Direct taxation – a fair and honest solution

Taxation has always been a shady, confusing and unpopular business. However, taxes are a necessary evil. We’re used to governments promising to improve services across our country whilst reducing taxes. Since this isn’t possible, the usual scenario is that stealth taxes are employed, in an attempt to redress the balance. Another common practice is the diversion of tax revenues to wherever there’s a current shortage. There’s nothing to stop a chancellor from using money raised through national insurance contributions to fund activities which are unconnected with healthcare or related services. A lot of the money raised through taxation appears to end up in a sort of national slush fund, which forms part of a ‘robbing Peter to pay Paul’ budgeting process. If a family attempted to run its budget in this manner, it would soon run into trouble. Why should our government be any different?

Surely, a fairer and more accountable system would be for a government to issue a budget statement listing all the national income and expenditure for the previous year and the true projected figures for the coming year. This would result in a total bill, to be met by the nation. Taxation can be broken down fairly and logically by area, with funds being raised at the point where they’re required.

e.g.
The cost of developing and maintaining the national motorway network can come from road fund licence (tax discs) and vehicle insurance taxes. Local road maintenance could also be subsidised from the ‘national pot’, with a regional allocation being based on the size of that region’s road infrastructure. The important point here, is that money raised through road fund licences and vehicle insurance taxes may only be spent on roads and directly related areas.

Likewise, money raised through national insurance contributions would only be allowed to be spent on national health, state pensions and directly related areas.

This model could be applied to every national financial commitment identified in the budget statement, with some central costs, such as defence, being funded through traditional income tax.

The national coffers belong to us, not the government. Our politicians are public servants, entrusted with the task of managing our national funding  and spending wisely. Every citizen is entitled to a clear and honest breakdown of where and how our money is being raised and spent.