By Tim Montgomerie
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It's a simple idea – inspired by something proposed in the USA – but it's one that has apparently caught the imagination of George Osborne. Ben Gummer, Conservative MP for Ipswich, is proposing that every taxpayer in the country should received a statement explaining (a) what taxes they pay and (b) how those taxes are spent. These tax statements could be a powerful way of increasing awareness of the tax burden and therefore they could create further downward pressure on the tax burden. Mr Gummer thinks the statements would have three main benefits:
- "Transparency: taxpayers would see not only how much direct tax they pay but also how this would change as a result of the government’s budget.
- Accountability: taxpayers would see precisely how their elected representatives decided to spend that money on their behalf.
- Democracy: taxpayers would see whether a government was sticking to its promises on taxation and spending. They would also see how opposition parties would spend their money were they in government."
Pasted below is an example of the kind of statement a taxpayer earning £26,000 might receive:
It might be easier to read within this PDF.
The Sun's Political Editor, Tom Newton-Dunn, gives a warm welcome to the idea:
"Is it worth writing a £335 cheque to the MoD so you can sleep safely in your bed for a year? Almost certainly. Is your kids' school worth £599 to you personally? Perhaps so too. But what about the equivalent of a second-hand car from your hard-earned wages to pay for other people's handouts? Because if you earn the average salary in Britain that's precisely what it will cost you. The brilliant idea behind personal tax statements is that for the first time we will be able to make an informed judgment about what happens to our own money."
The Telegraph's Philip Johnston is equally positive:
"If you were to discover, for instance, that £4,000 of the £10,000 you have paid in tax and NICs for the year went on welfare, it might put the argument over capping benefits into a different context. Similarly, you might be happy to learn that, say, £2,400 goes on the NHS; but, then again, you might also listen more carefully to those arguing for reforms not just of structures but of funding."
Ben introduces his ten minute rule bill on this idea tomorrow. ConHome will be championing and reporting its progress.