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At Large
Tax Reform, Her Majesty’s Style
After this, Obama will want to reconcile with Britain soonest.
The Internal Revenue Service long has offered to figure people’s taxes. Most Americans, greedy cheapskates that they are, prefer to do the job themselves. But let’s hope the IRS isn’t talking to Her Majesty’s Revenue & Customs service across the Pond.
Great Britain employs the “Pay As You Earn” (PAYE) system. It’s roughly equivalent to withholding.
Naturally, the tax collectors said they want to make “the system easier to administer; to improve service levels for individual customers; and to ensure accurate tax deductions.” What this means in practice isn’t entirely clear. After all, tax collectors “serve” citizens in the same way that prison guards “serve” inmates. Presumably Revenue & Customs is most concerned about collecting all of the booty it believes to be due from its citizens.
While the existing system works reasonably well, according to Her Majesty’s finest, “there are some limitations. For example, where people have more than one concurrent job or pension, or have volatile employment patterns, this can mean that people may not pay the correct tax during the year and intervention from HMRC after the end of the tax year may be necessary in some cases to correct this. Some of these limitations have been demonstrated in the levels of overpayments and underpayments over recent years.”
Thus, the tax authority has come up with some proposals to improve the tax system. The first idea is relatively mundane: a “Real Time Information” system to speed the flow of information from employers to government. There is a whiff of Big Brother in the idea, but only a whiff, since “Responsibility for the calculation of the amounts of tax, NIC [National Insurance Contributions] and student loan repayments and their deduction would remain with employers,” stated the tax collectors. The “Real Time Information” system likely would be administratively more efficient, but citizens must always remember that when it comes to tax collection efficiency often conflicts with liberty.
Still, Her Majesty’s tax collectors did not stop there. They offered an even better idea, “one possible longer-term proposal which could build on Real Time Information and deliver significant further benefits for individuals, employers and HMRC.” Revenue & Customs emphasized that there’s nothing unusual about its idea. The measure “would make it better able to deal with the challenges of the modern world of work.” You know, people change jobs, win pay increases or suffer pay cuts, and otherwise vary their circumstances. Life is just so very messy and inefficient. How unfair to the many dispassionate, selfless, and devoted public servants.
What does the British agency suggest? Employers should simply pay the government which, in turn, would give workers whatever the government believes they are due. How very simple! It would be a bit like the Cuban model, whereby Western investors hand workers’ pay (in hard currency) to the government, which then gives the pay (in pesos) to the employees.
Her Majesty’s servants explained: “the majority of employer payrolls are connected to the electronic payment infrastructure. Under Centralized Deductions the employer would send the gross payment through the electronic payment system to a central calculator where the deductions calculated by HMRC would be made automatically. The resulting net payment would then be sent to the individual’s bank account and the deductions would be paid directly to the Government.” Those paid by check or cash would not be affected. Although the government would certainly urge these companies to quickly enter the Modern Age.
In fairness, Her Majesty’s tax collectors recognize that such an idea might make people nervous. The agency emphasized that it wouldn’t grab employees’ bank accounts along with their wages. Stated Revenue & Customs: “At no stage would HMRC or its agents have direct access to any money or information contained in the recipient’s bank account or indeed the bank account itself. The tax calculation would be made between the employer’s payment transmission and the receipt of that instruction by the employers and employees banks. The system would adhere to the high standards of taxpayer confidentiality that characterizes the existing system.”
Whew, that’s a relief!
The agency argued that its “Centralized Deductions” proposal is win-win. Employers would save money. Employees “would no longer need to understand tax codes, which are a means of hiding an individual’s personal circumstances from the employer.” And Revenue & Customs would have to work less and less hard to get the “correct” amount of tax.
It seems not everyone in Britain is enthused with the idea. Among the short-sighted observers apparently determined to deny their government needed revenue was George Bull of Baker Tilly, who told CNBC: “If HMRC has direct access to employees’ bank accounts and makes a mistake, people are going to feel very exposed and vulnerable.” With characteristic British understatement, Richard Baron, head of the business organization Institute of Directors, argued: “This document contains a lot of good ideas. But the idea that HMRC should be trusted with the gross pay of employees is not one of them.”
Not a “good idea” indeed.
President Obama wants to raise taxes on “the rich,” penalize us if we don’t buy health insurance, and impose a massive energy tax. And that’s undoubtedly just the start. With an annual deficit of $1.3 trillion, national debt of $13.5 trillion, and unfunded entitlements liabilities of more than $100 trillion, politicians in Washington are likely to spend the rest of their careers looking for any means possible to wring more revenue out of hapless taxpayers.
At least the president hasn’t suggested that we all send our salaries to the IRS, which would then send back to us however much it believed to be appropriate.
About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).
Letter to the Editor View all comments (35) | Leave a comment
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Booger | 10.19.10 @ 6:21AM
From the Desk of Timothy Geithner and Kathleen Sebelius:
Re: Disbursement of Citizen Credits in Grocery Vending Services:
Dear Citizen,
In keeping with first lady Michelle Obama's welfare of children initiative, the following changes will take place in your dietary practices, effective immediately. Please note that the Supreme Court's Virginia v. DHHS decision authorized this office to require any and all purchases necessary to protect the health, safety and welfare of the common good. Additionally, please note that since this is a proactive requirement for all citizens your place of residence is subject to search from agents of this office at any time to insure compliance with these directives. Likewise, please note that failure to comply with these directives incurs a liability of five years in federal prison and a $10,000.00 fine. Additionally, please remember that failure in the part of adult parents or guardians of minor children to comply with these directives creates a de facto judgment of child abuse, with all attending penalties, including the removal of minor children from the custody of such guardians or parents.
1. You are required to purchase a minimum of five servings per day of fresh fruits and vegetables for each citizen residing within your household or domicile. Receipts proving the purchase of said fruits and vegetables are to be provided upon demand for audit by the Internal Revenue Service agents empowered by this office for that purpose. Proper maintenance of such receipts is the sole obligation and responsibility of the citizen residents of your household or domicile. Please be aware that although this office initially provided written warnings for first offense failures, that policy proved inconvenient for our agents and has since been discontinued.
2. You are required to purchase a minimum of two servings per day of dairy products (preferably low fat or skim) for each citizen residing within your household or domicile. Enforcement and penalty are the same as for the provision(s) above.
3. You are required to purchase a minimum of four servings per day of whole-grain bread or pasta products, as per guidelines above.
4. All citizens are now to report once per week to their local health office and submit urine, hair and blood samples to screen for the ingestion of nicotine. Any failure to do so constitutes a failure to purchase health care services, as noted above. First offense for a positive test is up to three years in prison and a $10,000.00 fine. Please bear in mind our zero-tolerance policy in this (and all other) matters.
5. All citizens are now to report once per month to their local health office to submit to a body mass index screening for obesity. Compliance regulations are the same as for section four, above. Citizens found to be obese will be receive a scarlet "F" (for fatty) tattoo upon their forehead and have their monthly condom ration halved.
Please remember, this is for your own health and well-being. We're from the federal government, and we're here to help.
Sincerely,
DHHS Secretary Kathleen Sebelius and Secretary of the Treasury Timothy Geithner
Robert| 10.19.10 @ 7:48AM
Obama and his minions already feel your earnings are the government's property. It is only a logical extension that such a proposal will be proffered on this side of the pond.
Texas Mom 2012| 10.19.10 @ 8:19AM
That sounds bad for England but we have an equally bad proposal that recently raised its ugly head.
There was bill proposed in committee to seize all 401K and IRA assets owned by the American population and then the Feds would pinky swear that you would get the interest of 5 percent paid out to you when you retire like a 'guaranteed' annuity.
You would no longer be able to pass your savings onto your children. I see pitchforks! The idea sends chills down my spine. We have been saving since the 1980s, we are 48 and the tail end of the baby boomers. So we knew that social security will not be there for those of us who saved but we do not want to be dependent on the govt. The idea that they would seize what we have scarified to preserve for our old age infuriates me. We will pay the fines and taxes and penalties rather than allow our govt to ROB US!!!
Remember in November and pray for our country.
Louis Jenkins| 10.19.10 @ 8:43AM
Obama's government already sees our wages as their own. With this move they would have the money before anyone, taking and confiscating what they deem theirs, and allowing us to have the left overs. This is BS. No more planning your monthly budget, no more saving for a vacation. We're in for a rough time if the Pretender n Chief is allowed to continue down this mad path.
Alan Brooks| 10.19.10 @ 10:08PM
But Obama did the right thing in sending back the bust of Chirchill; why would a black man from Chicago admire Churchill any more than a black man from the South admire Robert E. Lee?
You make the mistake of thinking everyone lionizes the same icons as you do.
David C| 10.20.10 @ 10:27AM
Not sure where this “out of the blue” post of yours came from or is going for that matter.
Are you joking about Churchill? Hope so...
Churchill's position on Islam and the post WW II Middle East is the reason for the bust return, as well as Obama's belief that his father was a victim of Churchill as well (incarceration and torture).
Thanks
David C| 10.19.10 @ 5:00PM
The basic economic argument is simple and easy to illustrate.
The case studies are our own states… some of which are pro-business and some which are anti-business. Texas vs. New York or California for example. Put up a Glen Beck whiteboard and illustrate the differences in state vs. state in terms of GDP, unemployment, and 21st century business moving to or away, etc.
Logically, those who live in NY and CA (and want a NY or CA style government) want to confiscate the income and exert control over the rest of the nation (and for their suffering to be spread to others). So the Obama style plan is preferred.
This is a clear choice, Texas is doing much… much better than CA and NY. America, which future path do you prefer? How can one lose that argument?
Mimi| 10.19.10 @ 12:41PM
Heh Boog: This is just a preview of coming attractions if we don't VOTE these IDIOTS out now! Keep up the letters from the..BIGS. A good laugh warms the heart. It's sad but these SMUCKS won't stop, until we stop them. Hang on all!!
Tim*| 10.19.10 @ 8:50AM
Time To Stop The Ruling Class Taxers from Confiscating Your Money.
The Tea Party Rebellion Escalates.
Rise Up In Rebellion !
Margie| 10.19.10 @ 12:39PM
"An honest man can feel no pleasure in the exercise of power over his fellow citizens."
~Thomas Jefferson
Obama an honest man?
"I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man."
~Thomas Jefferson
I have eternal hostility in my soul!
"Rebellion to tyrants is obedience to God."
~Thomas Jefferson
The confiscatory and eternally increasing taxes on ~We the People~ is tyranny!
Thomas Jefferson
Whenever any form of government becomes destructive of these ends [life, liberty, and the pursuit of happiness] it is the right of the people to alter or abolish it, and to institute new government..."
Thomas Jefferson
Flat Tax system, anyone?
"The spirit of resistance to government is so valuable on certain occasions that I wish it to be always kept alive."
~Thomas Jefferson
I desire not anarchy, but a return to the wisdom of the Founders, and a return to the Constitution given to us, by the Grace of God through them.
Margie| 10.19.10 @ 12:46PM
Eternal correction: T.J. did not say that about confiscatory taxing, I did. :^)
RCV| 10.19.10 @ 1:55PM
"Believing with you that religion is a matter which lies solely between Man & his God, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, & not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between Church & State."
- Thomas Jefferson, 1802, to the Danbury Baptist Assn.
Margie| 10.19.10 @ 2:17PM
I see that the Lefty lawyer takes issue with the quotes of the Founders and tries to plug the non-existent "separation of church & state" whilst hijacking Jefferson's own words.
It's about freedom OF Religion, RCV.
Not freedom FROM Religion.
RCV| 10.19.10 @ 2:21PM
I take no issue with the words of our founders, Margie. The quote from Jefferson is the source for the phrase "wall of separation between church and state", a principle he believed as strongly in as any. Indeed, he refused to issue a Thanksgiving Day proclamation, believing it would breech that wall. Trying to mold Jefferson to fit your theocratic views is futile.
And, by the way, name-calling is a poor substitute for reason.
Margie| 10.19.10 @ 2:35PM
Name calling? So you aren't a Lefty lawyer, heh. You have said as much and your views speak for themselves. And deceitfully assigning "Theocratic views" to me is to then assign them to the Founders then, as I am in full agreement with them!
I would refer you to today's blog on this very subject: O'Donnell Right About 'Separation of Church and State' by John R. Guardiano.
You Leftists try to deceive, but the Truth will always win.
RCV| 10.19.10 @ 2:51PM
As the commentors to Mr. Guardino's attempt to defend O'Donnell's ignorance have noted, she wasn't even aware there was an establishment clause in the First Amendment. Here's her actual comment:
When Coons responded that the First Amendment bars Congress from making laws respecting the establishment of religion, O'Donnell asked: "You're telling me that's in the First Amendment?"
I fully understand people who aren't familiar with case law getting the details wrong, but someone who wants to be a US Senator ought to at least read the text of the First Amendment.
And I agree that the Truth will always win: that's the beauty and purpose of the First Amendment.
Elizabeth Y.| 10.19.10 @ 4:30PM
What an upleasant character Margie seems to be!
And speaking of unpleasantness, if you want to see the true character of AmSpec posters, take a look at the thread from yesterday's Amnesty for Same-Sex Couples. It will make you shiver.
Margie| 10.19.10 @ 4:50PM
I hear that a certain blog called The Huffington Post has much more "pleasant" types there who would agree with you. Perhaps you might like to pay them a little visit.
Edward White| 10.19.10 @ 5:31PM
The obscene language used by a few posters on the Amnesty for Same-Sex Couples should not be tolerated.
I was disgusted and repelled by the rude, school-boy comments that AmSpec allows on this site.
It's time for AmSpec to have a registration process, or to at least have someone oversee the site to remove these filthy posts.
Under the cover of anonymity, posters can say the most repugnant things, using the filthiest words they can imagine.
It's time to censor the obscenities.
Alan Brooks| 10.20.10 @ 1:01AM
Jefferson wasn't exactly anti-slavery, Marge.
Slavery was tyranny, power-exercising; it was the right of the people to abolish the Confederacy to institute new government.
Tim*| 10.19.10 @ 2:21PM
"In matters of religion I have considered that its free exercise is placed by the Constitution independent of the powers of the General Government. I have therefore undertaken on no occasion to prescribe the religious exercises suited to it, but have left them, as the Constitution found them, under the direction and discipline of the church or state authorities acknowledged by the several religious societies. "
Thomas Jefferson's Second Inaugural Address
March 4, 1805
Nunya| 10.19.10 @ 6:30PM
RCV, I thought the year was 1812, but I could be wrong. Regardless, TJ's words have been twisted as though they were actually written in the Constitution itself. Nothing could be further from the truth, yet his words have been used to ban displays of the 10 Commandments on public property, yet the Constitution specifically leaves those decisions to the "..states, or to the people".
While I have great respect for TJ's opinions, they were not instituted into the Constitution, and his statement to the Danbury Baptists has been taken WAY out of context.
RCV| 10.19.10 @ 6:52PM
We've been over this before about the First Amendment and the states, but once again: The Bill of Rights originally had no applicability to the states, until passage of the Fourteenth Amendment which protected all "United States citizens" against encroachment by the states of their "privileges and immunities" as citizens -- this "incorporated" the Bill of Rights and extened the protections afforded against the federal government to state encroachment as well.
As to Jefferson, his letter was written in 1802, in reply to a letter written to him in October 1801 by the Danbury Baptists. The quote accurately reflects Jefferson's views: he was, as I said, a fanatic about the "wall of spearation" and refused to issue a Thanksgiving proclamation on grounds that for the government to thank God officially would transgress that wall. I don't disagree with you that other founders may have had different views, but Jefferson and Madison were both adament on the subject and worked together to insure that the State of Virginia had similar proscriptions against government entanglement of any kind with religion.
Thanks for the thoughtful reply.
Tim*| 10.19.10 @ 7:08PM
Horsecrap Obama LawBoy
Jefferson had no problem with four different Christian sects using his native Albemarle County Court House for Religious Services on alternating Sundays.
Jefferson had no problem with different Christian sects establishing and supporting Divinity Chairs at His State University of Virginia with full access to all facilities.
Jefferson had no problem with the appointment of a Congressional Chaplain.
The tea Party Rebellion Escalates.
Rise Up In Rebellion !
Tim*| 10.19.10 @ 7:27PM
Now, if Jefferson was the fringe " Fanatic " about The First Amendment and Separating Church and State, then the other Founding Fathers would be to the right of " Fanatic " Jefferson .
Was Jefferson The Founding Fathers' Dictator ?
Answer : Hell No, He Wasn't The Founding Fathers' Dictator .
The Tea Party Rebellion Escalates.
Rise Up In Rebellion !
RCV| 10.19.10 @ 7:36PM
Tim: Of course many founders were "to the right of Jefferson". The Founders were an intellectually and politically diverse group of people. Hamilton was a near-Monarchist, Jefferson an unabashed admirer of the French revolution, and Franklin ... well, you know Franklin.
That's why the doctrine of "Original Intent" is so facile. Whose original intent? It's why conservative jurists who are "textualists" reject the very notion.
RCV| 10.20.10 @ 3:39PM
"A professorship of Theology should have no place in our institution [the University of Virginia]." (Thomas Jefferson, letter to Thomas Cooper, October 7, 1814. From Gorton Carruth and Eugene Ehrlich, eds., The Harper Book of American Quotations, New York: Harper & Row, 1988, p. 492.)
Tim*| 10.19.10 @ 1:01PM
" The only difference between a taxman and a taxidermist is that the taxidermist leaves the skin."
-- Mark Twain
" America is a land of taxation that was founded to avoid taxation."
-- Dr. Laurence J. Peter
"The point to remember is that what the government gives it must first take away."
-- John S. Coleman
" There is no such thing as a good tax."
-- Winston Churchill
" The taxpayer: that's someone who works for the federal government, but doesn't have to take a civil service examination."
-- Ronald Reagan
Senor Mick| 10.19.10 @ 1:13PM
Pitchforks? Too modest, sir, too modest! Verse (and my collection of antique firesticks) shall be be my weapon!
From the land of Nelson and Dickens,
Arrives these slim and foul pickins:
No more pounds, no more pence!
You'll pay your bills and your rents
In goats, loaves, ricebowls or chickens!
I've heard rumors about this nationalization of 401k's and IRA's for a while but have yet to confirm them. Any links to actual evidence? Not that I doubt the current regime won't do it, but one likes to see one's enemies as they are.
RCV| 10.19.10 @ 4:37PM
Shades of Richard Nixon, the GOP is up to its old dirty tricks again: " A third-party group headed by a GOP operative is out with a new Nevada ad spot encouraging Latinos in the state not to cast votes in this year's midterm elections."
George S| 10.19.10 @ 7:36PM
Here's a good idea that will save the government the cost and the trouble of figuring out taxes: each citizen gets his gross pay in cash every week and figures what is just and fair and pays that tax. A trillion dollar stimulus? Ummm...no, I ain't paying for that. Dumb idea. Better luck next quarter.
GavInTucson| 10.21.10 @ 4:14AM
Two words... FAIR TAX!!
Simply put, tax spending and not income. Abolish the income tax, and establish a national sales tax (except for food and clothing, and shelter). This will ELIMINATE the IRS, and get hundreds of thousands of worthless bureaucratic government IRS zombies off of the public sector teat (deficit reduction).
The tax rate is the same for everyone... yes, everyone. No more entitlement babies demanding, "give me more stuff" without cutting their own throats (that's called equal protection under the law). No more useless forms to fill out. No longer will an army of lawyers and accountants need to be hired to keep an honest business owner from inadvertently going to jail.
It will eliminate the 60,000+ page tax code we already have that most accountants don't fully understand, and reduce it to a single double-sided piece of paper that everyone understands.
It will radically reduce the power of what we currently call politicians in this country (I prefer to call them vote-buying bottom-feeders on someone else's dime).
The economy will explode since the people that drive job creation in this country now fully understand the rules of the game (certainty = investment = job creation = more people spending = revenue to the Treasury).
That means no more corporate taxes either. Companies pay the same tax as the people... on what they purchase.
And if the politicians want to raise the fair tax, which will hurt everyone, the country will vote them out.
And repealing the Federal Reserve Act wouldn't be a bad idea, either. The Fed has been manufacturing (engineering) boom/bust depression/recession cycles since its creation in 1913, a condition that was nearly unknown to the American people prior to that. When we hurt, they thrive, and laugh all the way to the bank (and they happen to be the bank).
Kick these European central banking criminals out of the United States, and restore our Republic from a nearly 100 year criminal reign.
melogos| 10.29.10 @ 3:01PM
Our tax system is broken. The Fair Tax would produce more revenue than the convoluted system we now have in place. With the number of non federal income taxpayers approaching the critical mass of 50%, never before in our nation's history have we needed to enact a fair taxation system more than now. See blog post at http://www.christianretirement.com "Learn to Say No." America is experiencing problems in many areas. Sometimes, difficult issues must be addressed head on. The Fair Tax would insure that everyone would have the opportunity to step up and pay for the freedoms they so readily and freely enjoy.