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This article from
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Dear Senator . . .
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JANE STUBBS
Partner, PricewaterhouseCoopers
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An open letter to Finance president Senator Terry Le Sueur, outlining some of the tax problems of past eras.
I’ve been thinking about the problems we all face on tax in the Island and it seems to me that nothing is really new. Our ancestors faced the same fundamental challenge of raising enough money to balance the books and although some of the methods have changed there’s still a lot we can learn from them about how – and how not – to tax. So let me offer you some advice, drawn from the pages of the history books. First, it really does seem to be true – and not just a convention – that consumption taxes like GST can change people’s behaviour. Our everyday lives now are still determined by what our ancestors decided to tax. Newspapers still publish in broadsheet format because of a tax on newspapers introduced in 1712 which based the charge on the number of sheets used (larger pages of course meaning fewer sheets). Taxing hair powder in 1795 effectively put an end to the fashion for wigs in England. And, dog-lovers take note, the decision to tax dogs by reference to their tails encouraged more widespread docking of some breeds in the late 18th and early 19th centuries. Of course, you can deal with this sort of evasion by using the law to force people to pay. In France, the Gabelle, a tax on salt first levied in 1386, had by the 16th century become a cause of savage rioting. Why, if all one had to do was limit one’s use of salt? Because the law stipulated that everyone over the age of eight was obliged to purchase a weekly minimum amount of salt at a fixed price – and peasants caught using smuggled salt were subject to the most brutal punishments.
As a politician, beware what you promise – you might end up having to swallow your words. Gladstone promised in his 1853 Budget speech that income tax would expire completely by 1860, noting as he announced this: ‘I cannot wonder at the smile which I perceive that my words provoke.’ Presumably the smiles faded over the years as successive governments (both Whig and Conservative) pledged the abolition of this ‘temporary’ tax but failed to achieve it. Also, take care that your stated principles do not betray you. The concept of ‘no taxation without representation’ became commonplace in the American Revolution. But in 1780, just four years after the Declaration of Independence, the tables were turned when seven African-American residents of Massachusetts put forward a petition to the State Court claiming that they should not be taxed as they were without the vote. That they failed may come as no surprise – one wonders if the irony of their position was lost on those in the courtroom.
What about those who collect the tax for you? They seem to have been around for as long as tax itself. In ancient Egypt, meticulous scribes recorded the harvest and surveyors measured the land with ropes to calculate how much grain it should yield and compared this to income declarations. More odious was the practice, developed by the Romans, of selling the rights to raise tax to private individuals (so-called tax farmers) who paid a fixed sum for the right to collect customs duties within their districts and creamed a margin out of the local population. Extortion and abuse was widespread. Small wonder that such people were regarded by the Gospel-writers as sinners and outcasts from society who were disgraced along with their families. English history also has some lessons for tax collectors. In 1380 it was an over-zealous tax collector who lit the fuse for the Peasants’ Revolt when he tried to establish whether a young girl was of taxable age (15) by stripping and assaulting her. He must have regretted it. The girl’s father was Wat Tyler. He killed the tax collector and turned rebel, leading some 100,000 peasants in the march on London. Tyler’s rebellion was a bloody affair and he met a brutal end at the hands of the Lord Mayor of London, his head being displayed on London Bridge. Of course many thousands of others have died in causes which had their origins in disputes over taxation. But I think you might prefer the examples of those men and women who sought non-violent protest as a means of objecting. Take John Hampden, who led the opposition to Charles I’s Ship Money in the 17th century. This tax was supposed to fund naval defences and had traditionally been raised on coastal towns. Hampden, not unreasonably, objected to paying it on his inland estates in Buckinghamshire. He argued his case with such dignity and persuasion that even though he lost in the courts, the popular impression was of a moral victory and the tax was withdrawn. Hampden was remembered by Clarendon as a man of few words who ‘was never without the dexterity to divert the debate to another time, and to prevent the House determining anything in the negative which might prove inconvenient in the future’. These are skills we shall need over the coming months in Jersey.
Some might adopt more flamboyant methods. The Boston Tea Party in 1773 must have been one of the most picturesque protests in history. Objecting to tax breaks given by the British to the East India Company on tea imports, three companies of men masquerading as Mohawk Indians took to the streets on a December night. Passing through a tremendous crowd of spectators, they boarded three East India ships, broke open the tea chests and heaved them into the sea. A series of copycat protests followed all along the New England coast and one can’t help wondering if the chance to dress up was one of the reasons for the popularity of the idea.
Dressing up may not suit everybody so you might also want to be prepared for those who dress down, as Lady Godiva did. Her celebrated naked horseback ride through the streets of Coventry was in fact a protest against taxes being raised by her husband the Earl of Mercia. (And in case you’re wondering, according to the chroniclers, it worked.) So let me close with a question for you and for the people of Jersey – would you dare to bare for fair taxation?
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