Many policy makers, economists, think tanks and tax professionals agree reforms to our tax system are desperately needed. But they also agree change is very hard to effect.
At a Responsible Tax Lab event I heard Matthew Taylor speak eloquently on why he believes the taxation of employment need to be revisited. Yet despite his report being commissioned by Government, and in line with its thinking, he didn’t hold much hope of change happening any time soon.
For any such changes would bring winners and losers, and the voice of losers tends to be loudest.
Which begs the question why would anyone ever bother to moot significant tax reforms? Especially ones that landed like a lead balloon after the Budget.
Because if you keep pushing an idea, it will prompt debate and people may gradually get used to it.
Matthew Taylor came across as a realist and pragmatist – and he seemed optimistic that change may happen in the longer term – providing the debate is kept alive.
Crucially, discussion on tax reform – whatever the proposal – needs to extend beyond politicians and professionals. And where possible it needs to be done face to face.
At PwC we’ve seen first-hand that given the time, space and information, people will engage on tax and their views can change quite radically. As part of our Paying for Tomorrow programme on the future of UK tax, we’ve brought together cross sections of the public to debate a host of tax issues. Run by BritainThinks, our Citizens Juries hear from ‘expert witnesses’ drawn from diverse fields and with different political leanings. Our Juries typically last two days, so people really immerse themselves in the topic. They give the lie to idea that tax is too complicated for people to understand or they have no desire to do so. People want to be clear how tax is raised and spent, and are more likely to support a system they understand.
We have seen that individuals can put aside self-interest if they understand the big picture and how tax changes will impact different groups of people. For example, one of our Jury’s recommended Inheritance Tax be abolished – even though most of the jurors’ assets were outside the inheritance tax threshold. They just didn’t like the concept, likening it to a form of double tax.
While it might not be realistic to replicate these Juries on a massive scale, there has to be away to have sensible, meaningful discussion on tax with more people. With pressure on public finances only likely going to get greater, the dialogue needs to start soon.