Wednesday 22 November 2017

Government taking easy route by overtaxing the squeezed middle

Minister Paschal Donohoe
Minister Paschal Donohoe
David McWilliams

David McWilliams

With the Budget just ahead of us, it is timely to remind ourselves of the original Colbert report. I don't mean Stephen Colbert, rather Jean Baptiste Colbert. He was the extraordinarily talented finance minister of Louis XIV who radically overhauled the French economy of the early 17th century, generating the revenues that were subsequently squandered by Louis and his free-spending grandson.

Ultimately, Colbert's ability to raise taxes emboldened the French royalty to build more and more monuments to their own vanity, fuelling the discontent that led to the Revolution. His attitude to taxation can be summed up by this brilliant, but rather cynical, quotation: "The art of taxation consists in so plucking the goose as to obtain the largest number of feathers with the least possible amount of hissing."

The goose that hisses most gets taxed least. Normally, in any society, those who hiss most tend to be those either at the top, who are extremely powerful and have most to lose, or those at the bottom, who are the neediest and thus have least to give. Those in the middle are taxed most because they hiss least.

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