I’m no economist so I’m keeping this excursion simple.
Is it really better to lift people out of paying tax? It sounds like a desirable policy goal on the surface: of course you want to keep as much of your money as possible, but it makes no sense in the general and especially current context. Aside from the wider philosophical arguments about the responsibility and size of an ideal government and, leaving out that conveniently seldom-mentioned elephant – the ability to print a sovereign currency as necessary – isn’t the excuse for limited Government spending usually blamed on the revenue-capacity of the Treasury? That same Treasury that is so starved of income that it’s keen to also ‘lift’ the biggest and the richest out of tax?
So, lack of revenue being the narrative, how does it help the national economy if a growing number of people pay no tax because they can only find part-time, short-term, zero-hour contracts and the like? Part-time work is ideal if you only require part-time wages, but underemployment doesn’t keep the roof over your head and feed your family. It doesn’t cover your bills and it certainly doesn’t make you feel safe. It puts you in almost constant survival mode and this engenders anxiety, hopelessness and resentment because desire and effort are made to seem almost redundant. So, because the underemployed employee can’t earn enough to even cover life’s basics, we know that financial assistance is required from the State.
Suddenly, through a variety of top-up benefits, you are beholden to all the lucky, tax-paying public and, to add insult to the injurious and carelessly laid policy traps, you are generically and fatuously labelled as a ‘scrounger’ who must have some terrible moral deficiency. You are now a gratuitous drain on some fictionalised hard-working majority. Ironic considering how very few people would knock back a chance to genuinely improve their lot if real improvement was on offer.
Maybe, as some will tell you, part-time work, temporary and zero-hour contracts are sneaky economics and avoidable. I suspect this is largely true and quite curable with sufficient and appropriate investment in our common needs, such as infrastructure, public services, housing, science and technology (especially green). In such progressive and abundant circumstances, employees may even see their personal and collective value being more highly respected and rewarded – sufficiently to pay tax.
Maybe, as others will tell you, this epidemic of underemployment is just the consequence of our modern economy to which we must adjust. If this is true then we need to urgently and seriously find ways to make life affordable on minimum hours and minimum wages.
Lifting people out of tax is symptom-based popularism – a convenient way of ignoring the larger reality: we wouldn’t need so much money if it didn’t cost so damned much to live.
There is another issue around this seeming gift of tax exemption which underpins my philosophical view: that renowned concept of ‘no taxation without representation’. Tax contributions are as much a citizen’s way of participating in the running of their country as is their vote. It actually anchors the citizen’s vote by virtue of the State’s need for the contribution as a vehicle of that representation. Thus we derive our right to have a say in a democratic system.