U.K. Taxpayers Shown Exactly How Taxes Are Spent

A buzz of complaints consistently stirs up around tax season in the United States. Most of them hailing from taxpayers' disapproval of what is being done with their their hard-earned money or how little their return is for this year.

Perhaps Obama could take a page out the taxes play-book from our neighbors across the pond, England. Starting in 2014, every British taxpayer is to receive a personal statement detailing exactly how his or her taxes are being spent. The goal is to make the tax system easier to understand more clearly.

Many naysayers and conspiracy theorists feel that the money they pay in taxes goes straight into government officials' pockets. With this new system, the British government hopes to prove to its citizens that their money is going in into more ethical places.

Treasury chief George Osborne, a man of true bluntness, is expected to announce today that 20 million taxpayers will receive the annual statements starting in 2014.

“It is quite right that people know how much tax they pay and what it is spent on,” a person familiar with the matter has said.

According to Wall Street Journal:

The statements will set out how much income tax and National Insurance—workers' contribution toward the state-funded health system—each taxpayer contributes. It will also break down the main areas of spending on public services and how much of the taxpayer's contribution goes on each.

An example-statement released by the Treasury (shown below), shows that a person earning £25,000 (around $40,000) a year will have made £10,497 after taxes and paid £5,702 in tax. A pie chart shows how the government actually spent those taxes and indicates that the largest portion totaled £1,901 and went to welfare. Another £993 went to health.

One part of the statement that is sure to upset many citizens is the "interest accrued by the government's debt" which the tax payer must contribute to. In the Treasury's example, this £25,000 earner would pay £363 toward that interest payment.

This new system that the British government plans to enact may ease some of the taxation tension between the government and its citizens, but it could also lead to more scrutiny on what the government is spending the citizens' money on. Regardless of how it is received by the public, it is certainly an ambitious and honest plan.