Adam Smith's classic Wealth of Nations certainly has something to teach us about taxation (Letters, 29 April). But he did not advocate taxes on spending. He saw them as unfair for the same reasons Ellis Thorpe approves of them: consumption does not always match income; the parsimonious can avoid paying. Worse still, those who live in another country to their source of revenue escape completely.
Smith gives four maxims for sane taxation. It should be as nearly as possible in proportion to ability to pay; payable at the time and place most convenient to the payer. It should not be arbitrary, ie, dependent on subjective estimates of liabilit
y or costly or damaging or vexatious in practice.
It is clear council tax violates three of these criteria. If Smith were alive today he would point out that validation of its costly benefit system would entail intrusive investigations into sleeping arrangements and whether or not there are any savings hidden away.
He would describe its ability to kick a widow out of her marital home as "cruel and oppressive". The rebateless water charge would have outraged him too.
Smith would probably approve of the SNP income tax proposal as fair on one of the three forms of personal revenue he considered, so long as the working class were exempt. Smith argued taxing the wages of those who create wealth through labour is absurd, taxing the salaries of the upper ranks, on the other hand, is an excellent idea as they tend to be independent of market forces.
The pioneer of modern economics is often regarded as the patron saint of capitalism. Read him carefully and you may find a precursor of Karl Marx.
A MURPHY
Learmonth Grove
EdinburghThe full article contains 293 words and appears in The Scotsman newspaper.
