Notes & Queries response - Why do we pay twice as much tax on earned income than on unearned income?
Why do we pay twice as much tax on earned income than on unearned income?
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“You must have been about five,” scoffed Joseph Noakes.
“I'll have you know I was thirteen, and the illegitimate offspring of the incumbent priest at the church of St Genesius the Martyr, and his housekeeper,” said Pimm. “I served the tea and biscuits at the meeting. And, before you ask, I was old enough to know the significance of what was being discussed.”
“I am very surprised they even let you in the room,” said Noakes.
“I was press-ganged into the clergy at an early age, in hindsight as an atonement for the actions of my father's prodigal member.”
“More like a human sacrifice,” murmured John Furniss.
“I knew nothing of it,” said Pimm.
He scratched the white hairs on his man-in-the-moon chin.
“If you look on my birth certificate, you'll see I am down as an orphan, abandoned on the steps of the priest house. The only reason I know otherwise is because, after my father passed away, one of his colleagues who'd had a bit too much to drink, broke the seal of the confessional and spilled the whole story to me. By that time my mother was long gone to breast cancer.”
“And all this happened at St Genesius?” said Aaron Solly.
“Around the corner at St Fiacre's – not in the church itself. In the church hall across the way on Gafmead Row.”
“Not on consecrated ground then?” said Noakes.
“It was chosen as neutral ground – not quite the church, not quite the state – a no-man's land between the two.”
John Chalkley prised a small globular morsel from an exploratory hole that he had made in the side of his pie, just below the pastry lid. Having wiped away some of the gravy and identified it as a baby onion, he popped it into his mouth.
“Your no-man's land is currently the venue for a very lively Tuesday night bingo evening,” he remarked with his mouth full.
“Have you been?” enquired Solly.
“I won a tin of Quality Street – a proper tin, mind – not one of those plastic tubs.”
“Which I expect you duly returned,” said Furniss, dourly.
“The Quality Street were divided among the assembled masses, as were the five loaves and two fishes to the crowds who gathered upon the shores of Galilee,” said Chalkley.
“Getting back to the matter at hand,” said Noakes.
“A portion of the income that a man earns through his earthly labours are taxed by the state,” said Pimm. “The so-called unearned income that he receives passively from any investments or inheritance are, under the current law, regarded as an act of God. A portion of these earnings goes to the church. You will note that God is far less greedy than the treasury.”
“A cynic might say that he was more concerned with preserving a social order where the landed gentry remain landed,” said Furniss.
“Or he may have wanted to take the edge off retirement,” said Chalkley. “The last thing God wants is a stream of angry pensioners turning up at the pearly gates, demanding to know why they died in penury.”
“You should read up on the patch widows,” said Furniss. “They used to sew their husband's war pensions into hidden pockets in their dresses, so the church couldn't take its cut. All of us in this room, with the exception of Redlark, are well within our rights to tear apart the weeds of any woman who we believe is harbouring untaxed income about her person.”
“I'd like to see you try that in my parish,” said Solly. “They'd find you floating face-down in the Thames.”
“There's this tax loophole the government opened,” said Chalkley. “Now they can't close it without an uphill struggle.”
“They wanted to streamline things, so they decided: Any revenue made on consecrated ground can be regarded as unearned income,” said Pimm. “What they failed to do beforehand was carry out a survey of how much consecrated land there is in the UK. It turns out it's a lot more than anyone thought, and not all it is occupied by churches.”
“The Borough of Ogborne,” said Noakes, ponderously shaking his head as if it was a heavy burden for him to carry.
“If you don't mind me asking, what's so special about Ogborne?” enquired Furniss.
“Do you seriously not know?” said Chalkley.
“It takes a few months for the English newspapers to reach my part of Scotland. You'll have to make allowances for my provincial ignorance.”
“The Victorians were going to build a cemetery there,” said Solly. “It would have been absolutely huge. They got so far as consecrating the ground before the project came to a standstill. The railway companies were vying for the same land. Now, all of a sudden, a sizeable part of North London is a pocket tax haven. Businesses are piling in. The government, eager to stem the flow of cash bleeding out of the self-inflicted wound, are attempting to place draconian limitations on the height of any new buildings. Good luck with that. Any town or city in the UK where you have this sudden pincushion effect on the skyline, is a consequence of a long-dead bishop sprinkling some holy water and saying a few words in Latin.”
“My niece has a hair salon in Ogborne,” noted Peter Albey. “She'll be pleased.”
“The government only has to wait until 2025 for the next meeting,” said Noakes. “They can thrash it out then to their heart's content.”
“Is it that soon?” said Furniss. His earlier sombre tone had brightened noticeably.
“Those seventy years just flew by, didn't they?” quipped Chalkley.
“Gordon, have you been invited back to serve the tea and biscuits?” asked Noakes.
“I have not,” confessed Pimm.
“Then you must have performed below expectations the last time around.”
“Where is it being held? Back at St Fiacres?” enquired Solly.
“It is my understanding that the style of the meeting has changed,” said Pimm. “I believe there have been ongoing discussions dating back to 2020. On the actual year there will be a number of formal banquets held at venues around the country. By then all of the paperwork will have been signed behind closed doors.”
“Well, if Gordon hasn't been invited back, there is certainly no hope for any of us,” said Furniss.
“We'll all be retired by then,” said Noakes.
Turing his attention to me, he added: “Redlark, that vegetable lasagne seems to have left you lost for words. What do your river gods ask for in the way of tribute?”
“If you are looking for a suitable gift, they seem to be content with the odd sword cast into a stream, and odd coin tossed down a well,” I said.
I hope this is of help.
“We'll all be retired by then,” said Noakes.
Turing his attention to me, he added: “Redlark, that vegetable lasagne seems to have left you lost for words. What do your river gods ask for in the way of tribute?”
“If you are looking for a suitable gift, they seem to be content with the odd sword cast into a stream, and odd coin tossed down a well,” I said.
I hope this is of help.
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This is my response to a question that appeared on the Notes & Queries page of The Guardian website on the 19th March, 2023.
The Guardian is apparently no longer happy to host my comments on their site, so it is appearing here instead.
This blog is obviously not affiliated with The Guardian. Its reference to a question that appeared in Notes & Queries is presented here under the terms of fair use.
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