As the Chancellor prepares his post-election Budget, he faces an obvious opportunity. Throughout the last general election campaign, we heard from a great many people advocating higher taxes. And it’s not all vindictive: many, like the writer Polly Toynbee, would actually be liable for a higher tax on the 1pc. A significant number of wealthy people in Britain do actually want to give the government more of their money and at present, there is no easy way for them to do so. Strikingly the singer, Charlotte Church, recently declared that:
“I have paid all my tax since I was 12 years old, and I would certainly be happy if the rate was 60 per cent or 70 per cent. I wouldn’t move away, I wouldn’t have an offshore account.
That would be totally fine, for better infrastructure and public services and more of a Scandinavian model, which I see as far more progressive than the way we are, I would be absolutely fine with that.”
So: let her. At the end of our tax returns, we declare how much tax we owe. Osborne can introduce a new line in the tax return saying: if you think this isn’t enough, how much extra would you like to pay? People like Ms Toynbee and Ms Church can then fill in the extra so they can pay 50 per cent, or even 70 per cent, if they like.
This ‘nudge’ tax reform would be consistent with the liberal principles of a Conservative government while allowing left-wingers to act along with their conscience and hand over more of their income to the government.
So next time, rather than complain that they would be happy to pay 70 per cent tax, such people can proudly claim that they do pay 70 per cent tax. And they will have the tax return to prove it. At present, the only way people like Ms Church can contribute more is through an 1823 law allowing citizens to help reduce government debt (here). It was one of the first acts of Liberal Toryism, and one crying out to be updated.
Finally, at the end of each year, the Treasury can let us know what percentage of British taxpayers opted for extra payments. This would give a useful indication of the general appetite for the higher taxes.
UPDATE: Those saying that this voluntary tax would not make much difference are mistaken. The US runs this a similar (here) and under Osborne a huge share of the tax is drawn from tiny number of people. The best-paid 1pc now contribute 27pc of all income tax. The top 0.01pc pay 4.7pc (an average £2.6m each). The Charlotte Churches of our country – the 1 per cent, if you will – have never shouldered a greater share of the burden. So if she volunteered to shoulder an even larger share , it really would help bring an earlier end to austerity.