Let’s begin by eating our greens.
Shortly after the launch of the Fair Tax Mark earlier this year, Mike Truman, Editor of Taxation, published an article [£] assessing the Mark’s award criteria. The pass mark was 65% with up to 20% awarded by reference to the relationship between an applicant’s average tax rate (“ATR”) and the then headline rate of corporation tax. The ATR was calculated by reference to the tax rate paid over the previous four years. In his article, Mike Truman expressed a preference for a weighted average (such that the rate paid in years where profits were higher counted more heavily than the rate paid in years where profits were lower) rather than the unweighted ATR adopted by the Mark. Mike Truman also reported the view of the Technical Director of the Fair Tax Mark, Richard Murphy, that in 95% of cases it would make no difference. It was not suggested that there was any bias inherent in the adoption of an unweighted rather than a weighted ATR.
If you were toying with your broccoli, now to the beef. The criticism was merely this: a technically less purist measure, making (it was claimed) no difference in 95% of cases, had been used in relation to but 20% of the weighting for the Mark.
Yet from such an unpromising beachhead, and without other serious technical criticism, was launched attack after attack on the technical soundness of the Mark. And, in a manner equally unattractive, its defenders accused the attackers of base motive. That, in other words, they were actuated purely by a desire to preserve their turf; to enrich themselves, and their wealthy clients, and to preserve their monopoly over public debate on this most critical public policy arena.
That was, on any view, a profoundly one-dimensional anecdote. You will expect me, in due course, to seek to justify its telling. But first a diversion.
There are those – let me call them the Moralists – who seek to bring about broad social change and who recognise the tax system as an important tool to achieve that change. Their champions, in the UK at least, are such figures as Alex Andreou, Polly Toynbee, the Chair of the Public Accounts Committee Margaret Hodge, and the grandfather of them all, the aforementioned Richard Murphy.
The Moralists have, of course, political detractors who disagree either with the Moralists’ objectives or with their assessment of how to use tax policy to achieve them. These political detractors are, in a sense, Moralists too. UKIP, until very recently, advocated a flat rate of tax as a means to “make all taxpayers better off.” However, this rather energetic logic has never featured heavily on their policy platform and so they are, disappointingly, less visible members of the Moralist class.
The Moralists have a further group of detractors. They are tax academics, practitioners, and even the odd member of the Bar. They occupy a smaller stage, those merry few. They are guardians of the craft of taxation and invisible to a public with but the barest interest in such matters.The thrillingly uninhibited Christie Malry – a witty pseudonym referencing the eponymous subject of BS Johnson’s novel – who tweets as @fcablog is perhaps as good an exemplar as any. I shall call them the Technocrats.
Such justification as I can offer – I didn’t say I would, only that I would try – of the anecdote set out above is as synecdoche. It aptly illustrates the unproductive nature of debate between the Moralists and the Technocrats. Neither recognises the role played by the other. Too often the Moralists boldly go where no well informed advocate for social change would. Too often the Technocrats look at questions of social reform through the wrong end of the telescope.
But each needs the other. Tax is a legitimate tool to achieve social change and the Technocrat must recognise that lest he be shorn of moral purpose. The Moralist, too, must recognise that, as I have put it (in an otherwise nugatory article) elsewhere, by moral fury alone she will not get the job done.
This is my plea to give peace a chance.
Thanks to @alexcobham who got me started on this.