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If, as Benjamin Franklin declared, nothing in this world is certain but death and taxes, it’s a good idea to use the latter to stave off the former for as long as possible.

The great taxation debates usually boil down to one simple issue: whether money is best deployed by individual households bettering their own lives, or by the state doing what it can to better everyone’s.

Ask the taxpayer and you’ll almost invariably get the answer that the individual knows best.

So as times get tough, government and opposition compete to offer tax cuts of one sort or another, while accusing each other of varying degrees of irresponsibility and muddle-headedness. But it may not be the best way to keep people in productive work.

The need for strong and appropriate public support was underlined by three important documents this week.

First, the Local Government Association issued a study showing where the recession is likely to hit hardest. South Yorkshire, London, Merseyside, Hull, and Birmingham are most at risk, it suggested.

The LGA, unsurprisingly, wants the sub-national review implemented as soon as possible, devolving new powers over economic development to local authorities.

Second, the communities department released a study of local authorities’ use of the power of wellbeing.

It found councils didn’t use this power – to further the social, economic and environmental interests of their communities – as much as they could.

Local government minister John Healey suggested it could be a ‘key tool’ to help towns and cities ride out the recession.

That, though, is the wrong message. The power of wellbeing doesn’t offer the power to raise revenue.

It’s a flaw that will become ever more obvious as local authorities try to act strategically in the face of large-scale unemployment.

Instead of finger-wagging, Mr Healey should have declared his commitment to further devolution of powers and resources.

The third document comes from Get Fair, a campaign backed by charities, church leaders and academics. It demands an Obama-style recovery plan spearheaded by a £3bn income pledge to the poorest.

This is good, but we need something else: to create a culture in which taxation for the benefit of all is regarded as a social contract we willingly enter into.

Without such an attitudinal shift, accompanied by a genuinely participative democracy, taxes will always be seen as the Grim Reaper’s sidekick rather than a shared resource that can hold communities together in times of trouble.

Julian Dobson, editorial director, New Start Online magazine


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