Sometimes a metaphor is the best way to describe a complex system. And trust us, the UK taxation landscape is just that: A very complex system.
In essence, there are generally only two ways a government can and does tax it's citizens, residents and visitors.
1. There is something call a "stock" tax - that is the wealth or capital accumulated in the economy and is taxed via systems such as Capital Gains Taxes, Stamp Duties, etc.
2. Then there is the "flow" taxes - these are taxes such as payroll taxes, social security, VAT or sales and usage taxes, etc.
Hence, the metaphor to describe these forms of taxation is that of a fruit bearing tree. If you prune the tree (the capital) occasionally, the tree continues to bear sustained yields of fruit (the flow taxes) to the owner and the treasury. Prune too aggressively, by increasing the stock taxes, and the tree suffers and yields less fruit and the flow taxes suffer and the owner and treasury receives less in these flow taxes.
Our question to the UK government and the Chancellor of the Exchequer is actually as follows:
"Are you taxing or rather pruning the tree for growth, increased yields; or rather are you turning the tree into a Bonsai?"
