A recent event hosted by Common Vision’s Responsible Tax Lab asked whose responsibility is it to bridge the gap between public expectations and understanding of the tax system. But, despite the event’s high level of engagement from civil servants, tax professionals and legal experts, I couldn’t help but feel the conversation was hijacked by pessimism.
As someone who is not a professional tax commentator myself, I found myself feeling somewhat like a Brexiteer: “Down with the experts!” These three falsehoods (IMHO) were why:
1. Brexit means we have to give up on innovation in statehood for four years. Many of the speakers cited Brexit as a “distraction” to root and branch changes to the tax system. But in my opinion, there are a myriad of ways we could use Brexit as a platform for more experimental government, tax devolution being just one part of that. Why not let Cornwall implement a sugar tax, as they wish to do in order to improve public health outcomes – then use the findings to justify its implementation across the country? Why not allow Manchester, Liverpool, Sheffield, etc. to operate a hotel tax if they get a democratic mandate to do so, and let them to use it set up an investment fund for the social economy? Why can’t dying northern coastal towns offer fiscal incentives to small local businesses to help recover their fishery industries and revive their local economic legacy? The incentives for industrial growth are all encumbered by business rates retention – of course, there’s no simple answer but a richer fiscal pallet at the local level could create more balanced economic growth and restore public interest.
2. We can’t devolve fiscal power because council employees are incompetent. This infuriates me as a rhetorical block to decentralisation/devolution because: a) it’s rarely true – more so now than ever after relentless public funding cuts; b) the idea that Whitehall is the only place those with a public service ethos and sharp mind can work reinforces brain drain from the whole country to London; c) it is a self-fulfilling prophecy – the more we demean public service, the more screwed our state will be. There is a crisis in western democracy which can only be fixed by the generation entering and progressing the workforce – mainly the millennials – thinking that working for local government is sexy, and finding ways to break it open and reinvent it. We need to recognise this by changing public narratives around what it is to be a public servant, and changing what it is to be one (as is the case in my new workplace).
3. If our tax system were designed by accountants everything would be ok. There was some technical discussion about the failings of tax policy makers to design a ‘good’ system. Yet, tax is a profoundly normative debate, not a technical one. As a former ‘policy expert’ myself, this event provided a timely reminder and reinforcement of my core belief – the value of naivety in dialogues about public policy making, and how critical this is to unlocking path dependency. Having attended a number of hackathons with people who know little to nothing about an issue and, over the course of a weekend, come up with incredible ideas as a result of talking things through, unpacking fact and morality as they go, for me, this is where it’s at – we need to be willing to ask more of the public, not less – something echoed in the RSA’s recent work. We, the ‘experts’, need to make it easier for people to engage in conversations about fiscal matters – the public is our greatest untapped resource.
Tax is the social glue which binds us all together. In my opinion these are just a few ways to encourage that, through a more optimistic, deliberative, and localised public debate.