The Magic Money Tree

It's my view that merely cutting taxes or cutting public services ends up costing us all more, not less money. It's an idealistic fool that thinks a country is free to run and the usual business logic is that a bigger company will see bigger economies of scale. Yet, as for government policy, we seem bought into less tax means we have more money in our pocket. But this logic only goes so far, and it assumes that the tax is used for services that we don’t need. Clearly we all need security, health, and access to at least a basic education; all the things that we need to run our daily life. If all these services were not provided via our tax bill we’d still have to fork out in some other way, nothing is free in this life, and often when you have to pay for a service privately, despite competition factors, the costs are more expensive.

Call da Police

In a recent report it was disclosed that the police have stopped investigating low level crimes such as house burglary. http://www.independent.co.uk/news/uk/crime/met-police-spending-cuts-400-million-funding-london-crimes-not-investigated-burglary-assault-a8002746.html This is due to streamlining costs and to allow them to focus on more serious crime, and who can argue with that logic, but ultimately the reason they can't afford to is because government policy has dictated police cuts in favour of trying (at least in theory) to put more money in our pockets.  

So it’s a good example of where cutting budget and tax cuts doesn't always save us money. Because at the same time home Insurance costs are rising.  https://www.moneywise.co.uk/news/2017-02-22/home-insurance-premiums-set-to-soar-2017 It's slightly ironic that part of the reason is a stealth tax on insurance, but underlying this trend is that the Insurance Companies know that crime will not be investigated. If it's not being investigated then crime will rise and there will be more claims, with less likelihood of recovery. Take this one step further and policies will start adding (at a cost) private investigation cover. My point being that we all need to have protection against crime and despite the hard work by the police force if there aren’t enough of them to go around we’ll start seeing cost bubbling up in other ways.

Health, Education and even the rubbish

As a parent of three young children I can see all too clearly the under funding in our schools and hospitals. The result is a less comprehensive service, and the recipe to cook up a future Dystopian society, that will inevitably cost a lot more to correct and stabilise. In schools it's an open secret of suburbia that those parents who can pay for tuition on the quiet will do so to try and sneak their child over the 11+ line, and some schools in London are asking for “optional donations” from all parents just to keep going.  http://www.express.co.uk/news/uk/792031/School-donations-funding-freeze-parents-teachers-union-NASUWT As local and county councils feel the brunt of austerity they are naturally cutting back services that we have all been used to and even with the rubbish, people find themselves having to pay for collections that would previously have been covered. What about the mighty pot hole? For every broken suspension arm, to every burst tyre; these are ultimately unnecessary costs if our roads were properly funded. All of these examples just push costs from our tax bill to our wallet, where of course we end up paying VAT anyway.

So my argument is let's all wake up and save money, and collectively agree to pay for decent services, so that our wallets are a little fuller.

And what does it all cost?

Whilst it's impossible to say with any surety, there are plenty of ways to raise or change taxes so it effects

some more than others, and in my view it should be progressive. The more you earn the more you should pay. But let's keep it simple according to the ONS there are 30 million taxpayers in the UK; if we assume that each of them is on an average income and spent an extra 1% on tax they would spend an extra £13 per month, but that would generate the government an extra 4.8 BILLION pounds. So would you rather pay that money to insurance companies or have a better police force..? 

Money Advice Hub Tip

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