In the early post-war economies, taxation was a tool, not only to bring money into the Exchequer from taxing profits as well as earnings but was also used to dampen consumerism with the inherent balance of payment problems as we bought goods from overseas which we didn't produce ourselves.
The American Republican mantra of small government, and low taxes, where the individual provides wholly for themselves has been the dream of the Tory government since Margaret Thatcher. The concept of "welfare" and using the collective dynamic of society as a whole to support the less fortunate was more a European idea which had always favoured the social responsibility of society towards its citizens.
We as usual sit in large part on the fence of these two ideologies, the American and the European and,caught in the cross steam, we are neither fish nor fowl since, our sense of society was different depending which side of the class spectrum you came.
The Socialist Government in the UK, elected after the war, with the searing memory of the recent depression and the destruction of War, created the Welfare State which, was designed to pay out of general taxation and act compassionately towards people in trouble.
It was intended to cover both economic as well as health and accommodation issues within the nation and, as a humanitarian impulse, has never been bettered.
It's foundation was the contribution we "all" would make through deducting a proportion of our earnings, be they in the form of wages, salaries, investment income such as dividends and the profits from all forms of business enterprise. Taxation fairly applied would bear upon everyone. The concept of a fair society each pulling their weight, each paying according to their ability to pay was for a number of years accepted as the norm.
In the 1970s the politics of Ronald Reagan and the Milton Friedman school of economics was taken and swallowed hook, line and sinker up by Mrs Thatcher and her Chancellor.
The only problem was that the American society, in comparison was dynamic and prospering whilst ours was in decline. Jobs and opportunity in America, at least for some, meant that there was sufficient, well paid work for people to find employment and invest in the dream.
In the UK we were closing industry down at an alarming rate, refusing to modernise and invest we hoped our 'financial enterprise' which historically spread throughout the world would keep on providing the income. But the jobs which kept the ordinary man and women afloat, dried up, and the security blanket which the Attlee Government had put in place was stretched to breaking point.
Underlying the "Friedman economy" is the concept that profits and earnings, belong solely to those who are lucky enough to have work and there is no responsibility for society as a whole to contribute. Mrs Thatcher famously denied that there was such a thing as "society".
Taxation became a dirty word and successive governments have turned away from direct taxation towards indirect taxation such as VAT. The problem with VAT is that it hits, as a proportion of earnings, the poor who still have to pay the same VAT on their purchases as the well off and no account is taken of a persons ability to pay.
There are a number of areas where as a nation and a society we are falling behind when compared to equivalent societies.
For instance funding Health,Education and Housing which we deem vital in calling ourselves a civilised country is now inadequate. The funding can no longer be found in indirect taxation.
As a nation we don't have enough industry or sales to balance the books and as we become more individualistic and selfish, our attitude to others and to society at large begins to loose cohesion.
"Selective Direct Taxation" is in my mind the answer. A tax which is specific and designed to do a job of work. A hypothecated, ring fenced tax, to sort out the underfunding of the NHS for instance. People I am sure would be prepared to contribute a small amount that was transparent in its purpose. Even similarly hypothecated taxes to "build houses" for those who desperately need them and "educate" our children by obtaining a closer approximation to the funds used in Private Education, would benefit the Nation so long as the proceeds of the tax were specifically used to overcome a problem
But direct taxation has been cast as a monster. The media and the politicians have, since the late 70s, demonised the concept of direct taxation as a means for the State to provide the essentials. The gullible public were convinced and bought the idea and we are where we are with the "Front Bench" of the Government, a row of unaffected millionaires cutting more and more of the essentials. Just as we have seen the salaries of the top 2% sky-rocket, the percentage of the tax relative to the amount earned has fallen significantly.
Unencumbered by any relationship towards society these pillars in our society are in effect having a free ride.
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