15

There are 470,000 results on Google Search for "owned by taxpayers". Some excerpts:

RBS remains 62% owned by taxpayers after a 45 billion pound bailout in the 2008 financial crisis.

(Reuters)

Maternity hospital 'will be owned by taxpayers'.

(The Times)

In 2015, 85% of Greece’s debt will be owned by European taxpayers.

(Elena Panaritis)

I can understand how something can be the property of a government, but how does "owned by taxpayers" work? How does this ownership model make a distinction between citizens who pay taxes vs. those who don't (maybe they are dependent without their own income, or operate primarily in the informal economy)? Does it mean that citizens who pay more taxes own a larger share than those who pay less taxes?

6
  • 9
    To a very good approximation, there are no non-taxpayers older than around eight in the UK. Everyone pays VAT.
    – Mike Scott
    Nov 23 '20 at 19:28
  • 1
    @MikeScott If someone has no income but is a dependent in a household, they are not spending their own money but only another person's money. That means that they are not paying VAT.
    – gerrit
    Nov 23 '20 at 20:27
  • @MikeScott There are however plenty of non-net taxpayers (people who pay less tax than they receive in government funded benefits), arguably a more relevant measure than simply the absolute amount of tax that is paid.
    – JBentley
    Nov 24 '20 at 10:20
  • 8
    @gerrit If you give someone money, that makes it their money, not your money that they’re spending on your behalf. Just the same as when your employer gives you money.
    – Mike Scott
    Nov 24 '20 at 12:36
  • @MikeScott The difference is that in a democracy, the taxpayers theoretically have some say in how the money gets used. But when you purchase from a business or give money to a friend, you don't get to tell them what to do with it. OTOH, you also aren't compelled to buy something versus paying taxes.
    – Barmar
    Nov 24 '20 at 16:20
34

I'm afraid that in all the cases I know of, that is a figurative rather than literal statement. Specifically, in the case of RBS, it is "owned" by NatWest group (as subsidiary company) which is majority owned by UK Government Investments which is owned (at arm's length) by Her Majesty's Treasury. The implication writers are making is that government holdings are then owned by the taxpayer, as a principle source of funding. This isn't true in any legal sense, although since any of RBS's debt is ultimately underwritten by the Treasury, and governments tend to look after their credit rating, it does impact on likely future tax and spending plans (to a smaller degree than many other things). A key distinction is that it is not "government run", in that there are several walls of insulation between the Natwest Group's day to day management and political decision makers.

16

"Owned by the Taxpayer" is figurative statement based on the idea that anything the government has control of is the property of tax payers as a whole.

It's based on the same logical progression as ideas like Governments wasting "your" money on policy ideas you don't care about. Such as the Tax and Spend your Money headline from Fox during the Democrat Primary season. Or using the phrase Taxpayer Money or Taxpayer's Expense when discussing various payments by the Trump administration.

Whilst the source of these funds is ultimately the taxpayer, there's no direct ownership of the cost by an individual taxpayer and no direct ownership of assets either. Be these private companies that the Government holds a stake in, or public buildings like schools or hospitals.

8

If the 62% share of RBS makes a profit for the government, this ought to mean the government doesn't have to raise as much in taxes, which means taxpayers can pay less (in proportion to the amount they would pay normally), while the non-taxpayers will continue to pay nothing.

Similarly, if the owned item makes a loss, it will be the taxpayers who will ultimately have to pay for those debts.

So while, as the other answers point out, there is not literal ownership by individual taxpayers, government ownership can, in theory, have much the same effect.

3
  • One can even draw an analogy between the division of ownership/control in a company (shareholders vote in directors who decide how to allocate the company's resources) and a government (the electorate vote in politicians who decide how to allocate the treasury's resources). One fundamental difference is that with ownership of a business you can choose to liquidate and get your capital back, but you can't (short of a revolution) "liquidate" the government.
    – JBentley
    Nov 24 '20 at 10:24
  • 1
    It doesn't necassarily mean taxpayers will pay less. There are multiple ways states can react to higher than expected revenues. Reducing taxes is one, but there are many others, including increasing spending, which may affect non-taxpayers just as much as taxpayers.
    – bdsl
    Nov 24 '20 at 12:23
  • 1
    This ignores the reason why a large portion of RBS stock came under government control; it wasn't to provide funds to the Treasury, but to repay the bailout paid to RBS. Nov 25 '20 at 14:43
0

It just means that it's owned by the government. Since the government is supposed to be controlled by the public, we could then say that it's "owned by the public". But in politics, we use other terms to refer to the public, like "taxpayers", so we end up saying that it's "owned by taxpayers".

1
  • This post would benefit from adding further details. Being a one-line post, it may attract downvotes and criticism. Please edit it to add further relevant information — preferably with references to credible sources.
    – bytebuster
    Nov 25 '20 at 15:52

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .