Monday, 27 October 2014

The tax spiral

"Unto Caesar pay the taxes," one man famously said when questioned about paying taxes "for it is his face upon the coins." Shortly afterwards he got nailed to a tree, which just goes to show.
It is indeed right and proper that we pay taxes. But do we have to have quite so many of them. And whilst I don't mind paying a fair tax, I object top paying tax on a tax for something I paid tax on already.
The newest tax to be proposed is the Mansion Tax, which will be aimed at those who own houses worth more than £2 million. These are obviously rich people, who should be taxed for being successful. I expect most footballers will be happy to pay this tax, and they can certainly afford it. But what about those unfortunate people who have lived in houses which through the governments ineptitude, assisted by greedy property developers and town planners have risen into that band whilst they stay on the same income? Other people made their house worth more, not them.
My own modest plot falls nowhere near the £2 million threshold, but he's the rub. In the North of England it could be any house worth more than £400,000, and mine might soon come quite close. it's nudging towards £300,000 already.
So far as I see it I have earned money by working, and I have paid income tax on that money. I bought a house with what was left and had to pay Stamp Duty tax for the privilege. Then I had to pay council tax to live in it. And now I might have to pay mansion tax as well to keep living in it. There is of course a plan by the Labour Party to ease that burden, so that you don't actually pay anything towards the Mansion Tax until you are dead. Brilliant - now they've even found a way to tax me after I'm dead. Up until this they relied on my beneficiaries paying inheritance tax on what I left behind. But of course they'll want that too, although they will deduct the value of the Mansion Tax from the estate value before inheritance tax is calculated. No doubt they will want VAT on the tax as well.
Of course you can avoid the tax entirely by being rich and then renting a house. Or you could just be poor and never pay any taxes at all.
Tax on cars is equally strange. Again you earn money and pay income tax, and with the bit you have left you are allowed to buy a car, on which you pay purchase tax, and VAT. Then you must pay vehicle excise duty, which is a tax on ownership of the car, and if you intend to drive it you will need fuel, on which you pay fuel duty and some more VAT. And you must insure it, which is tax in disguise, and pay some more VAT on the insurance. If you choose instead to simply park it, then you must pay a parking charge, yet another tax in disguise, probably with VAT as well, and if you forget to pay or overstay you get a fine (tax?) with VAT on it. And if you are unfortunate enough to live or work in the capital, there's yet another tax to pay for the congestion that has been caused by turning half the road into "special users lanes" for those on buses and riding cycles who don't pay tax. And don't be tempted to use those bus lanes either, or you'll be taxed/fined for that too. Even if you go green and environmental and buy a G-Whiz electric car you'll still be paying VAT on the electricity.
It's all enough to drive you to drink - but there's tax on that too.
Income tax was of course originally charged to finance a war with the French. We should have stopped paying it years ago, we just got used to it.
I found some comfort then when they announced on the news that Britain was being charged an extra £1.7 billion by the EU for being so successful in managing our economy. Cameron was furious, and said he will not pay it. Good for him .But then it dawned on me - they'll only find a way of making me pay it.

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