Last week, comments closed on a proposal by HM Revenue & Customs, the British equivalent of the IRS, to “improve” the collection of income taxes. The current system, dubbed Pay as You Earn, is similar to the return-free system proposed by some Democrats here in the U.S. as a simpler way to pay income tax. Return-free filing, as it works in the U.K., allows employers to pay the government on behalf of their employees, who get a receipt at the end of the year outlining their earned income and their “contribution” to the government through tax.
Besides the deluge of paperwork and bureaucracy that return-free filing would bring upon U.S. citizens (in the name of simplicity, of course!), it’s not quite the perfect system envisioned by the Left. Tax Letters have become infamous in the mother land as upwards of 2.4 million Britons have been told that they, or more accurately their employers, have underpaid their taxes during the past two years. Who is to blame for this underpayment? Are employers so greedy that they are keeping withheld monies for themselves? Of course not – the problem lies with the HM Revenue & Customs herself, due to the complexities of tax code that even the agency’s own tax experts can’t seem to understand.
Instead of simplifying the code to account for the changing work patterns of the British people however, HMRC wants to force compliancy by requiring that all paychecks are routed through them and that employers must report “real-time information” including wages, tax filing status, and bank account numbers in order to deposit income after the government put its hands all over it. This is the future of return-free filing – government interference in every aspect of the workforce, even the way wages are paid.
If a government operates under the notion that a person’s income is not their money, there is nothing to stop that government from taxing all of it. Our Democratic friends surely believe this logic, promoting a de-personalization of income and arguing that since currency is printed by the government, all money must belong to the government. Both arguments are absurd, of course, with the latter article so far-fetched that it almost makes my point for me. We see money as a means of exchange, a way to conveniently trade service (i.e. hours spent at work) for goods or vice versa.
To any liberty loving individual, this proposal should send shivers down spines for many reasons. Return-free filing is not transparent and leaves the taxpayer with the burden of proof should any questions arise from the IRS-issued return. It also raises an important ideological question – does a person have a singular claim on the money they earn?