Governments demand increasing transparency from companies, most recently: utilities banks and oil companies. That is fair enough, but perhaps consumers and business should demand similar transparency and reduced complexity from government. If governments will not do it then there is a way for business to increase pressure for less complex and more manageable tax systems.
A relatively quick and easy starting point would be for all receipts and invoices to show the full amount that is going to government. It should include import and other duties, sales tax and any other levies. For example in the UK a £50 bill for petrol would show that the government is getting around £30. That remaining £20 has to cover exploration, extraction, distribution, retail and other taxes.
Government should, could, simplify their tax codes; the complexity creates confusion and allows them to mask how much they are really taking. It is a technique that was long used by service and utility companies but that is changing. Business should provide “encouragement” by making the impact of government on consumers much clearer. The pressure would then mount as people realise just how much public services and government is costing. Governments could not complain, they have been advocating transparency (for others at least) for years.
That could work for sales and transaction value based taxes. The challenge is then to show how much tax is taken from income and overheads. Obviously income tax and national insurance or social security (in reality just another tax) appear on payslips. However, there is a tax on employment in the form of employers’ social security levies and there is corporation tax (most companies DO pay it), business rates or property taxes. Then there are the myriad other levies on banks, oil production or mining, energy, insurance, flights or stamp duty on property and investment purchases. No wonder governments can sneak tax increases in when they are buried in such Byzantine systems. And what’s worse it creates cost for individuals and business in needing specialists to advise and huge bureaucracies for governments to administer such complexity (need for more tax).
Let’s make tax simple so everyone, even Chancellors or Ministers of Finance can actually understand it, it is cheap to administer and thereby eliminates loopholes and opportunities or even need for tax avoidance. It will need pressure so let’s shed light into the deliberate obfuscation of government taxation. Unfortunately even with the UK budget announcement, and other government’s budget setting, a few weeks away a simpler tax system is unlikely to feature. So are there any takers to start a campaign of transparency?