It’s annoying enough to have the government force employers to withhold money from one’s paycheck, but the new government in the UK wants to take it one step further. Under a new proposal, employers will send employees’ paychecks to the government, first. Then, when they’re done with it, the government will give what’s left to the employee:
The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer.
The proposal by Her Majesty’s Revenue and Customs (HMRC) stresses the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid.
Currently employers withhold tax and pay the government, providing information at the end of the year, a system know as Pay as You Earn (PAYE). There is no option for those employees to refuse withholding and individually file a tax return at the end of the year.
If the real-time information plan works, it further proposes that employers hand over employee salaries to the government first.
And this from a Conservative government? Obviously the word means something different on the other side of the Atlantic than it does here.
Fausta points that this is how foreign employers pay their workers in … Cuba. The company gives the government the check, and Havana gives the campesino what’s left. Some may wonder what the substantive difference is between this and normal withholding. In my opinion, the difference is huge: while the government takes a cut under the withholding system, the check is still a matter between the employer and the worker. Under the Cuban-British model, the worker becomes dependent on the central government for his money, no matter where he works – or if he works at all, given welfare. It’s another way of turning a free citizen with his own property -in this case, a paycheck- into a ward of the state.
I can sympathize with the desire to make tax collection more efficient in order to get the money the government is owed, but maybe HMRC should consider something radical, such as a low-rate flat tax that will leave more money in the hands of the citizen, who will then use it to generate economic activity and, in turn, increased revenue for the government. That pesky little Laffer Curve in action, again:
But that kind of logic is alien to the statist, whose answer to every problem is the expansion of government power and its further intrusion into every aspect of one’s life, inevitably hobbling individual liberty. What next? Simply declaring everyone to be an employee of the State Crown?
(Crossposted at Public Secrets)