People (especially Brits) conflate provision with the means to pay for a service with providing the service itself. If I am on income support I still buy my food at privately run supermarkets. Why should education and health be different?

Jerome, London,

I think Harriet hits the nail on the head. I'm in the 40% tax bracket and am here through the job I have which was obtained via the higher education route I chose.
Education which was paid for by the state. Education which my mother could never have afforded if she had had to pay in full.

Stephanie Tohill, London, UK

I am in favour of fewer taxes. We are in a perverse situation where every tax cut has to be justified, rather than every pound of tax itself. That said, a number of observations if I may.

Alberto Behar, Oxford,

2) The alleged "social" benefits of education are unclear. If they accrue to individual companies, they pay for them through higher wages, which in turn encourage more schooling. These benefits are private. Research has found very little evidence that the social benefits exceed the private benefits.

Alberto Behar, Oxford,

3) The Laffre curve argument - that cutting taxes actually raises revenue by making people work more and increasing compliance - may have been true, but it is not any more. We're no longer on that side of the curve.

Alberto Behar, Oxford,

Couldn't agree more - was saying exactly same thing 2 days ago. Gov't can't deliver services efficiently:always spending other people's money on other people. Issue (top-up-able) vouchers for education & health insurance, offer safety net for long term disability, & stick to law'n'order & defence.

Mary, London,

I dont want any business expanding into China,that country has an appalling human rights record...i want companies who do not invest inher or Europeheavily taxed,as to ordinary people i want anyone earning less than 10 thous., taken out of tax altogether

Jean, London, England

If society gains then society should contribute to the cost through taxation. Industry benefits from an educated workforce and should contribute to education. Society benefits from a healthy disease-free population and should contribute to healthcare.

Glen, Melbourne, Australia

Mr Whyte is guilty of bad thoughts here. Politicians strive for the political optimum, not the economic optimum.

Optimum taxation is market-driven, with individuals voting for their preferred balance. If the Govt underspends they will get voted out, likewise if they over-tax. Cameron gets this

Simon, London,

And where are your taxes being spent - benefits for babies on run down council estates - human rights for crimminals and immigrants - no wonder so many people are leaving!

H Horse, jersey,

I do not accept that state services funded by tax revenues are incapable of delivering 20% "more" than the same services bought privately. State services *can* be inefficient and bureaucratic, but they do not *have* to be, and, with economies of scale, could outperform their private counterparts.

Paul Schleifer, Chiswick,

The author does apper to overlook the fact that taxes are, to some degree at least, deliberately redistributive of wealth. The trick surely is to provide some succor to the very poor without alienating the wealthy or penalising the middle classes so much that they effectivley join the poor.

Bob, Reading,

I find it very "unclear" thought, a jombie indeed. Raising taxes is not about 20 percent or any other per cent; it is about labelling the society, and providing public services. Of course we all want it to be efficient, but unclear thinking is a "bad thought" indeed.

M A Jabbar, Altrincham, Cheshire

to kay tie,

How about ill educated and unprofesional politicians who claim that, despite no real world knowledge or experience, that they can do a better job for all of us. If this current crop are an example of our education and health systems and public money benefiting the public i am a monkey

alan, london, england

This sounds like an argument for more privatisation. Even if you cut tax by three quarters and told people to provide services for themselves (which is sometimes proposed by the very rich), wages being as diverse as they are, some people will still get very little. Is dog-eat-dog being proposed here

Bob Ericson, Tewkesbury, Glos,

So, some should be poorer to make others richer? Society is measured by the quality of its services; less tax = fewer services; Which services must go? Governments provide a cheap ineffectual service for votes; this is true waste. We won't distribute wealth ourselves because we are greedy.

Gary Mason, St Albans, UK

I find this an excellent article until this line: "Most merely provides people with what they would otherwise buy for themselves, such as education, etc." The poorest in society wouldn't and couldn't buy these themselves, & the result would be more deprivation and social ills.

Jon, London,

Half right. Education and health are often more efficiently paid for by taxes (not that UK organises it well mind you). The problem is that after a certain level of tax (35%?) it becomes hard to collect and starts to seriously skew business and personal incentives, making only accountants rich

Richard, Kingston, UK

"How could commerce operate with illiterate customers?" It seems to do OK, although according to a UN survey 8 years ago 1 in 5 UK adults were functionally illiterate. (It may be worse now). As for medical treatment and education, Mr Whyte explained that his argument doesn't apply to all spending.

Tom Welsh, Basingstoke,

Can someone enlighten me as to the economics and finance credentials of Mr Brown and Mr Darling?

Thats right. Zilch.

Its time we had an overhaul of our political system. We need economists in charge of the economy, not some monobrow dude who was previously the transport minister.

Pete, Cov,

The UK Civil Service hides countless thousands of high paid individuals who know full well they make no contribution to the economy. However, they are there because there is no long term investment in competitive industry by the "City" leading to better jobs for them to turn to for their success. The problem is not taxation, but lack of investment to create prosperity. When we were truely prosperous, Civil Servents were relatively low paid and theirs was an unattractive occupation. Today, the opposite applies. The best jobs are with government not private industry.

Chris Coles, Medstead, Alton, United Kingdom

Your school example is slightly wrong, you neglect that the private school also has a cost of capital, bank charges, managing fees etc. The difference therefore isn't as great as you imply.
In fact the private school could have a cash cost greater than government - in theory.. ;)

JonB, Manchester, UK

Whyte is wrong to suggest that the status of public services is politically sacred. It may be so, but only within the Westminster parties -- those who relish the control over people's lives that it affords them. The UK Libertarian Party has a far more healthy respect for individuals and our economy.

Patrick Vessey, Gainsborough,

I have similar administrative costs doubts about means tested benifits. Might not free dentistry/eyetests/prescriptions for everyone prove cheaper than the paperwork and bureaucracy entailed in judging who is 'entitled' and policing fraud?

Eric Skelton, Cardiff, Wales

Asking people to pay privately for services such as health imposes enormous admin costs, as anyone in the USA can tell you.

And if the labourers in Mr Whyte's example had to pay privately for their own healthcare and education, they would not still be prepared to work for £8 per hour.

archi, aberdeen,

Always enjoy reading Mr Whyte's clear thinking.He knows it makes sense, we know a lower tax base would promote work and wealth, but it's an idea before it's time.A solution that dare not speak it's name.
The Labour idea of, if it does not work throw money at it, is part of a national mindset.

robert everitt, wolverhampton,

Management consultants say that, if you can't measure it, you can't manage it. This government buys a lot of expensive advice, but few ministers have any grasp of business. If the cost of measuring is too high - and the "targets" are badly chosen - this simply puts a brake on effective execution.

Chris King, Fleet, Hampshire

check out the income tax bands for the UK relative to the US and you will get a clear indication of how ripped off this country is getting

Alex, London, England

Very good argument. However, there was a time when public sector wages were lower than private sector, plus the government is able to borrow money more cheaply than the private sector.

Arnold Ward, Weybridge, Surrey, UK

"Plus, it is in the national interest (and it earns money for them in the long run) to have a well educated, healthy population."

When will we get one ?

TomTom, Leeds, England

Many studies show that govts need about $1.30 in tax for each $1 of delivered services. If the govt cuts $1300 in tax and $1000 in services, and you find a more efficient private supplier, you're streets ahead. And govts are far less efficient than suppliers in a competitive market. Ex-public servnt

Faustino, Brisbane, Australia

The author also overlooked the Laffer Curve (named after Arthur Laffer), who proved that when you cut tax rates the receipts actually grow larger.

You can't tax your way to prosperity, either...

Dan Schwartz, Sayreville, NJ, US of A

Good to hear some common sense, Mr. Whyte. What kind of insane people want to hand over half their income to the government for it to waste, so that they can queue for dirty hospitals and starve in old age?

Roger, Ipswich,

Rule of thumb, the more money the government extort, the more they have to squander on senseless, politically driven projects. If you can't avoid payment, at least you can make it more difficult and expensive for them to collect. Responding to time-wasting enquiries, for example.

Andrew Milner, Karuizawa, Japan

...and puts in mind of a Churchill quote (something like) "A nation can no more tax itself to prosperity than a man can lift himself up by standing in a bucket and pulling on the handle"

Dr Peter Harvey, Malvern,

A good point, but perhaps taken too far? The UK is clearly taxed too much, but there is sound economic reasoning for acceptable spending on health, education etc. It's the government campaigns and legislation telling me I smoke too much or drink too much that I'm sick of paying for.

James Torrance, Nottingham,

The first 3 posters don't seem to understand the point at all. Excessive taxation is a huge drag on the productive sectors of the economy, whether it be individuals or companies. There are many services that the private sector could do far more effectively at a lesser cost to the public.

Robert L. Gaskin, Vancouver, USA

But education isn't simply something that you'd buy yourself: lots of people couldn't afford it, yet there are huge societal benefits to having a population that can universally read and write. How could commerce operate with illiterate customers?

Kay Tie, York, UK

Many ill people have longterm, chronic conditions that are too expensive to pay for and impossible to insure. Most parents cannot afford to pay school fees. Most people have debts, meaning there is very little economic point paying into a pension scheme. The solution isn't as easy as you imply.

Malcolm McLean, Bradford, UK

Oh, for goodness's sake! This argument misses the whole point of taxation - that in a free market economy, not everyone can afford to pay for their own public services. Plus, it is in the national interest (and it earns money for them in the long run) to have a well educated, healthy population.

Harriet, Cambridge,