Archive for the ‘transparency’ Tag

Assange, again

Assange’s vainglorious posturing is getting more and more tiresome. I am deeply disappointed that Ecuador decided to give him asylum, but it does serve his purpose.
It long ago ceased to have anything to do with transparency, and is now all about promoting Mr Assange.
I have no doubt that when in Sweden he used his notoriety to masculine effect. The charges he faces are, so I am led to believe, based on a Swedish law that makes having unprotected sex prima facie evidence of rape. Whether it was rape is something for the courts to decide (and it seems that only the question of consent is at issue, he admits to the contact. Nevertheless, if he did have unprotected consensual sex outside a committed relationship he is even more of an arrogant prick, just not (quite) a rapist.
But this is the point. The world needs something like Wikileaks, a secure channel to publish sensitive information that the powerful want to keep secret. It does not need Wikileaks as a vehicle for Mr Assange’s ego trips.

Tax and Transparency

Of course, I should be doing my tax return.

Instead, I’m thinking about tax in the abstract.

It’s no secret that our tax system is broken. Broken here, in the UK, and just as badly broken in most other countries of the world. The strongest evidence is that in most countries, despite tax systems that are intended to be progressive,  the rich pay proportionately less tax than the poor.  They manage to do so because tax systems are too complicated, so that at high tax levels (I didn’t say the rich pay less tax than the poor, although, in aggregate, they do, because there are fewer of them, but that they pay proportionately less) it is worth paying a tax professional to reduce one’s tax bill.

The viability of professional tax-reducers is a strong indicator of an over-complex tax system. The more numerous and successful the tax profession in a broadly compliant economy, the more complex the tax system.

So why is tax so complicated? I think the main reason is that we tax the wrong thing. Tax is levied (mainly) on  income, which seems – at first sight –  eminently fair. But what is income? If you get paid a salary, or dividends from savings, it’s easy to see – it’s the big number on your payslip. But if you run any sort of business, you can deduct your business expenses. What’s allowable?  This is the first area of fertile ground for a tax professional.

Now, what about capital gains? So we have to invent a whole new tax to cover capital gains, because capital gains aren’t income.  Depending on whether capital gains tax is more or less than income tax, tax professionals can be called in to classify every receipt into its most favourable category.

Instead, in my opinion, we should be taxing cash flow. Cash flow is clear and easy to define and to measure. There’s no need to distinguish cash realised from disposal of an asset from cash in a paycheque.  For individuals, the only deduction would be cash invested, either as equity in a corporation, or into bonds.  In this radical new world, because it is radical, corporations wouldn’t pay any tax at all: but, instead, would be required to be *totally* transparent.  All money leaving the corporation (whether as salaries, dividends, bond interest, or on the sale of stock) would be taxable.

more transparency, now

This blog is about building a progressive new liberal enterprise economy on the foundation of total openness in public and commercial life, using technology as the key.