Let’s Talk About Tax, Baby: Part 5

“In the 20th century, although country houses continued to be built and lavishly remodelled, and although King Edward VII and his descendants continued to rework Buckingham Palace and other royal residences, many landed families struggled to maintain their houses and estates. Taxes mounted, depression in agriculture ran almost continuously from 1875 to the outbreak of World War II and rental income from land declined. As a result, art collections were broken up and rare library collections sold off to pay for repairs and meet demands for taxes and death duties. Eventually, in the interwar years, some people began to focus on ways to preserve the more historic houses and their collections.”

From “The Complete Illustrated Guide To The Castles, Palaces, & Stately Houses Of Britain & Ireland” by Charles Phillips, Chapter Twelve (p229)

The previous paragraph mentions the National Trust, and the Country House Scheme of 1937, “which enabled owners to leave their property to the Trust in lieu of death duties.”

The book phrases it nice and neutrally, don’t you think?

So these people who owned land used to get a reasonable income from renting their land, and/or profits from farming the land. Both parts of the economy slumped, and taxation on property and inheritance increased (possibly to make up for the lost tax revenue from the rental and the farming, does anyone think rental prices then didn’t increase to help try meet the costs?).

Pumping from a pool that isn’t being refilled.

People had to sell off their possessions to pay tax. Imagine you had to do that, this month sell off the TV, next month the DVDs, then the computer, then the CDs, then the books. How sustainable is such a system?

We’re taught about basic human needs, including water, food, and shelter. (I’ve seen wifi added to that list in recent times.) We might perhaps see that taxing the poor could threaten those things. We might concede that taxing the landlord more would increase the rent for his tenants. Here we see “tax the rich!” turn into making the rich poor, and taxing them out of their homes.

Is that not just as wrong?

That curious concept, the broke “rich” person, recurs in P.G. Wodehouse stories.

The National Trust didn’t come to the rescue here. They were the beneficiaries of a swindle. I think it’s too nuanced to be able to say something like “they were guilty of receiving stolen goods”, though I think it’s still a pretty good illustration of the phrase “tax is theft”.

The properties had been protected pretty well in private hands, over hundreds of years. It was only because of the giant governmental leech that they were under threat. So government swings in to solve the problem that they themselves caused.

Setting the rich and poor against each other is harmful to society, and breeds resentment.

It’s not a hundred years ago that this was happening, And so many are committed to the same course. I can’t say I don’t understand; at one point I would have entirely agreed. I can no longer sympathise with the sentiment.

Let’s Talk About Tax, Baby: Part 4

Too many parts of the tax series to link to the m all at the start of a post, so I’ll link Let’s Talk About Tax, Baby: Part 1, and the start of the politics series, in case you’re interested in catching up.

I was wrong. I was wrong. See, I can admit it.

I said yesterday, in Part 3, that I would wrap up the series today. Yesterday was a nice, short, self-contained concept. And when I had written it, I had already written out what was going to be today’s post. This post had three sets of musings, which weren’t very long in themselves, but the post I was going to post today would have been a bit long.

Fortunately, it’s going to be pretty easy to split them up. “Let’s Talk About Tax, Baby” will run finishing up on Monday, with Part 6. Unless something extra springs to mind.

So, today’s notion:

* “Render Unto Caesar” when not using sestertii.

If we accept the premise that Caesar’s coinage belonged to Caesar because it had Caesar’s image, and by extension that English currency belongs to the Bank of England because its name is stamped on the paper currency, and American currency belongs to the Federal Reserve for much the same reason, then that raises some interesting questions regarding things like barter and Bitcoin.

The tax system one is subject to, might require one to quantify the value of a non-monetary exchange (“payment in goods or services”) in currency, so that they can tax you on it.

One can argue that if you use their money, that they are a party in the transaction, and might have to say. Whose face is on the currency? Render unto Caesar the things that are Caesar’s.

But is this not an overstep? Caesar has no part of this transaction, Caesar has no entitlement here.

Where these transactions relate to tax, it seems to be purely on the honor system. I suspect many such transactions have no paper trail.

Here’s an article related to Bitcoin and taxes. Looks hard to keep track of. A bit of a mess, really.

I did a post on property and ownership last week, and the entire tax series is related. Something that has been implicit so far, and will be starker tomorrow, is the basic question, “how much of what you own is someone else entitled to?”

You may believe that you are obliged to use or give what you have, to take care of other people. The quote from the property post about “the footwear mouldering in your closet belongs to those without shoes”, it is for you to give, not for them to demand. “The needs of the many outweigh the needs of the few, or the one” is good to invoke when you’re the few or the one. When you’re Spock sacrificing yourself to save the ship and its crew. It is bad when the many invoke it to steamroll over the few. Like the classic analogy of democracy, “two wolves and a sheep voting for what to have for dinner”.

The Star Trek III inversion, “the needs of the one outweigh the needs of the many” is good when Kirk and his crew risk everything to go save Spock. Any number of dictators, even elected officials, could highlight when it’s bad (what’s springing to mind is the new documentary “The Killing$ Of Tony Blair“).

How much of what is yours, is fair game for the government to take? Some think everything.

More on this tomorrow.

Let’s Talk About Tax, Baby: Part 3

See Let’s Talk About Tax, Baby: Part 1 and Let’s Talk About Tax, Baby: Part 2.

A rule of thumb that I picked up somewhere along the way: tax the things you want to see less of, subsidise the things you want to see more of.

That paradigm is not one I particularly subscribe to any more, but it’s memorable, and can serve as a springboard for examining the subject.

Do you want people smoking? No? Tax cigarettes. Do you want people to drink alcohol? No? Tax alcohol.

If you don’t like people imposing their morals on other people, hopefully that last sentence got you seething. Chances are, this line got you instead, but no worries.

Do we want people in jobs and earning money? Yes? Then why do we have income tax?
Do we want people to own property?
Do we want people out spending money in the economy?
Do you want people getting enough light in their homes?
Do you want people to take away rather than eat in?

You can go through yesterday’s post and examine any taxes I may have left out, using the above framework. You can examine any taxes you happen to notice, and see whether they live up to the framework.

If it fails that test, then it shouldn’t be a tax. If it affects someone else, but doesn’t affect you (say, you don’t smoke and you’re talking about tax on cigarettes, or tax on the rich and you’re not rich), then in fairness you should refrain from supporting it.

What is left, I still would be hesitant about, but that would be a good start.

I think we’ll wrap up the tax posts with Part 4, tomorrow.

Let’s Talk About Tax, Baby: Part 2

See Let’s Talk About Tax, Baby: Part 1, if you haven’t.

There is a contention that tax is theft. If anyone else took your money in such a manner, if would be called theft, but our glorious overlords have decreed that it is legal for them to do it, so that makes it all ok.

Sarcasm aside, I was alluding to this in the charity analogy last week. If you don’t pay your taxes, some government agents (probably armed) will take you away and lock you up against your will.

But let’s set that aside for now, and even set aside “are you getting value for money?” (spoilers: no), and take a look at tax.

In history class, we might learn of crazy things like “window tax”. People were taxed on the basis of how many windows their house had (and possibly how big those windows were. The assumption being that rich people would be living in bigger houses with more windows (class warfare is nothing new). Naturally, as people don’t like to pay tax, this led to a lot of people living in gloomy houses.

So silly, we think, but people back then didn’t pay the sheer amount of tax that we do today.

So, you work, you pay income tax.

You drive, you pay vehicle tax, road tax, fuel tax (which corresponds to how much you use the vehicle), possibly mileage tax on top of that in some places (because fuel tax Just Isn’t Enough).

You go to the store (probably in your car, invoking the list of taxes above) and buy stuff (using money from your income that you’ve already been taxed on). The bulk of your shopping might be food, and there might not be sales tax on food. But included in the food cost are wages for workers at the store, and so there’s their income tax etc. Also included is transport costs for getting the food to the store from the distribution center, so all the driving-related taxes you have to pay for yourself (plus the truckers’ taxes). Property tax for the store and the distribution center. Same again of all of the above for manufacturing places that assemble many of our foods, and for farmers who grow the ingredients.

And then there are other things you buy that do have extra tax. Physical stores in the UK were quickly outclassed by online stores when it came to DVDs, several online stores set up in Jersey and Guernsey, which took advantage of a tax loophole. At one point, retail stores were selling the Extended Edition of The Two Towers for retail price: somewhere around 45-50 quid. An online store, at the time, was selling it for 15.99 (does that count as “tax evasion”?). A shopowner friend of mine lamented that that was less than he was paying _his_ supplier for them. No wonder the High Street/Main Street is in trouble.

The UK has VAT, Value Added Tax. One place produces the raw materials, and sends them on to the manufacturer for (cost + labour + profit + tax). The manufacturer makes something from the raw materials and sells them for (cost + labour + profit + tax). Depending on how many stages it takes to get to the finished product, a big chunk of change can be added to what you have to pay, just in VAT. And ultimately, it’s you the consumer who pays it.

Perhaps you’re familiar with the phrase, “it’s turtles all the way down“. Well, it’s taxes all the way down. You can go past the farmer to his suppliers, or tax added at several stages with VAT… it’s like fractals.

Fractals observed in nature are a finite pattern, so perhaps the branch looks like a smaller version of the tree entire, or the rock like the mountain. The pattern is similar, but not exact. On a computer, fractals are usually perfectly-repeated patterns, potentially going on forever (presumably system resources can become an issue). I remember a type-in program in an issue of Commodore Format, that took rather a long time to run.

Seems taxes are more like the computer version of fractals than the natural one.

Property tax. I touched on it in the “store” section. Say you have managed to buy your own house. You own the land and the building, there’s nothing you owe on it. Good job. And then some level of government comes in and charges you some kind of property tax.

Then tragedy strikes, and you’re at a point where you’re unable to pay your bills. You concentrate on things you Really Need (water, food), and cut as many things as you can. So you cut property taxes. Your dire situation goes on long enough, and they can come and take your property out from under you.

Seems like this isn’t a new thing. I was researching a castle in England, that various kings had given and taken away from various people (“An Englishman’s home is his castle: constantly under threat by the State”).

I recall a list of human needs, food, water, shelter. I have a problem with threats against those, whether it’s a government commandeering part of your property so it can widen the road, kick you out because you can’t afford the tax, or demolishing your planet to make way for a new hyperspace bypass.

You know what I mean.

Of course, there’s many more taxes. Death taxes. Import duties. Carbon tax. TV license, in the UK. I’m sure you hear of “stealth taxes”, I’ve heard of inflation referred to as a hidden tax. You’ll find big lists pretty easily if you search the internet for something like “list of taxes”. It’s kind of a scary thought just how far and wide the tentacles reach.

I find it hard to believe that anyone who would consider adding new taxes, or raising them, has any idea of the extent of taxation already in place. It’s like, you’re already the batteries in the Matrix, and there are people who want the batteries drained faster? It’s hard to ascribe good intentions to such people (other than invoking the adage about a certain road that’s paved with good intentions). Even if they have good motives, how much do those motives really count for?

Tune in tomorrow for Part 3, bringing us another angle.

Let’s Talk About Tax, Baby: Part 1

In Friday’s post, I talked about property. Today’s post is related.

When you work, the income that you receive (“wages”), is earned.

The government skimming some off the top (“taxes”), is not earned. Sometimes you will find officials talking about your money (taxpayers’ money that isn’t yet taken in taxes) as their money – they just haven’t gotten it, yet.

Over the years, I have heard discussions of a fair tax system.

One is a flat percentage system. The argument against this is that, say 10% from a poor person hits them much harder than 10% from a rich person. The rich must pay more! (overlooking that the rich actually would pay more in this system).

A saying that I’m sure I shall bring up again in future posts, is “if you pay, you get a say”. Theoretically, not taxing the poor robs them of a voice. This may be outweighed by corporations, who, while they take every loophole they can get to reduce the tax, on the other side of things pay for lobbyists and various other expenses, to influence legislation.

A couple years ago, talk of a “Robin Hood Tax” was all the rage. Perhaps you’ll remember the slogan associated with Robin Hood (and Jayne, the Hero of Canton): “robs from the rich, and gives to the poor”.

In other words, there’s all these social programs I want to fund, I have no intention of funding them myself, but I’ll happily take money from someone else to pay for them.

Is it unreasonable to point out that envy and theft are not virtues?

People like to invoke Jesus on tax. “Render unto Caesar the things that are Caesar’s” (the coins having Caesar’s likeness engraved on them). “And render unto God the things that are God’s” (each member of humanity – including Caesar – being created in the image of God. Subversive).

So we might render unto Her Majesty our Bank of England notes (do electronic Pounds in one’s bank account count as bearing her image?). And in the US, we can render our 1s to George Washington, our 5s to Abraham Lincoln, our 10s to Alexander Hamilton, our 20s to Andrew Jackson…

Did Jesus pay His “fair share” of tax? We don’t hear a lot on the subject, but one time He paid His and Peter’s Temple Tax with a coin that conveniently showed up in a fish. It seems that is not His (or Peter’s) “fair share” – it’s not siphoning off the fruits of their productivity, like modern income tax is. It’s undeclared extra income that’s being used.

Looking on the divine side rather than the human, if “the earth is the Lord’s, and all in it”, I think it safe to say Jesus didn’t give the adequate proportion of His cut of that to either the Temple, or to the occupying Romans.

This illustration has to be taken with a pinch of salt for a couple of reasons. First, the taxation system of the Roman Empire in 30-ish AD Palestine, is very unlikely to be comparable to the giant spiderwebs of either the UK or US tax codes. Secondly, giving to the Temple was seen as giving to God, and so Jesus gets a bit of a pass on that.

Overall, the point I’m trying to get across today, just at the basic income tax level, is that THERE IS NO FAIR SHARE. There is not a fair tax.

Tune in tomorrow for Part 2 for more.

Property And Ownership

After yesterday’s illustration, I was set to do a post directly referencing it. But then, the more I wrote this post, the clearer it was that what I was actually going to write about required more in the way of groundwork. So, in a manner a bit more solid than yesterday’s story, let’s talk around this concept a little bit.

There have been various philosophies on the subject of property and ownership.

“Property is theft!” one slogan goes. One could justify that notion with things like the following quote from St Basil:
“Now, someone who takes a man who is clothed and renders him naked would be termed a robber; but when someone fails to clothe the naked, while he is able to do this, is such a man deserving of any other appellation? The bread which you hold back belongs to the hungry; the coat, which you guard in your locked storage-chests, belongs to the naked; the footwear mouldering in your closet belongs to those without shoes. The silver that you keep hidden in a safe place belongs to the one in need.”
Quote taken from https://bekkos.wordpress.com/2009/10/08/st-basil-on-stealing-from-the-poor/

The problem is, St Basil was trying to exhort the rich portion of his congregation to do good. Most people who espouse “property is theft” use it as a justification for stealing someone’s property. Though I suppose they don’t view it as stealing, because what they are taking from their victims doesn’t in their eyes, really belong to the victim.

Let us say, then, that owning stuff isn’t necessarily bad.

There was a controversy in sixteenth-century Russia, between monastic groups with different philosophies about property.

The Non-possessors believed that, as monks took a vow of poverty, they should not own property. The Possessors believed that the ownership of property enabled them to use that property to help others.

Obviously, those two sentences leave a bunch of stuff out, and lack any sort of nuance. There’s a segment on Orthodox Wiki that gives more detail, if you want it.

Theoretically, should it be easier to remove someone from property that they own, or from property that they’re renting or squatting in? Ought you to have more leeway to do what you want in and to your home, if you own it, or if you rent it or squat in it?

Reality can be a lot less cut-and-dried than that, but let us affirm the general principle.

If you rent your home, the owner might object to your growing a lot of food plants, and if you do them anyway, could demand you remove them, at your own cost. In your own home,you can grow a bunch of food, perhaps not everything that you need but potentially more than you need of some things, putting you in a position to sell or to give the excess away.

When you rent, your landlord needs to get a certain amount of money (profit) to make it worth his while. On top of that, a smart landlord will budget in maintenance costs. On top of that, there are various related taxes: income tax, property tax, probably more. Perhaps not the property tax, he might make you directly responsible for that. Either way, you’re paying for everything. The landlord may be responsible for contracting for maintenance and so on, but you pay for everything. Otherwise, there would be no profit. A landlord that fails to properly budget for maintenance might charge you extra for work that needs doing. Even if you have a generally good landlord, there’s still the possibility of occasional unpleasant interactions.

Property, then, is a position of strength. But a strength that protects you, and not, in and of itself, a strength that’s attacking other people.

The Charity Illustration

I need to set the stage for some reflections, so in this post I’m going to tell a little story. Today, I’ll submit the story without comment, you can draw your own conclusions if you like. Then, in the next few posts, I can elaborate on details, draw connections, that sort of thing.

So here we go.

Picture a charity. Perhaps it’s one you particularly support, if not, then perhaps you might agree that it’s a worthy cause, even if you don’t personally contribute.

All well and good so far.

Now picture that you’re forced to contribute. As in, there is the very real likelihood of your being captured and imprisoned, potentially even killed, if you refuse to contribute. Well, it’s a good cause and you can afford a small contribution.

Picture your friend, who may or may not share the same values as you, but they particularly dislike this charity. You might be ok with them being forced at gunpoint to contribute to this charity, in a similar manner to yourself, because you think you know better than they do that it’s a good cause. (Don’t be that person.)

After a while, you’ve gotten used to the gunpoint thing, and are used to the status quo. But then clouds threaten your sunny little sky. Some of the money that is advertised as going to the charity, is being skimmed off and used for other things. The charity is outclassed in efficiency and effectiveness by competitors. The charity is involved in some dubious conduct, that you really don’t want to support. A bunch of other charities have been added to the list of things you’re forced to contribute to.

But now, here’s the catch. You’re stuck contributing to the charity, even though it’s fallen in your estimation. You could contribute to the competitor, but not withdraw your support of the initial one. And everyone else you know is so adjusted to the status quo, if you try to question the functioning of the charity, voice any concerns, say there are better alternatives, you’re shouted down, called names, BUT WHAT ABOUT THE CHILDREN, and so on.

Let’s Talk Politics

It seems to be political season, which is always kind of depressing.

I have been trying to collect thoughts on Brexit, and hoping for a calmed-down environment in which to post it.

The American political circus is in full swing as well, and the ante really seems to have been upped in terms of a lack of candidates to vote for, and the abundance of the quality in the candidates that make people want to vote against them.

I have been kind of hesitant to discuss politics here, because most of my political views disagree with those of many of my friends. And I can understand where they are, I used to share many of the same opinions and unquestioned assumptions.

Many years, and several experiences, have aided my paradigm shifts. I can try and condense some of that down, but a blog post on its own is unlikely to change anyone’s mind.

If it’s unlikely to change anyone’s mind, what’s the point of writing? Perhaps the release will be nice. Perhaps people might understand, even if they don’t agree. Perhaps it’ll plant seeds that’ll bear fruit later. Perhaps, if I want a break in all the nonsense I see on my Facebook feed, I need to provide the alternative content. Be the change that you want to see, and all that.

So, let’s give this a go, a series on politics.