Short audio preview

According to Professor Ian Angell of the London School of Economics, we are all doomed. Our politicians are growing ever more corrupt, our institutions are on the brink of collapse and our property is being confiscated, in ever-increasing amounts, to pay for the mistakes of the wasteful. When the fifth horseman of the apocalypse arrives, he'll be wearing a pin-striped suit and carrying a calculator.

Roughly speaking, this is how the motion "All tax is theft," was proposed to the London Business Forum at its annual debate in March 2006.

Around 120 attendees had gathered in the lecture theatre of the London Stock Exchange to be entertained by Angell, a leading futurologist, and Sir Nicholas Montagu, the former chairman of the Inland Revenue. And, thanks to a mixture of piercing insights and outrageous opinions, none left disappointed.

First to the lectern, Angell thundered away with the righteous indignation of a TV evangelist. "A democracy cannot exist as a permanent form of government, it can only exist until a majority of voters discover they can vote themselves largesse out of the public treasury," he said. "Politicians (both the knaves and the naïve) pander to the masses. They say they can conjure up hundreds of thousands of new jobs, for the huge number of soon-to-be-unemployed. What a nerve. Business creates jobs, governments create non-jobs, and pensioners in waiting, all paid for by taxes, and in doing so, they tax real jobs out of existence."

It quickly became clear that Angell didn't reject the idea of taxation entirely. Nevertheless, he felt it could be regarded wholly as theft if it were imposed by a political system that was wholly corrupt. "The 20th Century, the century of the masses, is over," he said. "A degenerate political system, based on manipulating those masses, is over too, but it won't go quietly. Just as in ancient Rome, they hang on by soaking the rich. Hence the wealthy look to escape, taking with them as much of their wealth as possible. And a vicious circle of decline begins."

Angell warned the "drip, drip, drip" of new tax hikes - small enough to seem insignificant or even beneficial - would eventually burst the dam of ethical standards. "Then, instead of setting standards and punishing wrongdoers, the government will be at it themselves," he said. "Cronyism is [already] rampant. Government has been corrupt and corrupting. Strapped for cash, they will steal anything in solid form."

Just when it seemed the professor had run out of polemical smart-bombs, he would suddenly unleash another salvo. For example: "Government is merely legitimate organised crime. And even the mafia doesn't charge 60%. Taxation without representation may be tyranny, but it's a lot cheaper than the alternative. The morality of the common good should not intimidate the wealthy. The common good isn't good, it is merely common."

He also argued that the government was increasingly taxing our time, particularly in terms of business red-tape. "You can forget about computer hackers: government regulations are the ultimate denial-of-service attack on the corporate sector," he said. "It's going to find itself knee-deep in compliance officers."

With no compromise in sight, Montagu had a tough act to follow. However, he also had reason on his side. Stepping up to oppose the motion, he pointed out immediately that Angell's argument implicitly accepted "the institutions we all have to have if we're not just going to be rushing around clawing at each other... What is even more terrifying than what Ian gave us is the prospect of no government."

Montagu won over the audience largely through self-deprecation - poking fun at himself for embodying the most-hated arm of the civil service, even though he is now employed by PricewaterhouseCoopers (PwC), the consultancy. ("What is the difference between a catfish and a tax man?" he asked at one point. "One's a scum-sucking bottom-feeder and the other is a fish.") Dismissing the idea that he now helped PwC to exploit tax loopholes of his own creation, he said: "I have both present and former colleagues here: I don't wish to lose the affection of the one and the money of the other."

Whenever Montagu made a proclamation such as "Tax is the glue of society," it was met with both cheering and booing. However, no one could dispute his argument that "the moment you get any joining in civil society, you get institutions that require funding," and that the fairest way to gather funds for those institutions is via some form of tax.

"I just cannot believe - and to be fair, this was not something Ian was arguing - in the extreme laissez-faire argument that says people should not have to pay taxes but [instead] fund, say, their own health service," he said. "I wouldn't have been a civil servant for 35 years if I didn't take an unashamedly dirigiste view. And I do think there are some circumstances in which... it is for the common good to take a decision that people should have money taken from them to fund what are greater goods for them."

Of course the public sector is wasteful, Montagu acknowledged, but then so is the private sector on occasion. "It's very easy to criticise the public sector but no one has said we can do without it," he pointed out. One way to generate more efficiency, he suggested, would be for the government to mine the data it holds on its citizens in the way that, say, Tesco or Wal-mart do in order to serve their customers more effectively.

The opening arguments were now finished and the debate moved to the floor, with each speaker trying to bolster support for their case in conversation with individual attendees. For Angell, this was an opportunity to remind everyone of the fiscal indiscipline of Gordon Brown: "When I have a budget I know exactly how much I have to spend and I have to work within it," he said. "I don't just say: 'Right, I've overspent and I've wasted, therefore I'll go out and I'll steal it off you to make up the difference.'"

He suggested it could be moral to refuse to pay taxes when governments "embark on lunatic schemes", and cited the EU as an example: "Euro politicians think all businesses are run for their benefit, to pay for schemes that buy them votes," he said. "The EU is just another collectivist disaster waiting to happen; it is the USSR with a 40-year time-lag; it is the EUSSR. What do you get when you mix the British pound with the Euro? The ruble." By 2028, he concluded, the EU will have collapsed altogether: "It's going to be the Third World without the sunshine," he cheerfully predicted.

There was a brief glimmer of agreement on stage when someone raised the question of devolving fiscal duties to local authorities: "There have been some quite cynical manoeuvrings where [new legislation] has been dumped onto the local authorities but no extra money has been given to the local authorities, so therefore they have to raise taxes," Angell commented. "But then of course they government caps them because they've charged too much, and then it just gets silly."

However, the hostilities quickly resumed when another attendee asked whether affluence could really guarantee happiness:

"At the LSE we have a professor who's written a book on happiness but he's one of the most miserable fellows I've ever come across," Angell said.

"You've got the wrong civil servant too, because as a civil servant I was underpaid but I'm perfectly happy," Montagu added.

"I don't believe it's possible to underpay civil servants," came the retort.

Angell maintained his tub-thumping dogma as he delivered a final summation: "The issue is whether you must keep buying your life, dime by dime, from every beggar who might choose to approach you, the issue is whether the need of others is the first mortgage on your life and the moral purpose of your existence, the issue is whether man is to be regarded as a sacrificial animal. I am not a sacrificial animal, and I refuse to comply with a society that can steal off me and give the money to whichever beggar comes along."

Montague conceded that Angell had given the audience some great rhetoric and "fine quotes". However, he added, while "he may be walking on water on the way back... he'll certainly be walking on those council-tax paid pavements as well." Ultimately, Montagu managed to persuade the audience to vote against the motion by reminding them of a quote by Oliver Wendell-Holmes, the US Supreme Court Judge: "Taxes are the price we pay for a civilised society."