We get very little say in where our tax money goes. Elections are normally infrequent: when they do come, we are not voting on individual spending programmes but on a whole package of proposals that could include issues as diverse as immigration, schools, healthcare, welfare, unemployment and defense. On such infrequent and confused evidence, the politicians who decide where our money is to be spent cannot have any clear idea of what the public’s priorities really are, and of the depth of feeling that different people have about those priorities. 

But our legislators and officials have priorities of their own. People do not suddenly become angels when they are elected into office or start working for a government agency. Officials want to protect their own budgets, and politicians are inclined to steer resources towards their own supporters. Who really believes that every government decision is made ‘in the public interest’? The more taxpayers’ money that flows through that decision-making process, the more power is given to politicians and officials to indulge their personal and political interests.  

Much public spending actually amounts to vote buying, with grants and subsidies being steered to particular groups that are favoured by the ruling party. Interest groups take full advantage of this, lobbying for special legislative favours for their cause or their industry, often in return for election funding or other inducements. Such favours can be extremely lucrative, perhaps involving tax concessions, subsidies or regulations that make life harder for competitors: so it is not surprising that lobbying is such a big industry. And the higher that tax rates are, the bigger are the potential rewards from getting special tax treatment, and the larger the lobbying industry grows. High taxes, as they say, feed big government rather than hungry children. 

As the H L Mencken put it, “elections are advance auctions for stolen goods”. Interest groups of all sorts are out for the favours that the politicians of a large government are able to grant them. The only group that seems to be under-represented in this carve-up of taxpayer funds is, unfortunately, taxpayers themselves. 

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Eamonn Butler is director of the Adam Smith Institute and author of The Best Book on the Market. In his next piece, he explains why high people so often regard taxes as unjust.