Tuesday 13 January 2009

State Workers Don't Pay Income Tax

This is an argument I have been meaning to pursue for sometime. Would someone please tell me how any state employee pays any income tax?
Consider Mrs Lola - a teacher. She turns up at the state indoctrination centre each day and at the end of the month she gets the old pay envelope giving her details of the pittance rationed to her by Gordon's army. It shows 'deductions'; pension, NI, Income tax.
Now forgive me but how is she paying that tax? My earnings (self employment) are taxed and after being coerced I hand over loads of dosh to the government who then pass this on to Mrs. Lola.
Now also think about 'government'. What is it? Well, it's a convenient fiction to help us organise our lives. It has nothing other than what we give it. Society consists solely of people and things.
So, Mrs Lola's income tax is simply a rebate to me of tax I have been coerced to pay to pay her.
This brings on more arguments. Why have income tax at all? Clearly it is operating as an employment tax, not an earnings tax. And if you must persist in having it should not state employees be paid the net sum? What's the point of the bureaucratic paper chase paying out to and collecting money from your employees. (Even more laughable if you work for the HMRC). And PAYE is a curse. Pay people the gross amount and then ask them for the tax. It is their money. This action would, of course, bring on the demise of income tax as the costs of collection would be prohibitive. PAYE is one of the key techniques the state uses to steal from us.
In my utopia there would be no income tax at all. All it does is distort employment and disincentivise wealth creation.
We could keep NI - but treat it properly as true 'National Insurance', but make it it clear that the state is the insurer of last resort, not a universal benefits provider.

1 comment:

Mark Wadsworth said...

Agreed on the net pay point.

More important is that the value of pension promises is roughly equal to the nominal deductions for income tax, NIC and pension contributions.

Don't agree on NIC, it is The Second Worst Tax after VAT.