ABSTRACT Research in taxation often treats it as a branch of law or economics, but in this thesis I argue that this obscures the fact that tax systems are not based on scientific, techno-rational principles, but are socially constructed phenomena, embodying fundamental, value-based decisions imbricated in power relationships. I demonstrate that throughout history tax systems have reflected the prevailing state form and the dominant power relationships underpinning them and that we are currently living in a neoliberal state, in which societal relations are determined by economic principles. I therefore argue that the UK tax system tends to be utilized to encourage individuals to engage in economic, entrepreneurial activity and are presented as being governed by techno-rational, economic principles, but are, in fact, a rationalizing discourse for the transfer of power from labour to capital and from poorer to wealthier taxpayers. This transformation is underpinned by the exercise of power, but in a neoliberal state power operates in a covert, capillary fashion through assemblages and the construction of knowledge, rather than in an overt, hierarchical fashion. I demonstrate how the contemporary debates relating to tax simplification and the use of general principles rather than detailed rules in tax legislation have been, or might be, used to further entrench neoliberal values in the tax system, but that the failure to achieve significant simplification due to its open and transparent nature demonstrates the limits of power and the more opaque nature of general principles might have more potential for achieving this. However, no power can be absolute and I argue that the increased public interest in and awareness of taxation since 2010, which led to the emergence of UK Uncut, demonstrates that there is always the potential for resistance to a hegemonic discourse, which may lead to the emergence of alternative discourses. ii TABLE OF CONTENTS ABSTRACT ........................................................................................................................................ i ACKNOWLEDGEMENTS .................................................................................................................. v SUMMARY OF ABBREVIATIONS ................................................................................................... vii CHAPTER 1: INTRODUCTION ......................................................................................................... 1 1.1. The Lessons of History ....................................................................................................... 1 1.2. Tax Policy – The Big Choices .............................................................................................. 4 1.3. A Conceptual Framework of Power ................................................................................... 8 1.4. Taxing Questions .............................................................................................................. 13 1.5. Outline of the Thesis ........................................................................................................ 15 CHAPTER 2: GENESIS OF THE THESIS .......................................................................................... 27 CHAPTER 3: THEMES AND CONCEPTS ......................................................................................... 35 3.1. Introduction ..................................................................................................................... 35 3.2. Why and How Governing Regimes Levy Taxation ........................................................... 35 3.3. Power – a Conceptual Framework ................................................................................... 42 3.4. The Evolution of the Neoclassical Paradigm of Taxation ................................................. 56 3.5. Summary .......................................................................................................................... 81 CHAPTER 4: STATE FORMS AND TAXATION ................................................................................ 83 4.1. Introduction ..................................................................................................................... 83 4.2. The Feudal State and Its Decline ...................................................................................... 85 4.3. Taxation in the Liberal State ............................................................................................ 95 4.4. The Rise of Welfarism .................................................................................................... 102 4.5. The Welfare State .......................................................................................................... 111 4.6. Summary ........................................................................................................................ 117 CHAPTER 5: THE NEOLIBERAL STATE ........................................................................................ 119 5.1. Introduction ................................................................................................................... 119 5.2. The Nature of the Neoliberal State ................................................................................ 120 5.3. The Construction of the Economic State ....................................................................... 130 5.4. Summary ........................................................................................................................ 141 CHAPTER 6: TAXATION IN THE NEOLIBERAL STATE .................................................................. 143 6.1. Introduction ................................................................................................................... 143 6.2. Taxation in the Neoliberal State .................................................................................... 144 6.3. Getting People to Work – the Taxation of Labour ......................................................... 148 6.4. Lightening the Load – the Taxation of Capital ............................................................... 167 iii 6.5. The 10p Tax Controversy – the Unmasking of Power .................................................... 180 6.6. Summary ......................................................................................................................... 192 CHAPTER 7: TAX SIMPLIFICATION – THE LIMITS OF POWER ..................................................... 197 7.1. Introduction .................................................................................................................... 197 7.2. Calls for Simplification and Responses to Proposals ...................................................... 198 7.3. Barriers to Simplification ................................................................................................ 207 7.4. Summary ......................................................................................................................... 229 CHAPTER 8: RULES AND PRINCIPLES ......................................................................................... 233 8.1. Introduction .................................................................................................................... 233 8.2. The Nature of Rules and Principles ................................................................................ 235 8.3. Rules and the Operation of Power ................................................................................. 242 8.4. Tax Avoidance and the Construction of Certainty .......................................................... 262 8.5. Principles and Power ...................................................................................................... 272 8.6. Summary ......................................................................................................................... 284 CHAPTER 9: THE SHOOTS OF RESISTANCE................................................................................. 287 9.1. Introduction .................................................................................................................... 287 9.2. Discretion, Accountability and Power ............................................................................ 288 9.3. Troubling Cases ............................................................................................................... 303 9.4. Summary ......................................................................................................................... 322 CHAPTER 10: CONCLUSION ....................................................................................................... 327 10.1. Introduction .................................................................................................................. 327 10.2. Questions Addressed .................................................................................................... 327 10.3. Arguments Advanced ................................................................................................... 329 10.4. Contribution Made ....................................................................................................... 341 BIBLIOGRAPHY ........................................................................................................................... 345 iv ACKNOWLEDGEMENTS I would like to thank the following people for their assistance and support in the writing