Stealth Taxes Are Annoying and Ineffective
The sneakier the levy, the less the incentive to work and invest.
An unwelcome letter.
Photographer: Peter Dazeley/Getty Images EuropeBritish pleas to make the tax system less complex are never more heartfelt than in the approach to the annual Jan. 31 reporting and payment deadline — when stealthily introduced complexity hits hardest. The more byzantine the revenue-collection process becomes, the less fit for purpose it is.
The primary goal of taxation is, of course, to fund public services. However, a critical secondary objective is to raise revenue with minimum disturbance to economic activity. As French king Louis XIV’s finance minister, Jean-Baptiste Colbert, put it: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”