The state should let us know the true extent of what it taxes us

Some very clever Tories have talked themselves into a very silly corner on tax cuts. They think the party is a victim of its own success: increases to the personal allowance have taken so many people out of income tax – 43 per cent of adults don’t pay it, according to the Institute for Fiscal Studies (IFS) – that a tax-cutting agenda would have little electoral appeal. Why vote for lower taxes, they wonder, if you don’t pay taxes anyway?

It isn’t a very logical view: are they suggesting that the tax burden on the poorest will need to rise so that those same voters can support reducing that burden? It is also perfectly rational to dislike a tax even if you don’t pay it.

Inheritance tax is not levied on many estates and yet is overwhelmingly unpopular because it is unfair. And you are unlikely to stay stuck on the same income throughout your life anyway. That IFS study, for example, found that a quarter of those in the top one per cent of earners in a given year will not be there in the next.

In any case, it is a fallacy that lower earners are lightly taxed. There is National Insurance (income tax by another name). Then there are the endless levies that are imposed regardless of income, from council tax to VAT. Not to mention the whole gamut of optional “charges” that are increasingly impossible to avoid – everything from garden waste

collection fees to the cost of hospital car parking.

Many of them are convenient little revenue-raisers either because they only affect narrow groups of people at specific times or they are collected by stealth. Air passenger duty is one of the exceptions: it is shocking, when you buy a plane ticket, to see the price breakdown showing that invariably over half is accounted for by tax.

Elsewhere, the burden is hidden in the shadows. VAT on general goods and duties on alcohol are wrapped into the price displayed on the shelves, so many people do not notice just how much more expensive the Government makes their shopping. In other countries, shops show the pre-tax price instead.

I have argued previously that pay-as-you-earn tax collection should be scrapped: it is no coincidence that those who do tax returns tend to have a more acute understanding of the true scale of the burden given that they must carve their payment to HMRC out of money that has already sat happily in their bank account. Sunlight could be a similar disinfectant for the superstructure of stealth charges and indirect levies that follow us around our daily lives and yet are barely mentioned in public debate.

Taxpayers receive an annual personalised summary from HMRC, showing how much they have paid in National Insurance contributions and income tax. Surely it is not beyond the wit of the taxman to include an indicative summary of what someone on your income level is also likely to have paid in other charges?

Yes, it would be imperfect. But we have a right to know the total cost of the state.

VAT on general goods is wrapped into the price displayed on the shelves, so many do not notice just how much more expensive the Government makes their shopping