Perry de Havilland is back on his prickliest form over at Samizdata and has taken aim at public sector workers:
Tax costs a great deal of money to collect, so surely just making all state sector workers tax-free would save huge amounts of pointless circular administration which is in affect just giving them other people’s confiscated money with one hand and taking some back with the other. It is a pointless exercise and essentially a category error to treat public sector wages like private sector wages.
But of course, Perry is working at multiple levels:
I am being somewhat disingenuous… I know full well why the state wants the theatre of state sector employees receiving tax with one hand and paying it back with another…it is indeed to maintain the notion that “they are just like us”.
I am just hoping to get people to focus on the underpinning absurdity and to realise it really is a “them and us” relationship rather than a “we are all in this together” relationship.
His intent is to cause a secondary reaction, which is that tax-parasites in the public sector are exposed for what they are – net beneficiaries of excessive taxation who can – and do – vote for their own jobs to be paid for by private sector workers. In fact, they are 100% the beneficiaries since all of their income taxed or otherwise comes from the private sector. This is genius, of course, and exactly the kind of multi-stage thinking the good-guys aren’t very good at. As hrothgar says over at Bella Gerens “we need to present the ideas in a way that saps legitimacy from the statist arguments” and Perry is doing exactly this over at Samizdata. But commentators Mart and Lee More see a problem: freed from the burden of taxation, the application of tax to the private sector is a pure win for greedy public sector workers:
one doesn’t really want to make public sector workers even more enthusiastic about voting for big government than they are now. Perhaps the solution is to combine tax exemption for public sector pay (and associated pay cut) with removal of the vote for public sector workers.
So, provide a disincentive (disenfranchisement) to match the incentive to raise taxes, and cut off their ability to vote for the rises. Thoroughly neat, but probably very unpopular. Universal suffrage is one of those accepted ideas that nobody questions even if they recognise that we keep voting in rotters.
So, I would like to suggest a slight tweak. This is a one-time-opportuntiy thing, I think, because it relies on the undemocratic house of Lords remaining undemocratic. Killing this bird with the same stone is part of it’s attraction. Here it is: Rather than disenfranchising public sector workers entirely, remove their taxes, and limit their suffrage to local elections and to the Commons. Ballot papers for elections to the reformed House of Lords would be distributed with your tax receipt.You have to be in the morally clean categoy of chipping in for the policies you vote for to influence the composition of the scritinising House. As such, a limited veto power would exist in the Lords where fiscal common-sense would enjoy a slight advantage relative to the Commons.
It might be possible to weight your vote in accordance with the amount of tax you pay but I suggest that option isn’t taken up. The idea isn’t to adopt a plutocratic Lords, but rather to ensure that people that contribute nothing to the the pie, being 100% dependant on tax revenue cannot continue to vote themselves pay rises and make their jobs mandatory under laws as they do now. If the system were weighted according revenue paid over then the vote of a shop keeper would be worthless next to that of a property tycoon, but his opinion is probably not that much less valuable. Also, under the present altruist culture success is seen as a sign of evil-selfishness and it will not be healthy for this policy if it is seen as putting wealth into absolute power. It must restrain itself to filtering out the votes of those that don’t chip in.
Another tactical move would be to make the removal of tax a straight pay rise. We should not deduct tax paid from the headline wage, but rather pay the headline wage. This is a straightforward bribe to allow the policy through, but will also illustrate how much tax money was being moved around and may raise awareness of the burden carried by the private sector.
Most of the time, this policy will make little difference to the passing of legislation as there will be plenty of people, such as low paid workers, who will still advocate for hand-outs in the Lords. The idea is to make it much more likely that financially realistic policies succeed, and force the disenfranchised to persuade, rather than force, the wealth-creators that subsidies and benefits are in the genuine interests of all.