Rory Sutherland Rory Sutherland

The Wiki Man: Tips from Kant on taxes and phone bills

issue 17 March 2012

On tax policy I find I am now a Liberal Democrat. This is a bit of an identity crisis for me. A bit like coming out. Or waking up as a giant insect. But I just really like Gloria Gaynor — sorry, I meant not taxing earnings under £10,000 a year. And the musical theatre — sorry, mansion tax. It just feels instinctively right.

It’s this fairness thing that works for me. The same for the tycoon tax. I like the principle. After all, it is not the only function of a tax system to increase revenue — you must also preserve the consensus that the system treats everyone equally.

Sweetheart deals with multinational corporations or loopholes for billionaires violate this principle. They may be financially expedient for the Exchequer, but this comes at a hidden cost — loss of respect for the system. When a bank threatens to move its HQ unless it receives tax concessions, you need to ask, ‘What if everyone tried to do this?’ When every tax bill is reduced to individual haggling, you end up with the Greek tax system.

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