The Daily Telegraph recently reported that economists had calculated that the inheritance tax ‘raid’ by the Chancellor of Exchequer, Rachel Reeves, would result in a loss rather than an increase of revenue for the Treasury. The newspaper said that the tax ‘raid’, therefore, could have ‘backfired’.
This struck me as extremely naïve. It supposes that the aim of the tax was simply to increase revenue, either to reduce the deficit or to ‘invest’ (as government calls increasing pay for the public sector workers who will always vote for it). But in the government’s philosophy, increased revenue brought by a tax may be only a minor consideration, at best a bonus, rather than an end in itself.
What counts for the government, rather, is both the egalitarian message the tax increase conveys and its egalitarian effect, at least in theory (bearing in mind that egalitarian measures often have the opposite effect in practice).
From the point of view of economic inequality, which is a notion that acts like a prion in the brains of many, it does not matter whether equality is increased by making the poor rich or the rich poorer. The latter, of course, is far easier, and moreover is far more gratifying. There is a pleasure in making the relatively fortunate suffer, irrespective of how their good fortune came about. Increased taxation satisfies a certain common human impulse, that of sadism. It is a delight to resentful people to watch people suffer, especially when those people are held to be responsible for whatever it is the resentful resent: nor does the resentment have to be justified in the sense that the identification of the supposed cause is correctly identified. The jealous are not ever jealous for the cause, says Emilia in Othello, but jealous for they’re jealous; the same might be said of the resentful, they are not ever resentful for the cause, but resentful for they’re resentful. Hence nothing, no amount of power, opportunity or success, will ever assuage them.
We may confidently look forward to more taxes that ‘backfire’.
