Simple taxes are progressive taxes

The TPA's Matthew Sinclair argues that it is lack of take-up that makes the tax system look biased a

I’m glad Alex likes the graph we made yesterday. Hopefully it makes it a little easier to understand how much everyone is paying. I don’t think he is fair on loss relief, though.

While he says it is difficult to argue with the principle, he also sees it as a “wonderful example of a tax system built with one set of rules for the rich, and another set for everyone else.” But loss relief should be available to anyone who has made a loss in their “trade, profession or vocation”, or is entitled to a share of a loss made by a partnership of which they are a member. Not just the rich. I think lots of traders on quite low incomes, nowhere near the top 50 per cent of the income distribution let alone the top 1 per cent, will make a loss one year and a gain the next and deserve relief for that. If someone loses £30,000 one year, then makes £30,000 the next, they need loss relief.

They might be much poorer over time than a writer who makes £10,000 a year for a few years then £250,000 in a single year – the alternative scenario Alex outlines. But they do have the same fundamental problem: a progressive tax system isn’t very fair on people with volatile incomes.

There is actually a relief that caters to Alex’s example too: “Averaging for creators of literary or artistic works”. In that example, it would mean that the writer could average together the year they earned £250,000 with a year they earned £10,000 and pay tax as if they had two years of earning £130,000. That would mean they could avoid the Additional Rate and pay a tax bill that better reflected their earnings over time. So good news if the New Statesman is a bit stingy but Alex has a masterpiece up his sleeve!

The actual difference between how tax reliefs affect the rich and the poor is less that the rules particularly favour the rich, though they do in some cases. It is more that the rich are much better equipped to take advantage of them. Unclaimed tax reliefs and benefits save the Chancellor billions every year and under claiming is almost certainly concentrated among people on lower incomes, who are less likely to have lawyers and accountants to help them. The take-up rate for Working Tax Credit is only 57 per cent, for example, and businesses have failed to claim tax relief on fittings in commercial properties worth billions.

That is one reason why the simplification of taxes and benefits can be more progressive than it appears. Simpler rules help those without the time or professional support to work their way through a thicket of regulations and reliefs. Tax reform is the only way to cut through that thicket and make it easier for everyone to pay no more, and no less, than their fair share.

Is the tax system stacked against the poor? Credit: Getty

Matthew is the director of the TaxPayers' Alliance

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I can’t follow Marie Kondo's advice – even an empty Wotsits packet “sparks joy” in me

I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

I have been brooding lately on the Japanese tidying freak Marie Kondo. (I forgot her name so I typed “Japanese tidying freak” into Google, and it was a great help.) The “Japanese” bit is excusable in this context, and explains a bit, as I gather Japan is more on the case with the whole “being tidy” thing than Britain, but still.

Apart from telling us that we need to take an enormous amount of care, to the point where we perform origami when we fold our underpants, which is pretty much where she lost me, she advises us to throw away anything that does not, when you hold it, “spark joy”. Perhaps I have too much joy in my life. I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

After a while I gave up on this because I was getting a bit too happy with all the memories, so then I thought to myself, about her: “This is someone who isn’t getting laid enough,” and then I decided that was a crude and ungallant thought, and besides, who am I to wag the finger? At least if she invites someone to her bedroom no one is going to run screaming from it, as they would if I invited anyone to my boudoir. (Etym: from the French “bouder”, to sulk. How very apt in my case.) Marie Kondo – should bizarre circumstance ever conspire to bring her to the threshold – would run screaming from the Hovel before she’d even alighted the stairs from the front door.

I contemplate my bedroom. As I write, the cleaning lady is in it. To say that I have to spend half an hour cleaning out empty Wotsits packets, and indeed wotnot, before I let her in there should give you some idea of how shameful it has got. And even then I have to pay her to do so.

A girlfriend who used to be referred to often in these pages, though I think the term should be a rather less flippant one than “girlfriend”, managed to get round my natural messiness problem by inventing a game called “keep or chuck”.

She even made up a theme song for it, to the tune from the old Spiderman TV show. She would show me some object, which was not really rubbish, but usually a book (it may not surprise you to learn that it is the piles of books that cause most of the clutter here), and say, “Keep or chuck?” in the manner of a high-speed game show host. At one point I vacillated and so she then pointed at herself and said, “Keep or chuck?” I got the message.

These days the chances of a woman getting into the bedroom are remote. For one thing, you can’t just walk down the street and whistle for one much as one would hail a cab, although my daughter is often baffled by my ability to attract females, and suspects I have some kind of “mind ray”. Well, if I ever did it’s on the blink now, and not only that – right now, I’m not even particularly bothered that it’s on the blink. Because, for another thing, I would frankly not care to inflict myself upon anyone else at the moment.

It was all a bit of a giggle eight years ago, when I was wheeled out of the family home and left to my own devices. Of course, when I say “a bit of a giggle”, I mean “terrifying and miserable”, but I had rather fewer miles on the clock than I do now, and a man can, I think, get away with a little bit more scampish behaviour, and entertain a few more illusions about the future and his own plausibility as a character, when he is squarely in his mid-forties than when he is approaching, at speed, his middle fifties.

Death has rather a lot to do with it, I suppose. I had not actually seen, or touched, a dead body until I saw, and touched, my own father’s a few weeks ago. That’s what turns an abstract into a concrete reality. You finally put that to one side and gird up your loins – and then bloody David Bowie snuffs it, and you find yourself watching the videos for “Blackstar” and “Lazarus” over and over again, and reach the inescapable conclusion that death is not only incredibly unpleasant, it is also remorseless and very much nearer than you think.

And would you, dear reader, want to be involved with anyone who kept thinking along those lines? I mean, even if he learned how to fold his undercrackers into an upright cylinder, like a napkin at a fancy restaurant, before putting them in his drawer? When he doesn’t even have a drawer?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war