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Interview: Dominic Frisby – How tax shaped our past and will change our future

Author Dominic Frisby tells Tom Herbert about his new book in which he argues that tax affects every area of our lives and is responsible for many of the biggest problems faced by society today.

2nd Jan 2020
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daylight robbery

There is a tax story somewhere near the heart of almost all of humanity’s defining events, from Mary and Joseph to the moon landings, and over the centuries almost every conceivable item has been subject to taxation, from windows to wigs and from flour to fireplaces.

However, as author and comedian Dominic Frisby lays out in his new book Daylight Robbery: How tax shaped our past and will change our future, the taxation background behind many of these stories are forgotten – often to society’s detriment.

In the book, Frisby, who has covered tax and financial matters before in successful Edinburgh festival shows, argues that many of the problems we face today can be traced back to our system of tax.

So is our system fit for purpose? If not, what can be done? And are taxes the price we pay for a civilised society or merely a form of theft? AccountingWEB caught up with Frisby to discuss these questions and more.

* * *

What drove you to write a book on taxation?

“The aim of the book was to get people thinking and talking about tax, and questioning why we have the systems we have.

There’s never been a civilisation without taxation. Think about how much we study history yet we barely study taxation. It should be a subject at school.

You design a society the way you tax it: a society’s destiny is determined by the way it is taxed – how prosperous or poor, how free or suppressed its people are.

At the moment, the UK is one of the worst offenders in terms of length and unnecessary complexity, but not from the point of view of how much we’re taxed. Government spending – largely funded by taxes and debt (a tax on the future) - is over 40% of GDP. America is a bit below. France is not far off 60%. No wonder the French are rioting.

There are common problems throughout the developed world. Politicians put the focus on policy, not the system itself: the fact the UK doesn’t even have a minister for HMRC speaks volumes.

When writing and researching the book, what did you find that surprised you?

Tax is the story that never stops giving. Once you start looking at the world through the prism of taxation it’s hard to stop. For example, the only reason we were given surnames was for the purposes of levying tax: to distinguish Tom the baker from Tom John’s son from Tom who lives by the hill.

And why do men predominantly have short hair? To fund the Napoleonic Wars, Pitt the Younger introduced hundreds of petty taxes, including one on wig powder. However, there were many who objected to the wars, and, in order to signal their objection, they stopped wearing wigs and wore their hair short, so Pitt couldn’t get their money for his war. Over time the wig tax died a death as a fashion accessory. Pitt’s wig tax changed fashion.

Even the title of the book, the expression ‘daylight robbery’ is thought to come from the window tax, a property levy based on the number of windows in a house. This changed architecture for centuries and defined how cities and buildings looked.

In the book, I use the lines ‘tax is control’ and ‘tax is power’. If a king or a government loses control of the tax base, they lose both.

So is there a solution?

I’m a low tax guy. We’re taxed too much. The last Chancellor who committed to fewer and simpler taxes was Nigel Lawson, who removed a tax with every budget. The code trebled under Gordon Brown, then doubled again under George Osborne, even though he promised to simplify it.

Governments should commit to simpler, lower, flatter taxes, in my opinion. I’m a big believer in a location usage tax – Henry George’s land-value tax - but only to replace other taxes, not in addition to them.

The Mansion tax was a bastardised version of this and it caused Labour no end of problems. Politicians struggle to introduce new taxes in times of peace. You normally need some kind of emergency. Our current rates of income tax are as a result of the two world wars. War breaks out and the rates rise, but when the war dies and the emergency goes away the tax rates never go back to where they were before the emergency.

And finally, what do you see as the future of taxation?

There is a big – but gradual - shift coming, I think. Income tax accounts for around 50% of government revenue in the developed world. The relationship between employer and employee has been easy to tax. But the nature of work is changing. More people are becoming freelancers. There are more gig workers and so on.

Income tax is easy because governments can go straight to employers and deduct at the source. But with more freelancers joining the market (EY says that by 2030, 50% of the US workforce will be freelance) this will become increasingly difficult. Freelancers tend to pay less tax than people in full-time employment doing the same job.

The other big problem is that tax systems were designed around the physical economy. Governments have struggled to tax the globalised, intangible economy – and that’s where all the growth is. As workers themselves get more globalised and digital, particularly as more and more of them are not being paid in their national currency, governments will struggle to regulate and tax workers in the way they were previously able to do. Five or ten years from now it’s going to be a big problem for them."

Daylight Robbery: How Tax Shaped Our Past And Will Change Our Future is out now to buy from Penguin Books (link here) or Amazon (link here), with signed copies available from the author (link here)

Replies (11)

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By bobsto12
03rd Jan 2020 10:19

I don't mind paying tax but what I dont get is where it all goes.
Look around modern towns and all you see is crumbling infrastructure.

Thanks (2)
Replying to bobsto12:
By Michael C Feltham
03rd Jan 2020 11:35

Where it all goes?

Basically, one simple phrase: Government Profligacy!

Social Security is the main spend from gross revenue; with Housing Benefit being a major component. Mainly since successive governments have screwed up the housing market.

Government at all levels, National Central; Regional, County, Local, all believe they can can continually raise taxes yet continually reduce the services they are supposed to be delivering! Any complaint is always met by the same bleating nonsense: "Lack of Resources!"

Now if any commercial activity demanded ever increasing fees, charges etc, yet failed to deliver the goods, then this would be theft, and actionable at law.

Government, however, is fixated upon Golden Goose Syndrome.

Consider this: after World War Two, (Which cost was still being paid for years ahead) in the late 1940s it was decided Britain urgently needed its own independent Nuclear Weapons Capacity; which it achieved in the early 1950s. Shortly afterwards the Sizewell B Nuclear Reactor and power station was built; the FIRST in the World. The came the Korean War; then Suez; then Malaya, Cyprus, Aden etc.

Now, however, in order for Britain to build a new urgently required major electricity generation nuclear facility, we have to go cap in hand to the French to build it and China to fund it!!!

Consider Government Spending expressed as a percentage of GDP from 1950 to today: and weep.

Thanks (2)
Replying to Michael C Feltham:
By ireallyshouldknowthisbut
03rd Jan 2020 12:02

Quick fact check, One of the biggest component of social security spend is not "housing benefit" (about £22bn) but pensions (£160bn)

Housing benefit after all is essentially subsiding low wages paid by big business, and would not be necessary had the nation's council housing been flogged off for a song and an election bribe 30 years ago.

Pensions seem to have highly protected status despite nearly every pensioner I know being pretty well off.

Thanks (1)
Replying to ireallyshouldknowthisbut:
By Michael C Feltham
03rd Jan 2020 13:15

I said major; not the biggest.

Caused by an insane housing market and Government allowing Housing Associations, as supposed "Charities" to become the de-facto social housing providers, but masquerade as charities when they are massive property empires.

Plus private landlords provide the shortfall stock and thus government monies are going straight into their greedy pockets.

Pensions are in supposition already funded; check out the mythical "Fund".

Pensions are a cause celebre, since Government nicked the fund years ago; after sending in tame actuaries who stated it was over-valued! Check this out!

Furthermore, many pensioners are on the breadline: clearly, those you know are not the average type! Why did Gordon Brown introduce Pension Credits?

Have you heard about the "Heat or Eat?" pensioners?

IF successive governments had have so organised the economy to provide real job opportunities and a stable sensible housing market, then most of these problems would have not been there. Instead we have such outrageous nonsense as as Minimum Wage, Zero Hours Contracts and the rest.

Britain, despite the huge tax burden, is clearly a corporate state; not a parliamentary democracy anymore.

Which is why there are so many billionaires and multi-millionaires: a majority of them tax avoiders...

P.S. I am A Capitalist, not a Socialist; but some fair dos are urgently needed...

Thanks (1)
Replying to Michael C Feltham:
By ireallyshouldknowthisbut
03rd Jan 2020 14:38

eh? State pensions are not "funded" they come out of current taxation. Ditto civil service pensions.

Whilst some pensioners might be poor, they are certainly no poorer than the unemployed, and at least not treated like scum. There is a big disconnect between the genuinely broke pensioner (who quite frankly must have been a bit feckless to end up with no pension provision at all), and the affluent ones with 2 * state coming in, plus 2 * occupational pensions, own house, no real outgoings. I see no reason why such pensioner should be so sacred a cow (apart from cynical vote buying) . It used to be a certain about of "reward for winning the war" but now its all baby boomers with entrenched wealth, whilst the younger generation get shafted.

Thanks (0)
Replying to ireallyshouldknowthisbut:
By Michael C Feltham
03rd Jan 2020 17:16

Please read this and think again:

You are making numerous glaring assumptions!

Few women now in their mid-seventies, worked full-time: and furthermore, it was uncommon for women to receive an occupational pension. Indeed, a close friend's wife worked in the City for a major firm of solicitors most of her life, Personal Sec to a senior partner: no pension.

The model of a man and wife having two full state pensions and two occupational pensions is based upon much later.

The State Pension is a lottery and depends when a person was born, mainly, as the rules kept changing.

"...who quite frankly must have been a bit feckless to end up with no pension provision at all"; a very ignorant and callous comment. Years ago, most people earned far less than you imagine. Saving proved impossible.

Your view is based upon a much later period in history. Most married women stayed at home and brought up their kids; rather than working full-time, and leaving the children to become a social problem which costs the State even more...

I agree about Civil Service Pensions: yet once more an excellent example of Government's profligacy and fiscal incompetence: worth remembering how civil servants threatened to strike and Gordon Brown caved, made them a special case and allowed retirement at 60 on full index linked final salary schemes. Disgusting! Local authority retirees are slightly different: no wonder Council Tax is so high, as a big chunk is used to meet the cost of retirement pensions.

Thus these costs do not come out of central governments funds.

Thanks (0)
Replying to Michael C Feltham:
By bobsto12
03rd Jan 2020 19:12

I've always been very suspicious of these housing associations after I went to a job interview at one. I couldn't work out who the directors were accountable to so I asked them at the interview. Cue stony faces and I didn't get the job.

Thanks (1)
By graydjames
03rd Jan 2020 10:51

So called flat tax usually proves to be fundamentally unfair - especially when levied on individuals rather than corporations; it can only be, at best, proportional, is often regressive, and never progressive. It has caused revolt since 1381 and can only ever cause revolt in the future.

Mr Frisby stood for the Brexit Party, I think. Says it all for me.

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By Nefertiti
03rd Jan 2020 12:47

Generally most of the tax collected from citizens was supposed to be used for their benefit. However in the past and more so in the present and future, we are under the thumbs of corrupt, merciless politicians who enjoy a life of luxury at our expense and misuse our taxes for pointless wars, increased defense expenditure, numerous pointless trips abroad etc. - whilst we face increased homelessness, poverty, NHS facilities being drastically reduced every year and crumbling infrastructure all around us.

More and more sophisticated taxes are put into place every year to try and squeeze out each and every penny in taxes from our pockets as the elite continue to maintain their offshore funds and properties, until they get caught - if ever.

No wonder that most people now say that the Great has fallen out of Great Britain.

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JD Portrait
By John Downes
03rd Jan 2020 14:25

You can hear more from Dominic Frisby here;

Deffo worth a listen

Thanks (1)
Dan Heelan
By danheelan
03rd Jan 2020 14:51

Loved this book, recommended it to all my team as a read!

Thanks (1)