Government and Institutions

People have forgotten the perils of Big Government

The new mantra of the people is “tax more, spend more”, at least according to the British Social Attitudes 2017 findings, released yesterday.

For the first time since 2004, more Brits (48 per cent) support government increasing the tax take than support keeping it around the same level (44 per cent).

Many are hailing this as some sort of moral achievement on the part of the public, revealing their preference for Robin Hood over King John.

Others aren’t as impressed. My IEA colleague Jamie Whyte argued yesterday that the desire to extract money by force (which, remember, is what happens when people are taxed) is not obviously virtuous, even when the money will be used to help the needy.

Furthermore, the survey results are based on stated preferences, which often tell us only what people think they ought to prefer.

A few years back, the Adam Smith Institute’s Tim Worstall made the effort to contact the Treasury to see how many people were choosing to pay more tax than required.

The answer Tim received was five people, including four legacy gifts. Perhaps the one living person who increased their own tax burden back then took part in the British Social Attitudes survey, but one person alone does not get us to 48 per cent of the population.

For me, the starkest revelation of the findings is the disconnect felt by the public between interventionist policies and how big government affects our daily lives.

Ask someone whether they are in favour of a higher tax that won’t apply to them, and they are likely to answer yes, since they will expect to receive some of the benefits. If a tax applies to much richer people with lives quite separate from one’s own, self-interest is bound to take over.

But informed self-interest should suffice. High taxes are a drag on economic growth, which ultimately makes everyone worse off. And taxes that appear to hurt only disliked “others” often hurt those they are supposed to help.

Increasing corporation tax, for example, is praised as a way of making companies pay their “fair share”. Yet economic analysis reveals that about half of the money raised by corporation tax comes out of workers’ wages.

Similarly, the Labour party’s pledge to raise taxes on the top five per cent of earners received a great deal of praise. Yet those who would fall into the increased tax bracket include GPs, academics, technicians and various other workers not normally described as rich.

We have lived in a relatively free society and economy for so long now that many of us have forgotten how a growing government takes hold of everyone.

The civil liberties section of the 2017 survey drives this home. If the government had the powers that respondents of the British Social Attitudes survey want to give them, we would all be at risk of losing our privacy and our freedom – 53 per cent agree to letting the government “detain people as long as they want without putting them on trial” in times of terror.

To be clear, this is a majority of people supporting indefinite detention without a conviction. Surely this is the essence of disconnect.

Perhaps someone should do a survey on policy consequences. Questions about government interventions in the economy could be phrased: “should the UK’s youth unemployment look like Spain’s?” Civil liberty questions could be linked directly to the option of a Venezuela-style government, which offers no restraints on the treatment of its civilians, in the name of safety and order.

Our politicians are telling the public that we can spend, tax, borrow, and legislate without consequence. It’s a popular fantasy, especially when you imagine that the interventions will be against not you but your neighbour.

But the survey tells us that people have forgotten one crucial truth: any interventions powerful enough to affect your neighbour will inevitably visit you one day.


This article was first published in City AM.


Kate is Associate Director of the IEA. Kate oversees the IEA’s Media Centre and digital platforms, creating and commissioning content for the website, social media, and ieaTV. Kate regularly features across the national media, including appearances on BBC News, Sky News, Channel 4, Channel 5, ITV and BBC’s Question Time.

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