Given that the government has just spent everything everyone has and more much talk about new sources of taxation in the future. We ourselves would suggest that given everything has been spent already that we cut future expenditure to make the sums balance. That doesn’t satisfy those who would have more and yet more done centrally and by force rather than by that fructification in the pockets of the populace thing.

One of those suggestions is wealth taxation. At which point a basic observation about tax itself. We should always prefer that largely similar things are taxed in largely the same manner. This significantly reduces the distortion caused by the taxation. This rule goes into abeyance when the distortion is the thing desired by the taxation - Pigou Taxes for example. But as a general rule, income should be taxed as income, wealth - if wealth is to be taxed at all, something we deny - as wealth, consumption as consumption and so on.

Which is where we’re certain that any wealth taxation plans are going to fail the economic test. For it isn’t, is it, going to be true that the capital value of the public servant’s pension pot is going to be taxed at the same rate as private pensions savings. Nor will either be taxed at the rate of the equity in a small commercial building or buy to let property.

How do we know this? Because they’re not taxed equally now. The limitation on the size of the pension pot bites much more deeply into that private, funded, pension that it does the public sector one as a result of the casuistic method of calculating the capital value of that public sector pension. And recent changes have indeed meant that property income is taxed more highly than many other forms.

As above we’re against taxing wealth and we’re also against increasing the general level of taxation - it’s already at an historic high as a percentage of GDP. But whether or not we get our way here is one thing. That whatever the new taxation system is must be a level playing field is an absolute. And that’s exactly the thing we don’t imagine will happen.

Actually, we’re really pretty certain that if public sector pensions had to carry the taxation of any other form of wealth then wealth taxation wouldn’t happen. Which is another reason for insisting upon that level playing field of course.

But our question. Why shouldn’t those public sector pensions be taxed like other forms of wealth?