Income Tax in the UK — A Comparison

Mauritius Times – 60 Years Ago

By Peter Ibbotson

Let us, says N.M.U. (Noel Marrier d’Unienville) in a recent Opinion Du Jour, consider a total annual income of Rs 40,000. Let us suppose that the man earning this gross income has Rs 10,000 which ranks as income tax allowances. He pays tax on the remaining Rs 30,000; a total tax of Rs 8,250, says N.M.U.

Rs 30,000 are approximately £2,300; Rs 8,250 are nearly £619. But in South Africa, declares N.M.U., a taxpayer would pay only £ 192 tax on the same taxable income — approximately Rs 2,573. From this, N.M.U. deduces that the Mauritian taxpayer is hard-done-by; that he is overtaxed.

How about the U.K. taxpayers? How does he compare with his Mauritian vis-a-vis? On a gross income of £2,300, the married man with no children will, in the U.K., pay income tax of £622. If however he is liable to pay tax on £2,300 (that is, if he has a bigger income than that but can claim certain tax reliefs to bring his taxable income down), he pays at least £933 in income tax.

Following N.M.U’s example, — he quoted sample rates of income tax payable in South Africa — I give below sample taxes payable in the U.K. on specimen incomes:

These figures, to adapt N.M.U’s own words, will without doubt inspire several thoughts and remarks among their readers. They show clearly that comparisons with South Africa suit N.M.U’s argument; but comparisons with the U.K. wouldn’t. So, he quotes South Africa and doesn’t mention the U.K.

But to people who complain about income tax, we are entitled to ask: “What is your suggested alternative?” The Government carries out a number of activities; it must have the funds to do so. It can get these funds only by (i) taxation or (ii) nationalising all the means of production, distribution and exchange and using the profits to finance its activities. We know that N.M.U. would throw up his hands in horror at the second suggestion; so we are left with the inescapable fact that taxation is inevitable if the Government is to fulfil its function of governing.

But, says N.M.U., I’m not against taxation; I’m not against the high level of taxation. All right; suppose the level of taxation is to be reduced; that means the Government must curtail some of its activities, or else make severe economies in its expenditure and at the same time continue its activities at the same scale, if possible as now. So, if economies are to be made, so as to reduce the demands of the Government on people’s purses, would N.M.U. state clearly, categorically and without any shilly-shally and wriggling and concealment, exactly where he would make economies in the present Government expenditure in Mauritius?

The choice is simple. Either the Government must levy a high rate of taxation on those whose incomes are sufficiently high to be taxed, so as to have enough funds to carry out its essential work; or it must reduce its work when it reduces its rate of taxation. Or is N.M.U. going to suggest that a different tax should be introduced; one which would exact some tax from even the poor devil with only Rs 80 a month and a wife and family to keep?

Those people who object to paying a high tax on their incomes have their remedy in their own hands. In Mauritius, it is by and large the sugar barons who are subject to high rates of tax; let them, therefore, pay decent wages to their employees, thus reducing their own liability for taxation; that way they will pay less tax. Of course, they wouldn’t have any more left for themselves; but they would be paying less tax. And it’s the fact of paying so much tax that is being objected to so strongly in the press.

But of course, the real objection is to having any money at all taken away to finance social welfare  schemes for bettering the way of life of the poor unfortunates who make up the bulk of the population of Mauritius. N.M.U. and his band of reactionaries aren’t bothered about anything except conserving as much as possible for themselves; the attitude of the campaign waged in Le Cernéen against income tax in general and Mr Hurd in particular reveals the true state of affairs in the Mallefille Street camp.

When I think of France, I think of Proust, Flaubert, Romain Rolland, the charming tales of Alphonse Daudet, the magnificent painting of Cezanne; I think of Racine and Moliere and Villion, of Aragon, Prevost, Rousseau and Voltaire — and then it occurs to me that N.M.U. too is a Frenchman. And it occurs to me too that it was a Frenchman who said that “When I pay taxes, I buy civilisation”. But perhaps N.M.U. doesn’t want civilisation; perhaps he prefers to do without taxation and have uncivilisation.

The nobles of pre-Revolutionary France lived off the backs of the people. And what happened? Ils cracherent dans le panier. (I must afford N.M.U. the opportunity of again casting aspersions on my ‘cockney’ education). In the anti-taxation campaign, N.M.U. and his supporters have revealed a mentality not far removed from that of the pre-revolutionary feudalism.

Today, of course, one does not cause one’s political and fiscal opponents to “cracher dans le panier”; one treats them to propaganda designed to show up the falsity and hollowness of their case. And the hollowness of N.M.U’s “no income tax” case is immense.

Friday 2nd November 1956

* Published in print edition on 29 March 2019