Another voice: Tax transparency is a good idea, but not a game-changer

George Osborne’s plans for more tax transparency have been widely interpreted as a political masterstroke. People will be horrified to learn the cost of servicing Britain’s national debt, or paying our welfare bill, goes the argument. The move will create downward pressure on public spending, driven by the public itself — a classic example of aligning policy with politics. But what if none of this is true? The logic fits, but the evidence suggests something different altogether.

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Experiments with tax receipts in the United States, where the Third Way Institute has been making the running on this, have show that more transparency tends to reinforce people’s beliefs rather than challenge them. The experiments revealed misconceptions about how tax dollars were being spent — but also that opinions rarely changed when people were confronted with the facts.