Reframing Tax

Will the New York Times revelations around Donald Trump’s tiny tax payments make any significant difference to the US Presidential Election campaign?  I can’t say, although it is perhaps obvious that they’d have a bit more traction with some voters in ‘fly over’ States if they’d been surfaced by a less Democrat and metropolitan publication.  But the extent to which they do will partly depend on what people think of taxes: are they a good thing or not?  In other words, how they are framed.

‘Going forward’ this communications issue still applies to very many campaigns whose objectives depend upon raising and spending public money.

For this reason I’m republishing an essay that first appeared in Campaign Strategy Newsletter back in 2008.  It was written in the immediate outwash of the 2008 financial crash but in most countries, the argument for re-framing tax still applies in the climate and covid-challenged world of today.

(you can sign up to the Newsletter here)


Campaign Strategy Newsletter No 47, December 2008 Re-Framing Tax: Why It’s A Strategic Target For Campaigners

 

Tax is a bad thing. That is the conventional dominant frame now used by politicians, media and the public. Or at best it is a necessary evil, a constraint on our aspirations, a corrective to our instincts, a burden which must be shared, and so on. Framing maestro George Lakoff uses tax as the most obvious example of the power of a ‘frame’ in his elegant little essay “Simple Framing” [1].

Investment, in contrast, is a ‘good thing’, and so although you could be talking about the same policy issue (eg public spending on education), it can be approached from two directions with opposite results. Moreinvestmentisgenerallybetter. Startadiscussionfromthereandmorespendingisthelikely result. More tax is bad so start from there and the conclusion is likely to be less spending.

This presents a problem for political communicators, governments and, I’d argue, campaign groups, for we need tax. We therefore need a new and more positive way to talk about tax. While this has always been the case, the new American political conviction that we need more, different and bigger government intervention, means there is not only a need for tax but at least temporarily, an almost open field in which to develop a new ‘narrative’ about tax.

We Need Tax But …

Much is in flux and it’s unclear how our societies will change as a result of recession but one thing is certain, if we emerge from it with democratic economies intact, then after the borrowing and the short term tax cuts, taxes will be needed to pay the bill.

Right now most UK, US and many other politicians who have spent decades immersed in a liberal free- market economic political ‘reality’ in which tax was demonised, are still suffering something like Post- Capitalist Collapse Trauma. While they no longer simply espouse the ‘free market’ as the preferred solution to everything, their conceptual and communications locker is pretty empty.

Their instinct too, will be to tiptoe around tax and migrate us to new or more taxes by stealth or fine graduations, avoiding sharp movements that may attract attention, burying ‘bad news’ in the feel good of public holidays and so on. This is unlikely to work – governments are in a classic strategy trap [2] where they had economies that were, once you ignored externalities like climate change and a few other problems, generally seen to be ‘working’. Now they don’t have that and they need to disengage from that model and rebuild a revised economy. But to migrate to that place, they need to traverse uncomfortable territory of dysfunction. Far better, on that journey, to have a positive vision of what that will be like, and to have the communications tools to do so. Tax needs to be seen as part of the solution and a doorway to benefits [3], not as the problem.

The Case For Tax

Try these what-if tests of tax. What if we were in a situation where we need massive public investment to rebuild our economies in a more sustainable fashion? What if the track record of private investment is that it can backfill, and run infrastructure once it is there but that major public spending is necessary for societies to revise their infrastructure – for example putting in place new electric grids suitable for distributed generation? What if we need to invest now for future generations? What if public borrowing cannot go on forever – in the end we need to pay for investment from our taxes?

What if without tax, and in particular a ‘high’ level of taxation, we cannot build societies which are equitable and just, as well as ‘green’? What if sustained tax and public expenditure is an essential ingredient in establishing the sorts of societies that people, like the economic refugees crossing to Europe from North Africa, are prepared to risk dying trying to get into?

What if the market will never deal effectively with protecting public goods such as the environment because of dynamics such as the ‘tyranny of small choices’, the practical impossibility of commodifying or monetizing environmental externalities, and the tragedy of the commons?

Or what if, like the British Liberal Democrats and perhaps now the British Labour Party, you want to raise taxes on the rich and lessen those on the poor?

Or what if none of the above is true but you are a fiscal conservative who wants to adopt progressive policies, perhaps like Obama’s Peter Orszag, who will head his Office of Management and Budget? You might still need to raise some taxes, maybe on pollution, while reducing others.

Or what if you run a campaigning organisation concerned with raising an issue as a public priority but you don’t want to end up having to raise the necessary funds from an altruistic few? What if it can only be solved by, say, public investment in medical drugs or education?

For all sorts of reasons there is a case for tax. Yet with only negative frames available to talk about tax, political platforms are constructed in ways which either demonize tax or dance around it as the subject- which-must-not-be-named for fear of being labelled a ‘high tax party’. This is not conducive to good democracy or good governance. So how could tax be re-framed?

Contributors

Let’s start with the heroes of the piece: those who pay tax. Given freely, voluntarily, their sacrifice resonates with a host of positive frames. They help build communities, they invest in our children, they care for each other and care for the carers. They pay for our defence. They aid the poor and protect the weak.

Without tax payers there would be no public schools, hospitals, roads or armies, no public broadcasting, no judiciary, nowhere for the elected representatives to meet, and precious few railways, roads or water treatment systems, not to mention overseas aid budgets, bail outs of banks, help to mortgage owners or an Apollo Programme for renewable energy.

So why not talk about these people in more positive terms? Not ‘tax-payers’ as if they are fined, implying bad behaviour or other victim hood, but contributors, the funders and builders of our society.

Such language would make the issue with tax evasion and avoidance much easier to talk about, and for politicianstodosomethingabout. IntheUKthe‘non-dom’issuehasattractedspasmodicattention because it attaches to Gordon Brown and questions over his strategic economic judgement. But the real gain to be made is not an enhanced ability to demonize the ‘stateless’ super-rich who manage to avoid tax almost altogether but to help create a new politics of sustainability built on more of a common sense of purpose.

“a new interest group made up of the willing taxpayers …“

During the last few decades in which tax was a government function to be ashamed of, only a few super- richemergedastaxchampions. In2007TheTimesreported[4]howsuper-investorWarrenBuffetsaw the subject:

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

This ‘narrative’ chimes with the basic message of practically every health, development or justice cause group in the world, and tax is one element in operationalising that thought. Buffet drew his inspiration partly from Nicholas Ferguson, the head of SVG Capital, investors in private equity firms, who said in June2007thatitwasunfairthatprivateequitypartnerspaidlesstaxthantheircleaners. Taxbreaks, said Ferguson, had been introduced “not to make private equity executives very rich but to encourage investment and entrepreneurship”.

Others from the very rich have made the case for being taxed before Buffet and Ferguson. In 2000 Thomas Mann of the Brookings Institution pointed out that Warren Buffet, George Soros and William Gates Sr had campaigned against the Bush Administration’s proposed repeal of estate tax. Here’s some of what he wrote in an op-ed in USA Today [5] in a piece entitled ‘Taxes: Most Pay With Pride’:

“you [Soros et al] have given me cover to float an idea that surely escaped the architects of the Bush tax cut and its Capitol Hill supporters: What’s really needed is a new interest group made up of the willing taxpayers of America.

I know all the reasons it’s a silly idea. Our libertarian, anti-government streak. The dreaded IRS and tax day. The California tax revolt that propelled Ronald Reagan to the presidency. George Bush Sr.’s banishment for not keeping his “no new taxes” promise.

Americans don’t like paying any more taxes than they have to, and they certainly resent it when some don’t pay their fair share. But there’s a deeper reality that gets lost in the scramble to distribute the budget surplus.

Not only are most Americans of ordinary means unexcited about a tax cut, but they willingly pay their taxes — and derive some satisfaction from doing so. Cutting taxes may bind together Republican activists of varying ideological hues, but paying taxes is how we as a people foster the public goods that contribute to our individual and collective well-being”

Who are the heroes then? I searched Google in vain to find out who are the biggest individual contributors to our tax income in the UK or the highest proportionate contributor. I couldn’t find anything although it is easy to find lists of the top 1000 richest – which is perhaps indicative of the problem.

There are a host of simple ways in which this tide could be turned in a new direction. Tax contributors could be sent a thank you for, example, or a certificate to display. HMRC (UK tax) envelopes could be colour coded so that the postman or woman would know what scale of contributor he or she was delivering to … and so on. Instead of a tax ‘demand’ government might send you your contribution calculation. Financial rewards would be – well, counter-productive – but the full panoply of psychological rewards, incentives and heuristics could be deployed to establish being a contributor as a good thing.

I’ll leave those of you who think about values to ponder how this could be played out around the map of Values Modes [6]. Presidents and Prime Ministers could invite high contributors to receptions – the Queen (where does she fit in?) might have them to a Garden Party based on cumulative contributions? Accountancy or a career in the Inland Revenue could take on a whole new friendlier tone.

It is not hard to put this issue into domestic terms.

In  2008, Nigel Farndale [7] wrote in the right-wing Daily Telegraph:

“Taxes are the glue that holds society together. The high water mark of civilisation. Cicero called them the sinews of the state.

Without taxes there would be no education for all, no health care from cradle to grave, no armed forces to defend us.

Yet canvass your friends and colleagues and it becomes apparent that there are taxes and there are taxes. There is a general assumption that we should be allowed to pick and choose which we pay. When I point out that I prefer to pay VAT to builders, friends look at me as if I am eccentric, and possibly a little perverted.

There seems to be no taboo about not paying VAT these days, no sense of having crossed a moral line. In a conspiracy of silence and petty crime, the customer nudges and winks, and then heads off to the cashpoint. Yet think what it is doing. Either you believe in taxes/society/civilisation or you don’t. If you do, and you try and get out of paying VAT, then you are a hypocrite.

… You might well disagree with how governments spend taxes and what levels they set taxation at, but those are separate issues. They are what elections are for.

… you are breaking the law if you use the black economy. Why do we resent lawbreakers of every other kind but chuckle indulgently when someone tells you they managed to get out of paying VAT?

Like taxes, laws are a good thing. They are the opposite of anarchy. Again, if you don’t like them, elect a government that will legislate in a way you do like. Until then, pay your taxes with joy in your heart. It’s not a perfect system, but it does work”

The Great Rethink occasioned by the Recession may make such a move easier or simply more necessary. Not only do we need to encourage more productive, less risky use of money and public investment with long term benefits but the fact that in countries like the US and UK a disproportionate majority of taxes are paid by the ‘middleincomes’ rather than the rich, maybe causing a new dynamic all of its own. This could be brought to a head by growing joblessness amongst the educated ‘middle classes’ (ie aspiring professionals).

In an article [8] in the 1 December New Statesman Iain Macwhirter noted:

“The new global economy is beginning to erode class differentiation and has left many middle-income earners exposed to the kinds of insecurities that formerly afflicted only lower-class workers”

Macwhirter points to ‘a remarkable forecast’ by a UK Ministry of Defence Think Tank in 2007:

“the world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest”

As Macwhirter says, Britain has an indebted, educated, and now increasingly unemployed generation of under 35s who ‘look to the state for security, but the state may not be able to deliver’. If that State is to deliver, and if they are to see virtue in being part of that capability, the idea of good tax would be a good idea.

Non-Contributors and Non-Combatants

In the war on climate change, most non-contributors are equivalent to non-combatants.

The same can be said of any pursuit of major public goods.

Re-framing tax as solution building and tax payers as contributors would enable governments and society to depict non-contributors as non-combatants. Rhetoricyesbutnotspinasithasanunderlyingtruth. Perhapsthetimehascometodeploysuch rhetoric to counter that which says that any wealth creation, however extreme and however non- contributing, somehow is justified by trickle down from the invisible hand ?

In his book Who Runs Britain? [9], BBC Business Editor Robert Peston discusses the super-rich and their political influence but it is their attitude to contributing to society through tax which is the point here. These people have been promoted as role-models. Peston writes:

“Many of the super-rich actually feel it is their moral duty not to pay tax. This is not malicious hearsay. I know these guys pretty well, and they regularly moan about paying any tax. But whatever you think about the waste and inefficiency of public services … my strong conviction is that no one should use a club’s facilities who is not prepared to pay the subscription fee. Here’s the point. Any particularly wealthy individual may have used state schools and hospitals while growing up. Or their employees may still use them. And their ability to generate wealth today depends in large part on the stability of the state and expensive physical infrastructure. All of which costs money …”

Perhaps instead of just advocating what governments should do in terms of delivery objectives – be it providing drugs for HIV AIDS, the terms of aid or investing in renewable energy or education – NGO campaigners should utilise their political advocacy networks to help reframe the tax that is needed to createthewherewithalforgovernmentspending. Ashasbeensaidathousandtimes,NGOslack political power but they and their brands have great moral authority. It’s time to deploy a bit of that influence to help reframe tax.

[1] http://www.rockridgeinstitute.org/projects/strategic/simple_framing/

Lakoff writes:

On the day that George W. Bush took office, the words tax relief started appearing in White House communiqués to the press and in official speeches and reports by conservatives. Let us look in detail at the framing evoked by this term.

The word relief evokes a frame in which there is a blameless Afflicted Person who we identify with and who has some Affliction, some pain or harm that is imposed by some external Cause-of-pain. Relief is the taking away of the pain or harm, and it is brought about by some Reliever-of-pain.

The Relief frame is an instance of a more general Rescue scenario, in which there a Hero (The Reliever-of- pain), a Victim (the Afflicted), a Crime (the Affliction), A Villain (the Cause-of-affliction), and a Rescue (the Pain Relief). The Hero is inherently good, the Villain is evil, and the Victim after the Rescue owes gratitude to the Hero.

The term tax relief evokes all of this and more. Taxes, in this phrase, are the Affliction (the Crime), proponents of taxes are the Causes-of Affliction (the Villains), the taxpayer is the Afflicted Victim, and the proponents of “tax relief” are the Heroes who deserve the taxpayers’ gratitude.

Every time the phrase tax relief is used and heard or read by millions of people, the more this view of taxation as an affliction and conservatives as heroes gets reinforced.

[2] See for example Kelly’s discussion of company ‘fitness’ and the work of MIT economist James Utterback, chapter 6 in New Rules For The New Economy, Kevin Kelly, Fourth Estate, London 1998

[3] I mean benefits for society not social security[4] http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

[5] http://www.usatoday.com/news/opinion/2001-03-01-ncguest2.htm
[6] See Using Values Modes at www.campaignstrategy.org
[7] There’s only one way to pay tax: with joy, Nigel Farndale http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/02/24/do2403.xml

[8] Ian Macwhirter, How safe is your job? NEW STATESMAN Dec 1 2008 pp 16 – 20

[9] Who Runs Britain?, Robert Peston 2008 pub Hodder

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