why Rachel Reeves should apologise again – without further delay – to Britain’s farmers. For the grotesque, unjust and vindictive tax assault she has launched on the nation’s food producers.

Britain’s farmers are in a bind. Despite sitting on land worth millions, they are unable to release that wealth without selling – and many struggle to make money from what they produce. According to Defra, almost one in five farms make a loss, while a quarter made less than £25,000 last year. Yet there are parts of the Labour movement that see farmers as money-grubbing, tweed-clad elites benefiting from special tax breaks and hefty subsidies. James Buckle, a farmer from Suffolk, understands those frustrations: ‘If our farm is worth £10 million, and we’ve got these new inheritance tax rules, we’ve got to pay something like £1.6 million to pass it on. And £10 million is a ridiculous value for an asset that one person owns.