Values Added: why remaking the case for tax is crucial

As we approach the general election in May, tax is on the agenda for both the Conservatives and Labour, evident, for example, in Ed Miliband’s renewed commitment to tackle tax avoidance last week. Yet, inevitably, the narrow nature of our campaign conversation crowds out the bigger questions about why tax matters and whether our system is fit for purpose. Instead of simplistic discussions of whether tax should go ‘up’ or ‘down’, we urgently need a fundamental reassessment of how we tax, and to what end. With the respected Institute for Fiscal Studies repeatedly warning that tax increases are almost unavoidable in the next parliament, the unwillingness of politicians of any party to engage with the tax debate properly is concerning and stores up problems for the future.

Tax is still perceived as a political taboo, but it remains a cornerstone in the relationship between the citizen and the state in a representative democracy. Our perception of fairness about what we ‘pay in’ shapes our attitudes to society, with wide-ranging repercussions on, for example, our willingness to engage with the democratic process or to trust our elected representatives.

Despite the longstanding political belief that talking about tax is a toxic vote loser, current polling suggests overwhelming support for richer people paying their fair share, whether through the introduction of a ‘mansion tax’ or tackling tax avoidance. The unprecedented success of Thomas Piketty’s analysis in Capital in the Twenty-First Century is a symbol of increasing public appetite for more progressive wealth taxation and state intervention globally: in short, there are renewed foundations for a real debate on radical tax reform.

Some 15 years ago, the Fabian Society’s Commission on Tax and Citizenship, chaired by Lord Plant, argued that taxpayers need to feel better ‘connected’ to their taxes and to the public services which they finance. Revisiting this core concept, a new edited collection by the Fabian Society published this week Values Added: Rethinking tax for the 21^st century explores the values and principles of taxation with the aim of encouraging renewed debate in a crucial political year. This collection forms part of the Fabian Society’s new ‘Future of Tax’ project launched with a selection of articles in the Winter 2014 edition of the Fabian Review. Specific options for reform will be explored in a further collection early in the new parliament, to be published alongside original public attitudes research exploring opinion on today’s tax system and future proposals for reform.

The collection presents different views on the future of tax, exploring everything from public attitudes to political rhetoric, but the common thread is simple: we need to start debating tax and tax reform again. Furthermore, proposals for reform need to have popular appeal and resonance without seeming piecemeal or hinging on a single issue. It is clear that these debates must be detoxified, both in terms of political messaging and technical reform, including changing how tax is conceptualised.

To keep the public in the conversation, politicians need to ask the big questions about tax and public spending, without becoming overly technical and inaccessible in the process, while avoiding some of the simplification that comes with political rhetoric. With this collection, and future publications, we hope to re-establish the case for tax reform and start a debate in which the public can realistically take part.

Daisy-Rose Srblin is a Research Fellow at the Fabian Society, and editor of Values Added: Remaking the case for tax

For more information on the Fabian Society’s ‘Future of Tax’ project, and its forthcoming publications, visit: http://www.fabians.org.uk/the-future-of-tax/