Letter: A good way to tax

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Sir: You should not be so swift to dismiss hypothecated taxation as "superficial" (leading article, 9 June).

The linking of specific forms of taxation and the benefits they pay for, such as congestion charges and road charges, can be an excellent way of softening the blow of paying tax. The Road Fund Licence is itself a hypothecated tax - as is the BBC licence fee, and even the National Insurance contribution.

In a world where electors refuse to vote for political parties which put up income tax, and yet demand extra spending on public services, linking specific charges and taxes to clear benefits is one way of slicing the Gordian knot. If linked to local referenda and citizens' juries, hypothecation can give real power to communities to take decisions about how their money is spent - taking the decision-making away from the men in Whitehall, and giving it to the taxpayers. That is why Treasury officials are so opposed to it.


London W6