A few years ago I came across a stack of old newspapers, circa 1921. They chronicled the goings-on in the Norwegian village of Vaga, from where my grandfather hailed. Among wedding announcements, notices of cattle markets and other articles whose relevance was strictly circumscribed by both time and geography, one page grabbed my attention. It listed the top 10 local residents by income and wealth, as declared in that year’s tax return.
I was amused to see that on both criteria, farmer Tor Sandbu – my great-grandfather – appeared in second place, though the distance between him and number one settled him among the comfortable rather than the super-rich.
I do not expect Financial Times readers to care too much about my family history. But given the British brouhaha about whether politicians should make their tax affairs public, my journey into the past may kindle some interest. Indeed, it is amazing what can come from a foul-mouthed exchange in a lift between Boris Johnson and Ken Livingstone. Both of these London mayoral candidates have now released some tax information. David Cameron and Nick Clegg say that they support more disclosure in principle, too. It seems like the Norwegian press were on to something all those years ago.
But the local newspaper’s reporting was not the result of investigative journalism. In 1921, the wealth and income declared in every Norwegian’s tax return were by law in the public domain, as were the amounts of income and wealth taxes that were owed. All it took was the recognition that “human interest” stories are often stories of how others are much better off or much worse off than yourself.
And so it remains today. Although the exact level of access has varied over the decades, today’s Norwegians have the same ability as their great-grandfathers to pursue the rewarding pastime of checking how much the neighbour, or the prime minister, earns and owns. Every year they indulge in this fiscal voyeurism; every year the newspapers exploit it for what it is worth; every year a few very rich people with suspiciously low tax liabilities are outed; and very quickly, life goes back to normal.
I realise that to the British, the unveiling of people’s financial lives ranks slightly above the baring of their anatomy on the scale of indecency. But getting worked up about nakedness – whether of the bodily or the pecuniary kind – is not always a healthy idea. Britons should consider how unproblematic tax publicity is in Norway and in the few other countries that practise it regularly.
Here in the UK, the debate is so far limited to whether senior politicians such as Mr Johnson and members of the cabinet should make their tax affairs public.
I find it hard to see how anyone can object to this – even if one thinks that tax return information is something of the most intimate nature. Politicians hold the power to decide what we should all pay into the nation’s common fund. More than that: they have actively sought that power over us. By doing so, they forfeit any claim to privacy that is incompatible with proper checks on the power they gain.
If we believe in democracy, surely we must demand to know how we are all affected by the policies chosen by politicians. Otherwise, how are we to judge whether they are acting in the common interest or in their own? Or whether they abide by the decisions they impose on the rest of us?
But a principle can be defeated if its consequences are too awful. That’s the best argument for those who worry about politicians’ sudden eagerness to let it all hang out, financially speaking. If this catches on, they fear, it will whet the worst instincts of man. “This will induce the politics of envy,” David Davis, the Conservative backbencher, has warned. His parliamentary colleague Ian Liddell-Grainger goes further: “It is an abominable slope,” he says, implying that it may lead to pressure for all of our tax affairs to be made public, not just those of politicians.
Let me make a radical suggestion. The Scandinavian experience suggests that the bottom of that slippery slope may be a much more comfortable place than Mr Liddell-Grainger fears – and it is certainly an easier place to settle than part way down the hill. If politicians are routinely going to publish their annual returns, it is well worth considering making all taxpayers’ basic tax information public.
There is a democratic argument for this, if not as strong as the one to keep tabs on rulers. It is that it is every citizen’s duty to pay a fair share of the costs of the nation’s common affairs, and it is every citizen’s right to know that this is happening. This – and the thought that it may well encourage compliance – is why the US Congress, in the early days of the income tax, determined that tax lists should be available on request to “any and all persons”, and why some American localities would have people’s tax return information pinned to town hall doors.
But the practical case is stronger. For in the long run, tax publicity is more likely to reduce, not increase, the importance of money and envy in politics. This is partly because publicity would discourage people from tax avoidance that is legal but condemned by public norms, and partly because publicity would change public attitudes to many tax rules when the anomalies they lead to become more visible. One hopes it could create pressure for a simpler, more predictable tax system.
But most of all, it could make people a bit more relaxed about money – even if we’ll never be as “intensely relaxed” as Peter Mandelson once claimed to be about how much the richest earned. After a while, there would be less to find out that we do not know, and less that would be likely to shock. Except, of course, for those features of the tax system that are shocking because they are unjust. But surely that is exactly how it should be.
I will declare an interest: public tax information will of course benefit journalists. But consider the possibility that it might benefit us all, and not cause the sky to fall down once we get used to it. Most importantly of all: it might just give unexpected joys to your great-grandchildren.
The writer is the FT’s economics leader writer
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