There are many people who tell us that taxation in the UK is too low. Just think of all the gorgeously bureaucratic things that could be done if only the government had more money! Then there’s the number of people who actually do pay more tax on the basis that they think the government should have more money. The second being a rather smaller number than the first.
Which does bring us to that basic point that economists do insist upon making. Revealed preferences are a much better guide to what people do in fact believe than are expressed. Or, as folk wisdom has it, talk is cheap. That many shout that taxes should be higher – usually to insist that them over there should be taxed more – is interesting and amusing. But the actual number of people who really believe taxes should be higher is the number of people who voluntarily offer up more of their own hard earned to the government.
Which means that, according to the aggregate views and actions of the population of Britain taxes last year were too low by exactly the amount of £11,069. Everyone else is just virtue signalling:
Donations to the Treasury have dwindled in recent years, however, even as the country’s debt remains relatively high. There were just 14 donations and bequests to reduce the national debt in the 2018-19 tax year, totalling £11,069, the UK Debt Management Office said.
That is the revealed preference of us all in aggregate.
The total amount donated explicitly towards helping reduce the national debt in 2017-18 year was a tiny £762, given by just five people. In contrast five years ago, in 2013-14, the Treasury received a bumper £799,390 from 16 people — though this was skewed by some large property bequests.
At which point a certain amount of ego polishing. As far as I’m aware at least I was the very first person to point this out in the UK. Here, in The Times:
LAST YEAR there were five people in Britain who thought that their taxes were too low. No, this isn’t the number of people who have called for higher taxes. Rather, it is those who were so convinced of the righteousness of state spending that they voluntarily sent extra money to the Treasury.
That was in 2006.
Economists have a handy term called “revealed preferences”. In colloquial English it means “look at what people do, not what they say, and certainly never take notice of what they say others should do”. Now, you can’t help but notice that there is a disparity between those who say that taxes should be higher and those who act as if they should be. Clearly, an individual who really believes that the Government is more effective at spending his money would voluntarily offer up more than the legal minimum of taxation. That we have fewer people acting in this manner than are to be found writing columns and making speeches calling for higher taxation shows a certain gap, does it not, between public utterances and private actions?
It took a couple of months to get the number out of the Treasury. And of those five, four were dead too. The T being astonished that anyone would want to know the numbers. They weren’t recording them in any specific place, just didn’t have them to hand.
And now they do have them to hand, they announce them. Presumably because once it was pointed out that it was a useful number to reveal they decided to continue to reveal it.
It is interesting though that in 2017 there were still only 5 people who thought taxes were too low, the same number as had done in 2005. The rest of the 69 million of us thought taxes were either just fine or too high. Which does rather give the lie to the idea that we’re a low tax nation, doesn’t it?
My thanks to Scotty McScot for bringing this year’s figures to my attention.