The case against stealth taxes

The term "stealth tax" generally refers to a tax increase that is not announced or made clear to the public. It can also refer to a tax increase that is disguised or hidden in some way.

The most common one is imposed by failing to move thresholds in line with inflation, so more people are sucked into higher tax brackets, even if they’re no better off. But taxes on such things as air flights and insurance raise prices without people necessarily realizing that government is responsible for the increases.

The UK Treasury team likes them because they conceal the true amount of taxes that people pay. They think that if people realized how much tax they are paying, they would scream blue murder. They might be correct to think so, and this might be no bad thing.

There are several reasons why UK stealth taxes fall into the category of bad things.

Lack of transparency: Stealth taxes involve a lack of transparency in government policy. Taxpayers have a right to know how their money is being spent and what taxes they are paying. When taxes are increased without public knowledge or debate, it is neither fair nor democratic.

Burden on taxpayers: Stealth taxes can add to the burden on taxpayers, particularly those on low incomes.

Unpredictability: Stealth taxes can make it difficult for businesses and individuals to plan for the future. If taxes are increased without warning, it can disrupt budgets and investment plans, potentially harming economic growth and stability.

Lack of accountability: Stealth taxes can be used by governments to avoid taking responsibility for unpopular tax increases. By hiding tax increases or making them difficult to understand, governments can avoid public scrutiny and criticism.

Overall, stealth taxes can erode trust in government and undermine the fairness and transparency of the tax system. While some taxes are needed to address national needs, it is important that they are implemented in a transparent and accountable way.

There is a case for setting out two prices for items, the one it would have been without the taxes, and then the one you have to pay once the tax is included. There does not even need to be a law about this because businesses could start doing this voluntarily, egged on, perhaps, by a pressure group dedicated to bringing this about. The Treasury would scream blue murder, but it would act as a restraint on their rapacity.