Maria Exall writes:
In his article on the 7th April, David Osland took John McTernan to task for advocating tax avoidance as a ‘basic British freedom’ and for making reference to the political theorist Robert Nozick and his argument for freedom from taxation in (, 1974).
The ideological libertarianism of theorists such as Nozick is rejected by those on that wide spectrum of political thought we know as social democracy, whether left or right leaning.
However the discourse and principles of such an approach are much more commonplace and pervasive in wider society, an ‘everyday libertarianism’.
This everyday libertarianism overshadows our political debate on tax and needs to be addressed by Labour politicians and progressive campaigners if we are to win support for a more redistributive tax system and for a Government with enough resources to support those in need and to rebuild our economy after the financial crash of 2008 and Tory ‘austerity’.
It is a hard thing to do but we have to critique the everyday libertarian assumptions that taxation is a drag on creativity, innovation and enterprise.
This is really just a populist representation of the neo liberal view of taxation.
To challenge these assumptions we have to counter the underlying moral justification for this view which is that we as individuals are entitled to our money (earned or unearned).
This view exists amongst many working people who do not have access to anything like the levels of income or inherited wealth of David Cameron or Boris Johnson, or indeed those listed in the Panama papers.
It is a view that justifies a ‘minimal State’ and fuels a sceptical attitude to the Government’s right to collect tax, thereby leaving the super-rich and unscrupulous corporations untroubled.
We need to be clear that the libertarian approach to taxation promoted by Nozick and others is, in the end, ethically incoherent.
It is based on the assumption that pre-tax market outcomes are just, that we have an unqualified moral entitlement to what we earn in the market before government ‘interferes’.
In the real world of advanced capitalist production however Government laws on regulation, competition and other commercial practices are necessary for a market system and have a direct bearing on the rate of profit.
There is no such thing as a just or justifiable conception of a fair pre-tax income in such a system.
The everyday libertarian approach to matters of taxation is based on the myth that my money is mine in some innate or natural sense.
In their book ( 2002) the philosophers Liam Murphy and Thomas Nagel articulated a moral and political case for a social justice model of taxation.
This case directly challenges libertarian conceptions of private property rights presumed by Nozick both in theory and in practice.
Murphy and Nagel maintain that in order to establish the appropriate design and implementation of a taxation system (and the associated benefits and welfare systems), we have to consider the socio-economic context of taxation policy and challenge the assumption that aspects of the economic system are ‘natural’.
Rather than a solely rights based approach they argue that the ethical justification for a taxation system should instead be based on more general principles, such as what actually constitutes entitlement to property and pre-tax income in a complex and interconnected society.
A taxation system should take into account the equity of the distribution of the social product between the private control of individuals and Government.
But to consider tax justice in such a way we have to be clear about the correct role and scope of the State, and be prepared to defend this.
The central issues of taxation are not about how the State should appropriate and distribute what its citizens already own, but about how the State decides what is private and what is public.
So a taxation system cannot be founded in any fundamental way on the concept of individual rights claimed against the State, as in libertarian political theories, because the State is the very framework within which the individual entitlement to property or income is to be determined.
It follows then that the scope of Government cannot be limited by individual rights, though the role of Government maybe.
The political issues of the nature and range of public services, and therefore the level of taxation needed to pay for these, become questions to be asked after it is accepted that the State is entitled to determine the framework of ownership rights.
Murphy and Nagel accept that individual liberty and personal autonomy have value in any objective standard of human priorities, but maintain that Government is a necessary ethical framework for both personal life and civil society.
As Murphy and Nagel explain:
If political debate were not over how much of what is mine the Government should take in taxes, but over how the laws, including the tax system, should determine what is to count as mine, it would not end disagreements over the merits of redistribution and public provision, but it would change their form.
The question would become what values we want to uphold and reflect in our collectively enacted system of property rights – how much weight should be given to the alleviation of poverty and the provision of equal chances; how much to ensuring that people reap the rewards and penalties for their efforts or lack thereof; how much to leaving people free of interference in their voluntary interactions.
(Nagel and Murphy, , p 177.)
This approach still allows for a broad range of views on the justification of taxation policy, but fundamentally re-orientates the ethical issues to be considered.
At present the power of Government in the UK (national and local) to act effectively to promote a balanced and sustainable economy and provide support for those most vulnerable in our society is threatened by the most extreme cuts in public spending for a century, announced in George Osborne’s budget.
Whilst some inroads have been made on his budget plans we are still on course to have public spending slashed to only 35% of GDP by 2020.
We can expect greater inequality and continuing attacks on working class incomes and living standards.
Without a decisive and successful fight back against these inhuman and cruel cuts in collective provision of health, education and social services there will be almost inevitably be a regression in our common consciousness of what Government is for, and what financial support we are entitled to expect from our fellow citizens.
Everyday libertarianism about taxation aids the shift in public consciousness at the centre of the Tory project, that is an individualistic, everyone for themselves, sink or swim ethos which divides working class people against each other.
This is evidenced in the demonization of benefit claimants, the increase in hate crime against people with disabilities, and of course immigration, racism, immigration, racism.
This division allows the Conservative Party to deliver for their backers, the owners of capital.
Osborne and Cameron, and indeed any future Tory leadership team must be challenged on their tax policies by a Labour Party sure of its moral principles.
They need to be exposed for their extreme and illogical ideological view of the individual’s relationship to the State by all rational people.
If this Conservative Government gets off the hook on the ethical matters at the heart of taxation policy it will allow them to put into practical effect Thatcher’s vision that ‘there is no such thing as society’.
We cannot afford to let that happen.