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Tim Worstall questions whether Polly Toynbee was correct to call Britain a ‘low-tax country’. His commentators attempt to answer this by comparing corporation taxes and OECD figures for the tax burden.

No-one on the thread has yet remarked that if the relevant comparison point is indeed OECD figures for total tax revenue as a percentage of GDP, then Britain clearly could be called a ‘low-tax country’. In 2003, the UK was at 35.6%, which is below the OECD average of 36.3%.

However, I am not sure it is correct to interpret Toynbee’s ‘low-tax country’ as making a simple claim about the UK’s tax burden (that is, tax as a percentage of income) compared to other countries in the world. The fact that Worstall and his commentators contrast the British tax burden with only selected countries like the United States (rather than with average figures), and the fact that dsquared immediately started talking about corporation taxes are both signs of this. The tax burden figure is pretty meaningless without any consideration of population, the distribution of wealth and taxes, the nature of taxation, the benefits received back by the taxpayers, etc. For example, by paying more tax, citizens of a small, rich country can realise some extraordinary social benefits (like the NHS), while citizens of a large, poor country might only provoke a subsistence crisis. What is an overly high tax burden for a poor country might well be an overly low tax burden for Britain (a similar concept lies behind progressive taxation of the rich within Britain, of course).

Toynbee herself questions the conceptualisation of tax in terms of a burden in her very next sentence: ‘Campbell promises to keep the tax “burden” at exactly Labour’s level, while redistributing within it, more from the rich to the poor, and new green taxes.’ Free-market ideologues like Tim Worstall may see tax as an obstacle, but Toynbee clearly sees taxation as an opportunity: ‘nothing is for free, better public services have to be paid for, and only tax buys the things that most people want.’ It seems to me the sort of crude statistical comparison practiced by Worstall and his commentators neither critiques nor confirms Toynbee’s position at all. The point at issue is surely whether British taxes are too low for Britain. The example of other countries can and should be brought into the analysis, but we must be explicit about why we are bringing in those countries and not others.