Taxation and Representation

George Osborne’s obsession …… written by Paul Beasley, Co- Founder and Director of biz4Biz and Managing Director of Richmond House Group.

I have written before about the dangers of George Osborne’s obsession with lifting the lower paid out of income tax. A recent analysis by the Institute of Fiscal Studies said that the proportion of working age adults not paying income tax has risen from 34.3% to 43.8%.

Over the same period, the richest 1% contributed 27.5% of total income tax, up from 24.4%. So what, some might say.

As business people we all know the dangers of being overly dependent upon a small group of clients; we want the widest possible customer base. Otherwise, those customers become overly demanding and very attractive to competitors. Any business that relied upon just over half of one percent of its customers for 25% of its income would be high risk and rightly viewed as very poorly run. We now have just over 300,000 income tax payers, that will inevitably have global interests and be geographically mobile, contributing a quarter of our income tax revenue. Best you don’t upset them George.

But what about the 23 million people who now pay no income tax? Their interest in prudent, well run government is virtually nil as they won’t have to pick up the tab if things go wrong. The political parties appear not to have grasped the significance of this. Gordon Brown was accused of trying to create a client state dependent upon benefits and/or public service employment in order to secure a Labour government in perpetuity. If Jeremy Corbyn plays the envy card and promises the earth with the 300,000 wealthiest picking up the tab, then George Osborne may be credited with succeeding where Gordon Brown failed. That is of course, until those 300,000 vote with their feet.

No taxation without representation was a crucial slogan during the American Revolution. Today, no representation without taxation should be our mantra. Everyone has a stake in society and therefore should pay something, no matter how small the contribution. We are in danger of creating a new elite, a new target for the envy brigade with a more sinister slogan, “it’s all right for you; you pay tax”.

This policy is a danger to the very fabric of our society and should be reversed forthwith.


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