“Don’t tax you, don’t tax me, tax that fellow behind the tree!”– Senator Russell B. Long
As the world mourns former British Prime Minister Margaret Thatcher, I think it’s amusing to note that a new tax scheme ultimately did in her political career. Thatcher abolished the “domestic rates” plan, an assessment based on the rental value of property, and instituted the “community charge” plan, a per capita levy. The average Briton loved government as long as “the rich” were paying for it. Britain’s far-left rallied against this scheme, called it a “poll tax,” and people rioted in the streets.
The beauty of a per capita taxation scheme is in the consequences of it. Every single citizen is reminded, every single day, of the burden government really is. The horror of a per capita taxation scheme is that it taxes a citizen’s very existence. It’s a dilemma for even the most libertarian thinkers but I really like this idea…in theory.
Property taxes are assessed to property owners but are ultimately paid by property occupants. If rental income can’t support carrying costs, owners would sell the property; the burden of government is ultimately exposed. A per capita scheme removes taxes from the carrying costs of the property, paving the way for lower rents. More importantly, it makes every citizen aware of the size and scope of their government.
Limited government guys, like me, love the notion that the “low information voter” would have full disclosure about the cost of government. We like to think that people would demand drastic spending cuts along with commensurate tax apportionment reductions. Realistically speaking, we’d probably see a tax revolt like the one which ended Thatcher’s political career.
Russell Long was right. If you tax cigarettes, alcohol, carbonated beverages, plastic bags, paper bags, high-income people, or people with beachfront properties, yachts, or businesses, then you can sell just about any government expansion to anybody, even if all of those taxes are paid in higher consumer prices, hiding the real cost of government. That sort of intentional obfuscation, though, just seems immoral.
It feels like…well…it feels like theft.
My Mitty-like daydreams of the Legislature, facing the pitchforks and torches, makes me smile but…
…the tax reformer would probably be at the pointy end of the pitchfork — like Margaret Thatcher was — and that makes me a little bit sad. At least a fella can daydream when he laments the passing of a free market champion. RIP Baroness Thatcher.