When we set out to write today’s blog ,the list of things that taxes pay for was so very long that we could have filled a paragraph. Armed forces, justice, law and order, roads, clean air, schools…and on and on……. But then we thought-“it’s just a worthy catechism, most of which is so evidently true they know it already!” Or, we could have wasted another paragraph hammering home the differences between high tax countries where the middle class live better than the rich in low tax ones. If only because there’s so much law and order about , you don’t have to worry if your neighbour is going to shank you. But we kind of did that in the opening to this series, so that was a non runner too.
Instead we thought we’d tell the story of an entrepreneur, let’s call him Dave, who lived in a country where the taxes were so low the Government couldn’t afford to collect them anyway. Which allowed Dave use the money he had not paid to buy a gleaming new limousine, which he took out at once on the road to show the neighbours how Rich and Successful and Powerful and Important he had become. At first things went well, as Dave glided past the rather hungry looking locals. Just fast enough so they didn’t have time to stop him, and just slowly enough so the rugged broken surface of the road didn’t give him an impossibly bumpy ride and that all those lumps and potholes didn’t wreck the suspension on his new car. It worked, for a bit, until he hit a particularly sharp spine of steel which the rubbish men had not collected because they didn’t exist, which punctured one of the expensive tyres on Dave’s brand new car and brought his jaunt to a sudden halt.
And that was where his troubles really began. As he climbed out he observed some people watching him. With great interest. Would they help him? Had he ever helped them? They certainly looked eager, judging by the way they looked at his car and his gold Rolex watch. Perhaps if he paid them to help with some of the huge wadge of twenties he always carried:? But that might tempt them to take all of the notes, and offer no help at all. Judging by their clothes, and the buildings around there, they looked as if they might need money quite quickly. As they began to close the distance on poor stranded Dave, he sensed he would find out the answer to those questions quite soon.
That, in short, is a summary of what taxes buy you. We never knew how his story ended and if they left him with enough money to pay for the private ambulance he needed. Nor indeed if he needed one anyway after they had finished. But we would observe that what is true of individuals is true of nations. You can be as rich as you like, but if you have no physical security, it’s not worth much at all. In the next instalment we will learn what happened to China when they forgot that lesson, and to other nations who had to learn it the hard way.
Stiglitz, J The Price of Inequality WW Norton and Company 2012
Piketty T Capital and Ideology Harvard University Press 2020
#economics #tax #government #china #inequality #health #defence
Learning, Science and Society 