Why We Should Legalise Tax Evasion

"Up to £42bn - enough to eradicate UK child poverty ten times over - could be going begging every year through tax evasion and (legal) avoidance, of which just £4bn is recovered by tax inspectors. There is also £12bn lost to VAT fiddles every year. " This, reported by Private Eye, based on figures supplied by HMRC in 2005, sums up just how desperate the situation has become when it comes to paying taxes in the UK. At the same time as this is going on, we read about pensioners being driven into poverty by ever increasing rates of council tax and cleaners paying more in income tax than their multi-millionaire employers. As if this wasn't bad enough, last year the government added to the woes of low income earners across the country, abolishing the 10p tax rate (or rather doubling it) to finance a juicy tax cut for the rest of us. Yet, public spending is increasing, the government is being called on to save reckless banks from themselves -using taxpayers' money of course- as the credit crunch unfolds, and as of the end of 2007, according to the Office of National Statistics, general government debt stands at £618.8 billion, equivalent to 43.8 per cent of GDP.

The numbers alone show what a problem tax evasion and avoidance is for the economy. The greater underlying problem is the glorification of these practices by those who see and portray tax as a cost or a burden imposed upon us by government. So why is tax important? For a start, the public services we continue to clamber for whilst rejecting any proposed tax hikes, as well as our emergency services and armed forces depend on taxation. Increased revenue through taxation allows the government to retain more control over our economy, constrain public debts and prevent dependence on foreign investment. Taxation is also crucial to the equitable re-distribution of wealth; the silver bullet for many of the social problems that plague our nation ranging from child poverty to illiteracy. The Tax Justice Network likens the redistribution of wealth through taxation to shareholders' dividends, arguing that "companies do not make profit merely by using investors' capital. They also use the societies in which they operate, whether that is the physical infrastructure provided by the state, the people the state has educated, or the legal infrastructure that allows companies to protect their property rights. Finally, and most importantly in my view, taxes are our stake in the state, securing our right to representative governmentand free speech.

So what do we do? A good template is the American system where citizens living abroad are obliged to pay US taxes on all their earnings no matter where in the world they are. If they have a problem with this, then they are offered a simple choice: pay your taxes or renounce your citizenship and do what you like with your money. Only problem with this is that it does nothing to prevent domestic tax evasion or avoidance, so here's my idea: legalise tax evasion. Send all current British taxpayers a form where they can smply tick a box to opt out of paying any taxes on their earnings at all levels of government. In doing so, they agree to give up the right to free health care, and to a free education for their children. They forfeit their national insurance as well as their citizenship. They lose the protection of the law and access to emergency services and most significantly, they give up the right to vote. All these things depend on taxpayers' money to function and they are all instrumental to allowing us to lead the lives we do and enjoy the freedoms bestowed upon us by the gradual evolution of the sacred social contract. It's time we call the libertarians' bluff and give them exactly what they want and then see how they feel about taxation.