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Diary of a (Maybe) Retired Pastor

Tag: taxes

  • This Labour Government Disappoints

    mayberetiredpastor

    This Labour Government Disappoints

    Where there is no prophecy, the people cast off restraint …

    Proverbs 29:18a Old Testament, The Bible.

    The timing of the government’s publication of its immigration whitepaper (proposed legislation) was clearly a response to the astonishing success of the anti-immigration Reform party in the recent English local elections. The whitepaper’s emphasis on dramatically reducing immigration and the timing of its publication clearly demonstrates a government that is reacting to populist feeling rather than seeking to shape national debate.

    Reducing the number of legal migrants can be a legitimate government policy but what is missing is any sign that the consequences are being clearly addressed. The aim is simply to reduce the numbers as rapidly as possible to some arbitrarily small number. The care sector has already loudly warned that reducing their ability to hire staff from overseas will mean closures in a sector that is already woefully inadequate for what we need as a nation. All year, the universities have been cutting courses and reducing staff as they try to plan around the major reduction in income as overseas student numbers plummet. Then, there is the growing financial burden of paying for the nation’s pensions. This currently represents around a half of the total welfare budget (1) and is only going to grow bigger as more and more people reach retirement age. And there is the NHS. Despite the increase in funding in the autumn statement, the NHS this year is planning to cut thousands of clinical staff in order to balance the books (2). Decimating the immigrant workforce means decimating the income tax paid by that workforce. How, then, are the nation’s pensions to be paid for? How, then, are we to pay for enough doctors and nurses in the NHS to stop playing catch-up? How do we replace the lost income of universities? How do we prevent closures of care homes?

    It comes down to money. After reducing the immigrant workforce is the government going to invest enough money into these sectors to induce the UK home workforce to take up these jobs or to cover the loss of income? But for the government to invest more money into these sectors taxes will have to rise. It is this conversation that the government refuses to have with the electorate. How much are we willing to pay in taxes so that we can have effective public services, good pensions, and reduce the need for immigrant workers?

    The Bible pithily points out that in the absence of prophecy a nation ends up in disarray. In the Bible, of course, prophecy is tied particularly to the wisdom and truth of God. But we do not need to specify divine inspiration to see that this applies in our time and place. Truth and wisdom, divinely inspired or not, is an important aspect of good government. Where a government will not offer truth and wisdom to a nation, particularly in debating public policy, there will be disarray. In the specific case of the UK, the choice between good public services and long term benefits for seniors and how much we are willing to pay, either directly through taxes or indirectly through immigration,  needs to be made clear and be part of the national debate. Instead, this government (as, indeed, the previous government) seems content to react to populist sentiment rather than lead national debate. The resulting national disarray as public services and benefits shrivel in the vacuum simply nurtures extreme and false sentiment. Many of us had hoped for something more worthy from a Labour government.

    1. https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-information-and-guidance/benefit-expenditure-and-caseload-tables-information-and-guidance#social-security-spending-in-the-united-kingdom-and-the-welfare-cap acc. 30.5.25
    2. https://www.theguardian.com/society/2025/may/09/nhs-hospitals-england-cuts-financial-reset

  • The Most Hated Tax

    mayberetiredpastor

    The Most Hated Tax

    25 If anyone of your kin falls into difficulty and sells a piece of property, then the next-of-kin shall come and redeem what the relative has sold ….  28 But if there are not sufficient means to recover it, what was sold shall remain with the purchaser until the year of jubilee; in the jubilee it shall be released, and the property shall be returned.

    Leviticus 25;25-28 The Old Testament

    The most hated tax in the UK is, it seems, inheritance tax (or, estate duty). This is the tax paid on the inheritance passed on by parents to their children. The success of the right wing media in embedding this antipathy amongst the general population is impressive and rests on the narrative that the inheritance we pass on is the result of the hard work of the parents over their working lives. It’s their property. It feels like legalised robbery. What is never emphasised is that the majority of people will not have to pay any inheritance tax because no tax is payable below £325,000 (or £500,000 if you pass your home on to your children). Only those who have more than this when they die will have to pay any tax. The majority of people do not have this kind inheritance to pass on. What is also never said is that inheritance tax is one of the most effective ways in ensuring that extreme wealth is released into the wider economy rather than being hoarded by a small minority. It is the reason why the power and privilege of the aristocracy was broken in the last century thus enabling general living standards to rise and promoting a more equal society.

    The year of the Jubilee (referenced above) is usually treated as an interesting but obscure provision in the Bible for the ancient people of Israel. Every 50 years, any land purchased had to be returned in its entirety to the original owners. Wealth accumulated by the minority could not be held in perpetuity and passed on to their descendants – it had to be redistributed back to the people. It was, in essence, a 100% inheritance tax! The wealth of the land was to be equally shared so that every Israelite had the opportunity to prosper.

    By and large, Christians are just as antipathetic to tax, inheritance tax in particular, as the general population. But the law of the Jubilee challenges that antipathy. If you are a Christian who professes to take the Bible seriously, and believes that its provisions are relevant to today’s society, then the law of the Jubilee should give you pause for thought: Should you reevaluate your antipathy towards inheritance tax?   It is not simply an effective tax it is a divinely ordained tax and its presence as part of our taxation system should be welcomed as an example of kingdom ethics at work in our modern society.

    The Jubilee law is part of the Holiness Code in Leviticus. It begins with the call to be holy because God is holy (1). Christians are called to reflect God’s character not only in their personal lives but also in the society that they build. The UK Chancellor will very shortly present the first budget of the new government. It is widely anticipated that changes to inheritance tax to raise more income to fund essential public services will be included. How will Christians respond? Will we raise our voices in complaint at more taxes and threaten to leave the country, or will we welcome the alignment of public policy with biblical values and the greater reflection of God’s character in society?

    1. Leviticus 19:1-2

  • Why Is Tax Bad?

    mayberetiredpastor

    Why Is Tax Bad?

    4 for [government] is God’s servant for your good. … 5 Therefore one must be subject, not only because of wrath but also because of conscience. 6 For the same reason you also pay taxes, for the authorities are God’s servants, busy with this very thing.

    Romans 13:4-7

    41 He sat down opposite the treasury, and watched the crowd putting money into the treasury. Many rich people put in large sums. 42 A poor widow came and put in two small copper coins, which are worth a penny. 43 Then he called his disciples and said to them, ‘Truly I tell you, this poor widow has put in more than all those who are contributing to the treasury. 44 For all of them have contributed out of their abundance; but she out of her poverty has put in everything she had, all she had to live on.’

    Mark 12:41-44

    This week’s political headlines in the UK have been dominated by the accusation that the Labour party’s spending plans would result in families having to pay an extra £2000 in tax. Apart from the dubious method of calculation and the sleight-of-hand  trickery to  make it seem as bad as possible, the real question it throws up is why should this be considered a viable method of attack by one party against another? That it is so considered is clear, Kier Starmer and the Labour Party have been vehemently denying this claim all week.

    We have a very poor and corrosive attitude to tax in our political culture. Even amongst Christians it is generally held as a bad thing, at best a necessary evil. Yet the New Testament clearly defines it as a something required by God. Taxes are to be paid in order that the authorities can work for our good. Of course, the tax burden needs to be shared fairly across the population and it is very much the case that the tax burden is very unfairly shared in the UK. But none of this alters the fact that taxes in principle are to be welcomed for the benefit of all, as required by God.

    Fairness is an important principle in the levying of tax. One consequence of our corrupt attitude to tax is that government resorts to hidden taxes so that we cannot easily see how tax is being raised. So, the tax-free allowance has been frozen for the next several years by the present Conservative government and this will not be changed if the Labour Party were to be elected in July. It means there will be a significant increase in tax raised over the next few years, but those paying more tax will be those currently earning less than £125,140 a year. Everybody above that will not be paying any more tax! Similarly, proposals by the present Tory government to abolish inheritance tax (estate duty) only benefits those wealthy enough to have more than half-a-million pounds to pass on, those that don’t wouldn’t pay inheritance tax anyway.  Once again, the wealthiest carry less of the tax burden.  

    If we were able to have open and dispassionate debates about tax and spending we could see much better how the tax burden was being shared across society. But as it is, the Tory Party seek only to relieve the very wealthy of their obligations to the rest of society – and to do so in a way that the rest don’t notice it – and the Labour Party is too scared to address the issue openly.

  • Here’s A Thought

    mayberetiredpastor

    Here’s A Thought

    Now, here’s a thought. Like everyone else I suppose, I get advertisements on my Facebook Feed. Unlike some, perhaps, I don’t particularly mind them, in fact, quite often I learn about useful things on the market I might not otherwise have known about (I’m a sucker for those useful looking gadgets that claim to be able to solve that very problem you didn’t know you had until that ad!) so, I hardly ever block ads.  

    Over the last year or so, I have started seeing ads. for private healthcare plans. For about £23 a month they appear to guarantee no waiting times for hospital procedures should you ever require them. I’ve not gone into the fine print so don’t really know what sorts of procedures are covered and what aren’t, doubtless there are many caveats and conditions, certainly they talk about surgery and operations, but this set me thinking.

    It’s no secret that the NHS is suffering from long waiting times for elective procedures, and reducing if not eliminating the waiting times is a major political goal for every party. These private health care ads. are basically suggesting that the cost of eliminating waiting times is £23 a month. If we multiply this up by the UK working population of around 33 million (1) this  comes to £9.1 billion a year. So, at the cost of £9 billon a year waiting times in the NHS could be eliminated, or so these ads. imply.

    But wait a minute, I hear you cry, the population of the UK is something like 67 million people, why have you multiplied by only 33 million? Well, not everybody requires hospital care all at the same time and these healthcare companies must have done the sums as to what would it cost to have zero waiting times for those willing to pay and for them to make a (probably) excellent profit. So I think multiplying by the working population will give us a reasonable stab at what it would cost to eliminate waiting times in the NHS. And, it’s just a thought!

    How much extra tax would we all have to pay to do the equivalent of taking out this monthly healthcare plan for zero waiting times in the NHS? The annual cost of the healthcare plan is £276. Average income according to the Office for National Statistics is around £35,000 (2). Taking into account the tax-free allowance this means an average tax increase of 1.2%, of course, some would pay less and some would pay more. It would be the government’s job to balance out the tax increase fairly between the less well-paid and the more well-paid, but an average 1.2% doesn’t seem much of an ask to eliminate waiting times. And that’s the beauty of doing this kind of thing through tax. By sharing the burden, all of us can benefit at a cost we can afford. A private scheme only benefits those who can afford it.

    £9 billion just happens to be the amount of surplus the Chancellor apparently had at this year’s budget. What did he choose to do with it? Devote it to eliminating the waiting times in the NHS? Of course not, he decided to use it to reduce the National Insurance  rate by 2%! What this means is that, going forward, the government has £9 billion less annually to spend on the NHS and, as a result probably, waiting times will get longer! Just a thought.

    1. https://researchbriefings.files.parliament.uk/documents/CBP-9366/CBP-9366.pdf
    2. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2023  acc. 23:32, 12.4.24

  • I Don’t Do Gift Aid Anymore

    mayberetiredpastor

    I Don’t Do Gift Aid Anymore

     This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. 7 Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour.

    Romans 13:6-7

    We are in the fortunate position of being able to make donations to various charities. Of course, we give to our church and have always Gift Aided it, but we also try to support other causes. Lately, I have ceased ticking the Gift Aid box on the donation forms. Gift Aid is an option to include the tax that you would have paid on the donation so that instead of going to the government it goes to the charity. It occurred to me that the more we Gift Aided, the less of our taxes would be retained by the government and, hence, less would be available to fund public services. At a time when all our public services are financially compromised the government needs all the taxes it can get to keep them going! So, I have stopped adding Gift Aid to our donations.

    We need a different national conversation around tax. Our major political parties are locked into a “reduce taxes at all costs” paradigm. As a result, we see our public services crumbling and the government constantly finding new ways to increase tax revenue without appearing to do so. Consequently, our tax system is unfair, unbalanced, and inadequate. And it is opaque in the extreme! Certain sections of the media will stridently trumpet the historically high rates of taxation we are experiencing but (with the exception of one or two bodies) fail to point out that our taxation is no heavier than the average of similar European countries even at these historically high rates. The only winners of our tax system are the extremely wealthy.

    Our politicians treat us as children believing that we cannot hold an intelligent and mature conversation about the cost of public services and the amount of tax that needs to be raised in order to have good public services. They believe that we can be fobbed-off with constant reductions in general taxation and not make the connection with failing public services. Taxes have to rise and the extremely wealthy have to pay more in taxes.  This has to be done openly and transparently (i.e. income tax) and not through Faustian mechanisms designed to obfuscate and deceive. Of course, restoring public services and improving public services after years of deliberate financial starvation in order to fund tax-cuts cannot be done overnight. The Junior Doctors’ dispute is testament to that – restoring a 35% cumulative loss in pay is not feasible overnight but the present government, dogmatically wedded to reducing taxes, cannot provide a long term path to restoration that  might resolve the dispute.  But will the Labour Party, Keir Starmer and Rachel Reeves in particular, be bold enough to grasp the nettle and start to talk honestly about taxation and the cost of restoring public services? So far, the signs are not encouraging.

  • The Emperor Has No Clothes On!

    mayberetiredpastor

    The Emperor Has No Clothes On!

    For the same reason you also pay taxes, for the authorities are God’s servants, busy with this very thing.

    Romans 13:6

    We are in election season and the recent by-elections appear to be good news for the Labour Party. The Conservative (Tory) Party is, arguably, the most successful political party in the world in the modern era, which, when you come to think about it, is surprising! How is it that so many people have had the wool pulled over their eyes for so long?  The Tory boast is that they are the party of economic competence and it is the stick with which they regularly beat the heads of the Labour Party, and people are convinced. How do they do that? It seems to me that it is a very modern example of the Emperor has no clothes on!

    The fundamental dogma of the Tories is that taxes should always be reduced, nothing else is as important as this. Never has this been more clearly demonstrated than in the debacle of Liz Truss’s short-lived premiership. But it continues to be demonstrated in the present Chancellor’s teasing of tax-cuts, all-be-it far less dramatic, for the coming election. The cutting of taxes is the be-all-and-end-all of Tory economic policy.  But if you only, and continually, cut taxes then where is the money coming from to pay for schools, hospitals, roads, railways etc.? The Tories appear to have three answers to this: first, grow the economy; and then, in the meantime, spend less  and  borrow more – borrowing is at its highest since World War 2. It is an inevitable consequence of the latter two that public services will, in the end, deteriorate as less and less money (in real terms) is made available to public services and more and more money is needed to pay the interest on loans. The first is interesting in that it is essentially a religious response, a prayer to the god of economics! And who knows how that will work!? So, we see huge waiting times across the NHS; literally crumbling infrastructure in our schools; increasing backlogs in the courts, fewer and fewer lawyers willing to do legal aid work; not enough housing for the population; social care that is all but non-existent, an antiquated public transport system, armed forces not fit for purpose, more and more people turning to food banks – the list goes on!

    Economic competence is about ensuring that all the services required to maintain a healthy modern social order are present and work well. This is exactly what the Tories have failed to do and this is not an accident but the inevitable consequence of a fundamental dogma that taxes must only be reduced, never increased. The Tories appear to have convinced the British public that they are competent by reducing their headline taxes. But they have failed to ensure effective public services in every area of life. The Emperor really has no clothes on!  

    Does this mean that the Labour Party has it all figured out? Watch this space ….!