Why it’s not OK to avoid tax

I have had an email from a long-term reader about my editor’s letter last week. He is disappointed. He had, he says, hoped that after all the ‘holier-than-thou’ pronouncements from The Times and from Osborne, my leader in Moneyweek would have taken my “more usual” brave tack and “made a stand for the monstrously ripped-off taxpayer”.

He’s irritated that I’m irritated by tax avoidance. He thinks that I should actively support the rights of all taxpayers to do everything they can to stop themselves being taxpayers. He also thinks that – and these are his words – “The elephant in the room is the MONSTROUS mismanagement of the nation’s finances by successive governments, the millions of scroungers, the vast MoD and NHS failed projects, the comedy pensions paid out to civil servants, the staggering interest payments on our vast debts…”

Regular readers will know that we almost entirely agree on this bit. I have used thousands of words here raging against high tax rates; against pointless state spending; against the crowding out of the private sector; against the ludicrous shift of the state into parts of life that have nothing to do with the state; and against the current government’s utter failure to – so far -do anything about it. I have also endlessly written in favour of low taxes, flat taxes, land taxes and, most of all, simple taxes.

But I still can’t agree that it is OK to go to extreme lengths to avoid paying tax. Those who think that it is have several arguments they keep returning to. They say that anything legal is by definition OK, that getting involved in convoluted film and loan schemes is no different to setting up a SIPP with Hargreaves Lansdown and that all thinking people should do all they can to avoid all tax.

In support of this argument they point to the 1929 ruling on tax avoidance and evasion that goes like this: “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.

“The Inland Revenue is not slow – and quite rightly – to take every advantage which is open to it under the taxing statutes for the purpose of depleting the taxpayer’s pocket. And the taxpayer is, in like manner, entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Revenue.”

Their next argument is the one put forward by my reader as above – that the government spends money badly and that we are therefore under no moral obligation to give them any of our money to waste.

These are both utterly absurd arguments. Living in a liberal democracy comes, as ever, with responsibilities and rights. That means that we should all feel obliged to pay the taxes the government we have voted in intends us to pay. If a rich man can reduce his tax bill to a mere 1% of his income, I wonder who he thinks makes up the difference.

If he pays less (and avoidance by individuals now adds up to around £4.5bn a year), who pays more. Me? You? His children via debt repayments? I wonder too why those who refuse to pay tax think it is OK to live in and benefit from an infrastructure and legal system financed by people who mostly earn significantly less than them.

Why would anyone think it is OK for the rich and the powerful, alongside the doctors, the dentists, the editors, the actors and the comedians of the UK to effectively abdicate their responsibilities to society? And what if we all did it? The fact is that knowing that the government wastes money is not the same as agreeing that it is morally reasonable to go to extraordinary lengths to avoid helping to finance it.

The key to thinking about all this is the word “honestly” in the ruling above. If you interpret ‘honest’ as legal, you might think that it does indeed absolve you of all responsibility towards the state and your fellow UK subjects. But if you interpret it in the more traditional way (‘uprightness of disposition’), you would think nothing of the sort. It seems to me that a better guidance as to how one should behave comes from last year’s HMRC report on tax avoidance.

The relevant bit is as follows: “Tax avoidance represents a significant part of the UK tax gap. Unlike evasion, it is not in itself illegal, but it involves using the tax law to get a tax advantage that Parliament never intended. It frequently involves contrived, artificial transactions that serve little or no purpose other than to reduce tax liability. And it enables some taxpayers to gain an unfair advantage, undermining confidence in the tax system.”

The key words? “To get a tax advantage that Parliament never intended.” That’s what makes an Isa different to a film partnership. And what makes it wrong.

Should we cut state spending? Yes. Should we massively simplify our tax system to close all loopholes, take out everything from duty free to VAT-free products and prevent avoidance? Yes. Should we be using our votes to try and make sure that happens? Yes. Should the government stop having a go at tax avoiders while promoting the UK as something of a tax haven? Yes. Should we have a General Anti Avoidance Rule (GAAR) in place? Yes. Is it reasonable to withhold your taxes until that happens? No.

It isn’t much of a step from thinking loans from Jersey, K2 and dodgy film partnerships are OK to being a country in which only 30,000 people declare incomes of over €100,000 to being a failed state. And I don’t imagine that the UK’s tax avoiders want to live in one of those any more than the rest of us do.

164 Responses

  1. 26/06/2012, richard Williams wrote

    The most unacceptable thing about such tax avoidance measures is that they are usually only available to the already rich. I am not sure that there would be a lot of interest from expensive tax advisers in my £5k investment, or from the “dodgy film partnership itself. Which makes it all even less acceptable.

    Lastly, where does this leave non doms (from a moral perspective)?

  2. 26/06/2012, Marquis Cha Cha wrote

    Excellent article.

  3. 26/06/2012, crazy tony wrote

    Its another world isnt it! The argument for a 50% (or perhaps even 40%) tax rate looks very weak, if it is so easily avoided.

    Rather than avoiding tax, i would rather some of these people like Jimmy Carr campaign for lower taxes. It would be more honest.

  4. 26/06/2012, fly fly wrote

    You might want to rename the “Tax Dodge of the Week” segment of the magazine…….

  5. 26/06/2012, Shinsei1967 wrote

    Excellent article.

    One of the most depressing things about recent comments re tax avoidance is that so many who campaign for lower and simpler taxes (both good things I believe) think it right to use aggressive tax avoidance methods to achieve these ends.

    The “it’s legal” claim does sound odd coming from those who would be the first to complain if they were fined for doing 34mph in a 30mph area at 2am and the law didn’t show any sensible “common sense”. Well, Carr’s K2 scheme may have been legal (though we don’t know yet as it may be challenged by HMRC) but it clearly broke the “common sense” rule that income is taxed at 40 or 50%.

  6. 26/06/2012, Max Stirner wrote

    The reality is that every Pound saved from the bureaucratic system can be used productively in the real economy. And that is what really benefits society, not paying taxes. This article shows an enormously naive believe in the state. It reads like the author believes that the state is the society. But that is not what the state is. Frederic Bastiat described the state rightfully as “the great fiction through which everyone endeavours to live at the expense of everyone else.” And that is what we really pay taxes for, to pay of all the special interest groups that have discovered the state as the most effective tool to rob their neighbours. That this is all happening democratically is no argument, but rather a good indicator to question democracy. Useless to say that in this system it is totally naive to believe that the weak will actually benefit. They won’t, it is the strong who win fights.

  7. 26/06/2012, fly fly wrote

    Shinshei – that’s a perfect analogy

  8. 26/06/2012, NeutronWarp9 wrote

    7 – fly fly. A perfect analogy? Very naive, more like.
    My car can go 195 mph de-restricted and has upgraded brakes and a heated rear window. Plus I have been on a track-day induction course. Why should I drive like the Ford or Vauxhall hoi polloi?
    You drive (pay full tax) because you have no choice; whereas I do. If I get caught, I shall buy a new gadget or service to avoid trouble next time.

  9. 26/06/2012, Romford Dave wrote

    Max, I’m confused by the point you’re trying to make, how does avoidance by the few equate to saving a pound from the clutches of the State – the State sets itself an amount to collect and will collect it regardless of K2 and its clones, simply by increasing its take from everyone else.

    It make’s even less sense if the pound that would have gone into the UK treasury is now located off shore, sitting in a foreign bank account and providing absolutely zero activity within the UK economy.

    There’s absolutely nothing wrong in any argument for reducing the intrusion of the State along with the costs that go with it, but not simply to further self interest, something I believe coincided with Bastiat’s opinion too.

  10. 26/06/2012, Mark Johns wrote

    There is only one way to avoid taxes properly: leave and go live in a zero tax jurisdiction. Or does the author consider moving oneself and one’s family to the desert to be immoral as well?

  11. 26/06/2012, Merryn wrote

    @Mark, not at all. If you don’t live here or own property here or use all the services taxpayers provide here of course you don’t have to pay tax here. I don’t think anyone is arguing about that..
    @Max, Of course the state should be slashed again. But suggesting that everyone else should pay your share until you get the state you want is a tiny bit toddlerish don’t you think?
    @flyfly, An excellent point currently under discussion in the office.

  12. 26/06/2012, Max Stirner wrote

    @Romford: no, the government cannot tax people as much as they like. There is a peak of the laffer curve. At some point they will have to cut spending. And we live in a global economy.

    But I think it is also morally justified to defend yourself against these ridiculous tax claims the state has on you these days. After all, someone like Jimmy Carr with his 1% is still paying more money into the pod as most other people. And that is just his income tax. The state also claims 20% VAT of most that he sells. After all there are countless individuals and organisations who shamelessly use the legal system to get taxpayer money. I don’t hear the moral outcry against this. But when someone like Jimmy Carr is trying to keep more of HIS OWN money, then the moral outcry, often from people who make a living on taxpayer money is huge.

  13. 26/06/2012, Max Stirner wrote

    @Merryn: No I don’t think it is toddlerish. It is self defence. The system we have at the moment is set up to be socialist. It cannot work differently and you won’t push it significantly back with reform.

    And believing that a government can just tax you as much as it likes as long as it follows a democratic process is dangerous. In that case you think that democracy should be two wolfs and a lamb voting on what to have for dinner.

  14. 26/06/2012, Shinsei1967 wrote

    @Max

    Your posts are just a collection of silly, inaccurate and undemocratic rants.

    Bureaucracy ? The state spend on bureaucracy is 5-8% of total spending. Much in line with admin spending in any large organisation.

    The government spends about £120bn on pensions. £100bn on salaries for nurses and doctors. £70bn on teachers salaries. This is where the vast majority of tax payers money goes.

    Why do you (or Jimmy Carr) think you should be able to opt out of your civic responsibility to contribute your fair share in line with everyone else.

    Why should you be able to opt out of paying teachers’ salaries or your 80 year old next door neighbour’s state pension ?

    And Carr generates VAT sales on his DVDs. So what ? Selling DVDs is how he makes his living. Why should he be let off income tax. Most people’s job involves generating VAT receipts too.

  15. 26/06/2012, Romford Dave wrote

    The Laffer curve was widely discussed when James Callaghan headed up the Government back in 74 Max, that didn’t stop Dennis Healey uttering his immortal line nor preventing such.

    The two wolves and a lamb analogy is appropriate in highlighting the inevitable demise of any democratically elected authority that panders to its electorates self serving. The wolves destined for a much darker place once starvation takes over as the last of the lamb is devoured, still pondering the meaning of Mathew 5:5

    Lying about the form your income takes is immoral and I suspect will, in due course be shown as illegal.

    Confusing liars cheats and thieves as rebellious insurrection against bad government and misrule is hardly the stuff of folklore, more a route to perdition.

  16. 26/06/2012, Jim C wrote

    I usually enjoy Merryn’s writings. Typically, they show a depth of thought and reasoning rare in financial journalism.

    But in this article she appears to have swallowed Statist propaganda hook line and sinker.

    “Living in a liberal democracy comes, as ever, with responsibilities and rights. That means that we should all feel obliged to pay the taxes the government we have voted in intends us to pay. “

    And why is that? I’m sure if a majority of other people decided to vote for a party that promised to have homosexuals shot, you wouldn’t feel morally outraged by homosexuals who did their best to avoid being shot; so why are we morally obliged to pay whatever tax the state quite arbitrarily decides is the most politically expedient to charge less favoured minorities (in this case, the well-paid)?

    Even at 1%, Jimmy Carr pays far more into the state’s coffers than millions of low-paid people who are actually net beneficiaries of the State’s largesse.

  17. 26/06/2012, Jim C wrote

    Perhaps @Shinsei1967, you can explain exactly how @Max’s points are silly and inaccurate? They’re undemocratic, certainly, but as ‘democracy’ has degenerated into mob rule (whereby the largest minorities simply elect people who will rob others on their behalf) that’s actually a good thing.

  18. 26/06/2012, Ellen wrote

    The people who live in this country are expected to pay for some of the most expensive housing in the world (renting and buying), the level of local tax we pay is unheard of in most countries, and they pay an enormous burnen of direct tax with seemingly very little given in return. This country won’t even pay for their own future doctors! As a result of high levels of tax we have become very uncompetitive.
    And still regulatory bodies and the PM have not finished, wanting to reduce the citizens’ spending power further by devaluing the currency they get paid in.

    When there is good government which represents the interests of its citizens there may be a good case to condemn (legal) tax avoidance. But where government view its citizens as nothing more than cash cows, I fail to have any empathy with the position the PM is taking on ‘moral high ground’.

  19. 26/06/2012, Merryn wrote

    @Jim I don’t think that using extremes to exemplify things in this case is particularly helpful. We aren’t a failed state yet.

  20. 26/06/2012, Jim C wrote

    @Merryn, it just shows what a strange moral universe we inhabit when robbing someone of 50% of their yearly wealth stream – earned through entirely voluntary transactions – isn’t considered extreme. And yes, it is ‘robbing’ – demanding money with menaces for services they haven’t received is robbery, even if it’s euphemised as ‘tax’.

    I don’t see the relevance of the ‘failed state’ comment… though I agree plenty of states ended up that way because their governments attempted to defy economic reality.

  21. 26/06/2012, Jim C wrote

    @Merryn, I think the best way to transcend your moral relativism is actually to think through the ramifications of surrendering your own understanding of right and wrong to the dictates of whomever the largest minority decides to elect.

    In this case, we’re discussing the amount of money the state extracts coercively from people in order to fund its functions. Why you consider this to be different to any other matter – sexual preference in the case of my example of homosexuals being oppressed, for example – goes unexplained. Do you consider all wealth to somehow belong to the State, and that is why it is free to dictate how much individuals are obliged to surrender for services that, in many instances, they themselves will never use?

    You’ve surrendered your moral autonomy, and, given your obvious intelligence, that surprises me.

  22. 26/06/2012, Boris MacDonut wrote

    Merryn. You mean abnegate responsibility. That means renounce. Abdicate is specifically renouncing a throne.
    I dispute that there are “millions of scroungers” or that the NHS has failed given life expectancy of over 80 ,but agree the MOD is too big. The comedy pensions of civil servants are to make up for their comedy pay’s insufficiency.
    The Inland Revenue no longer exists (since 2006) and it is far too timid as regards litigation.
    The tax avoided and evaded in the UK totals well over £30 billion a year leaving the compliant paying an extra £900 each to make up for the Jimmy Carrs. I assume the latter don’t use our roads or other facilities having “opted out”. I also assume they level the same accusation on charities. They don’t give asthe charities spend their money badly…..shameful.

  23. 26/06/2012, Luke wrote

    Ellen @18. Not sure I follow the argument. Housing and rent are expensive (I agree), so we should therefore dodge taxes? How does that follow? Why not tax the hell out of property. (which would probably bring the price down), or build more houses or pay more tax to build more houses…or anything really…

    Then you say we don’t pay to train our doctors. Let’s assume your right. What do you want? More taxes to pay for doctor training?

    Jim c @ 21. You’re outraged that Jimmy Carr has to pay 50% tax. Sorry, but why? (Don’t give me the incentive to work rubbish – economic growth has been slower in the 20 years since Lawson cut taxes to 40% than during the 20yeara before when taxes were at ridiculous levels (see the oracle, Chris Dillow.)

  24. 26/06/2012, Shinsei1967 wrote

    @Jim C

    We live in a democracy. We get to vote for a government to run the country and collectively provide services that we, as a nation, desire. Taxes are set so as to fund these collective services.

    Taxes are quite clearly not theft. And it is ludicrous to suggest that they are. UK taxes aren’t even particularly egregious compared to other similar countries.

    Sure you may wish to have lower taxes but you have a vote in deciding what level of taxes are set.

    Yours are the morals of the selfish (“services they themselves will never use”).

  25. 26/06/2012, Boris MacDonut wrote

    #12 Max. Jimmy Carr does not pay the VAT on his DVD sales, those memebers of the public bonkers enough to buy the rubbish do.
    #21 Jim C . To “rob” someone of 50% of their pay in Tax and Nics requires an income of over £1.8million a year. Your heart bleeds for the wrong people. To rob them of 50% just in tax is impossible given current rates and allowances.

  26. 26/06/2012, Shinsei1967 wrote

    @Ellen:

    Local tax in this country is far lower than the rest of western Europe, America and Japan.

    One of the problems (in my view) of this country’s tax system is that there isn’t enough local accountability between local services and our funding of the councils that supply them.

    Look at your council tax bill. The majority of your council’s revenues are supplied from Whitehall.

  27. 26/06/2012, Boris MacDonut wrote

    In taxman parlance Jimmy Carr has not done what a reasonable man would do. He wants to blame his accountants and advisers, who admittedly are probably devoid of moral gumption, but whom he engaged. It would be reasonable when stashing £750,000 beyond the clutches of HMRC to check both the legality and morality,unless one is a selfish and arrogant twit.
    #24 Luke makes an excellent point. Growth has been slower since the advent of lower taxes and indeed since the advent of light touch regulation. I think simply because it gives carte blanche to the evader in a World where HMRC is held in low esteem and underfunded

  28. 26/06/2012, Shinsei1967 wrote

    @Jim C

    Some of the reasons I described Max Stirner’s post as inaccurate and silly:

    1) “Every pound not given in tax and spent in economy is better for society” (I paraphrase a few sentences).

    Clearly not true. Essential collective services have to be funded as well.

    2) “It reads like the author believes that the state is the society.”

    A wholly woeful misreading in that case.

    3) “Taxes are just to pay off special interest groups”

    No, they are to pay for necessary social provisions that are best provided collectively. Like a police force.

    4) “I don’t hear the moral outcry against this.”

    You’ve never heard any complaints about benefit scroungers ? Never. I simply don’t believe you.

  29. 26/06/2012, Shinsei1967 wrote

    @Boris

    “#24 Luke makes an excellent point. Growth has been slower since the advent of lower taxes and indeed since the advent of light touch regulation.”

    Totally confusing causation and correlation.

    Growth has also been slower ever since the oil price quadrupled in the 70s. Perhaps that has had more of an impact than lower taxes.

    And growth was also higher in days when there was no regulation at all, let alone light touch.

  30. 26/06/2012, Boris MacDonut wrote

    #30 Shinsei. No. There is, and has never been, NO regulation. That is impossible. Better regulation and higher taxes are the recipe for a secure, thriving nation……just look at Scandinavia.

  31. 26/06/2012, Luke wrote

    Shinsei @ 30. I’ll accept the causation and correlation point – my point is that it is not obvious and straightforward that higher taxes are a drag on growth. But oil prices boomed in the 70s when growth was higher than now, so don’t blame it all on oil. As for the regulation point, not sure where you’re coming from. What is the magical “no regulation” point to which you refer? And are you seriously suggesting that growth has been higher in the years since Glass -Seagall was reformed than in the years before? (and I could do the causation/correlation argument on you if it turns out you’re right).

  32. 26/06/2012, Luke wrote

    Max @ 6 and elsewhere. Pardon me for asking, but do you buy your round at the pub?

    Ps, good post, I agree with most, and have enjoyed the comments.

  33. 26/06/2012, Shinsei1967 wrote

    @Boris/Luke

    I wasn’t intending to make a big thing about this as is somewhat off the topic of Merryn’s post.

    I was just pointing out that to make generalisations about decades and ascribe correlations to causations was wrong.

    The 60s and 70s did see higher growth than the 90s and 00s. But as silly to say this was due to higher taxes and regulation as to higher oil prices. It’s evidently more complicated.

    My references to less regulation was to the days when the City was run on a gentleman’s handshake and the BoE governor’s raised eyebrow. This light regulation you refer to would come as a surprise to anyone who had seen the size of an inv bank’s compliance dept and the amount of exams and training courses City personnel have to go through. But as you say there is a difference between good regulation and lots of regulation.

    Nice post #33.

  34. 26/06/2012, Boris Macdonut wrote

    #34 Shinsei. That’s what I wanted to hear. So Thatcher did the UK no good at all and anything we thought she may have contributed was coincidence. Made my day, thanks.

  35. 26/06/2012, Gina wrote

    I think if most people were honest and could legally avoid paying tax they would. That does not make it right. There is a close connection between dodgers and scroungers , although neither would claim to be an associate of the other -they both play a system with success. Do I think it is fair? No.

  36. 26/06/2012, DickyJim wrote

    It comes down to the over used concept of paying your ‘fair’ share.

    Clearly many of those who would be on the hook for 50% of their large incomes do not consider it ‘fair’ that the State should take the nominal figure due. As a 40% PAYE tax payer I do not consider it ‘fair’ that the State takes what it does from me in order to blow a great deal of it on things that I am utterly against but I can do nothing about it. If I were a 50% tax payer I would be even more incensed than I already am because I would be propping up an even greater part of the State that I don’t believe in and if I could legally reduce my absurdly ‘unfair’ tax bill then I most surely would do so.

    I think that the fairness argument is an easy point to score with the millions who basically receive more than they put in, not because they need it, and certainly not because they deserve it, but because they think its an entitlememt! Now that’s not fair.

  37. 26/06/2012, Ellen wrote

    @24 Luke. As you are confused about what I said, let me clarify. One diminishing wage cannot sustain the ever increasing costs of greedier, lazier and less accountable government.

    What do you mean -Let’s assume future doctors will pay for their own qualifications? Both this Tory government and the last Labour one have abdicated all responsibility for ensuring a skilled and professional future workforce. The deserve an ignorant and illiterate workforce.

    The question that needs to be asked if exactly what the government is there for at all?

  38. 26/06/2012, Lance wrote

    People do have a moral obligation to contribute to society. The problem is that the current system is extreme. It expects some to pay 50% tax + social security, whilst others benefit without contributing anything. Tax reform should be implemented whereby people don’t begrudge the rate of tax paid, and alongside that don’t resent the use of aforementioned taxes.

  39. 26/06/2012, DickyJim wrote

    The only fair tax is a flat tax that is introduced on all income over a fairly generous threshold, say £15,000, plus a Sales tax. Do it this way and everybody will pay (well nearly everybody) without complaint.

  40. 26/06/2012, Ellen wrote

    @ 27 Shinsei1967. You really should do your homework before making such sweeping statements.

    France: Local tax 0.2% ratable value with reductions for dependants
    Spain: <1% of the 'cadastral" value - which in turn is roughly 20 times lower than the market value
    Austria ; Local employers tax not residential
    Ireland: Business rates not residential
    Poland: Local tax again mainly levied on local business. Residential taxed very lightly
    I could easily go on and on but you get the gist
    In London Band F family home around £2k pa and Band G £2500 pa which is easily more than twice that of any of the above for the residents, who do not take their living from the locality.

  41. 26/06/2012, Luke wrote

    Here’s an impeccably free market argument as to why Carr and other freeloaders like Phillip Green should pay shedloads of tax. A large part of what the state does is to protect private property from looting (see last summer’s riots). Carr and Green have loads of stuff that others might like to nick. So they should pay more to protect it – see insurance premiums, where the more uoy’ve got, the more it costs to insure.

  42. 26/06/2012, Luke wrote

    Ellen, still puzzled. Sorry.

  43. 26/06/2012, Romford Dave wrote

    Anyone who isn’t outraged by an imposition of a 50% tax rate is beyond reasoning with. Maybe the levels of outrage will rise as more of the 20 percenters swell the ranks of the 40 percenters given the present anticipated trajectory of rank swellers.

    But none of that is relevant to the article which is aimed specifically at why it’s not being ok to avoid tax.

    If you’re not happy with the tax take, there are other options available to you that are perfectly acceptable and that don’t require lying cheating or thieving from every other tax payer.

    No one is that special, despite what your wives, girlfriends or escorts may tell you. There is a long line of people who would be happy to take your place to enjoy such good fortune and pay such tax rates.

  44. 26/06/2012, Max Stirner wrote

    @Shinsei1967: “…to contribute your fair share…”.

    Fairness is a concept that includes mutual agreement. And there is no mutual agreement here. Productive people get ruthlessly exploited to pay for all the unproductive. And the productive are increasingly in the minority.

    The whole thing does not get fair, because of elections. That game is obviously rigged against a minority. So these productive people get asked to not take action on their own, but rather participate in a game, designed in a way so that they cannot win. I find this very cynical. You don’t believe this is true, then explain to me why EVERY democracy produces this socialist result. That is not a coincidence.

    I am afraid there is not enough space her to explain to you, why the state cannot be productive. Please look the economic calculation argument from von Mises.

    BTW, I don’t take part in such tax avoidance schemes. Not because I don’t like them, but because I have a rather poor income.

  45. 27/06/2012, JAW wrote

    Merryn wrote: “Tax avoidance by individuals now adds up to around £4.5bn a year, who pays more. Me? You?”

    The reality may well be that no one is able to avoid tax. Why? How? You may ask. The answer is a bit subtle…

    Take France, for example, the Black Market and tax avoidance is more rife there that in the UK. But the French Government knows this, and says: “We know you are all avoiding tax through the Black Market and false accounting and by various other methods, so to collect those missing tax payments we are raising the tax rates a little higher to compensate, and so we claw back the lost tax. You can play cat and mouse with us, but we are the cat and we catch mice like you by one means or another”.

    Translating this principle back to the UK… tax rates are higher here than they normally should be… precisely to claw back tax avoidance. Probably you don’t realize this is happening. It is a self perpetuating loop.

  46. 27/06/2012, Shinsei1967 wrote

    @Max Stirner:

    “And the productive are increasingly in the minority.”

    The UK population is 62m. 30 million people in work. 11 million retired. 12 million children, teenagers & students.

    The vast majority of the population are, have been or will be productive.

    Your complaint seems to be that the most successfully financially contribute more than they take out of the system. I don’t think anyone would disagree with you. However most people (I think) regard the current arrangement as being fair.

    Now if we had a top rate of 80%, CGT at 50% and a 5% annual wealth tax then you might have a point. But we don’t.

    And if we had a state that consumed 75% of GDP you might have a point. But we don’t. We have an economic system where, until the bank crisis, the state comprised c. 40% of GDP. A level most people thought struck a sensible balance a more dynamic private sector and the need for collective provision.

  47. 27/06/2012, Shinsei1967 wrote

    @Boris

    “So Thatcher did the UK no good at all and anything we thought she may have contributed was coincidence. Made my day, thanks.”

    That’s a non-sequitur.

    1) If you read what I wrote I only compared 90s/00s growth rates with 60s/70s. The 80s were higher.

    2) Growth in the 90s/00s might have been even lower without Thatcher’s reforms.

  48. 27/06/2012, Shinsei1967 wrote

    @ Ellen

    Just to take France as an example. You have left out a number of the local taxes imposed (garbage collection for instance)

    However, overall, local taxes raise the same amount as income tax.

    Which is certainly not the case in the UK.

    And Austria has a 2% annual property tax.

    And Ireland has a local bin tax, motor car tax is levied locally and a property poll tax has just been introduced.

  49. 27/06/2012, Max Stirner wrote

    Shinsei1967: Not every work is productive. If you work for the state or for companies which main customer is the state you don’t work productively. BTW that includes a lot of people in the financial industry.

    The wealth of a nation depends on people working outside the state system. And these people are in an absolute minority.

  50. 27/06/2012, Jim C wrote

    @Shinsei

    “Yours are the morals of the selfish (“services they themselves will never use”).”

    No, YOURS are the morals of the selfish, because you’re expecting other people to subsidise services you use but they don’t.

    As it happens, I am actually in the lowest tax bracket. However, I don’t expect the rich like Jimmy Carr to pay my way through life, simply because they have had the ability to contribute more to society through completing more successful voluntary economic transactions.

    We can discuss INEQUITABLE transfers of wealth like the banking system (which is essentially a state-protected counterfeiting cartel) but the answer, there, too, is not to tax them more highly, but to remove their cartel privileges… privileges created by the State.

    And just repeating ‘we live in a democracy’ is not a line of reasoning, it is merely stating the method used to extract value from the productive to give to the unproductive.

  51. 27/06/2012, Romford Dave wrote

    Err….. Population 62 million – 30 million working = 32 million not working sort of reinforces Max’s point Shinsei, given that we live in a land where the ability to do complex maths has assumed less and less importance in the World according to Gove…………

    Statistics are weapons of mass destruction requiring careful handling if one wishes to avoid their unintended use by the axe grinders, wagon jumpers and closed eyed readers that hang around the web regardless if a large percentage of the few agree with you. :-)

  52. 27/06/2012, Shinsei1967 wrote

    @Max S

    “The wealth of a nation depends on people working outside the state system.”

    The wealth of the nation depends on people working productively.

    There are large areas of the economy that we wouldn’t want the state to go anywhere near (like supermarkets or telecoms or banking). There are also large areas where most of us are happy to have state provided provision (policing, roads and health).

    And there are areas that we can debate whether they are better provided by state or privately.

    “or for companies which main customer is the state you don’t work productively.”

    So the entire pharmaceutical industry isn’t productive because 90% of its drugs get bought by the NHS. And BAE isn’t productive because its tanks and aircraft carriers get bought by the MoD. And large parts of the construction industry aren’t productive because they build the Olympic stadium, or a new ring road or a new bridge paid for by the state.

  53. 27/06/2012, Shinsei1967 wrote

    @Romford Dave:

    “Err….. Population 62 million – 30 million working = 32 million not working sort of reinforces Max’s point”

    As I made clear I said the majority of people were currently productive, would be productive or had been productive during their adult working life.

    Its desperate pedantry to include 5 year olds as part of a supposed “unproductive majority”.

  54. 27/06/2012, Luke wrote

    Max @ 49 “if you work for the state…you don’t work productively.”

    Eh? I think “productive work” is the provision of goods or services that people want or need. Bin men provide a service that is both wanted and needed. But on your weird view, they are not productive workers because they work for the state or (if outsourced) for a company most of whose work is for the state.

    Fred Goodwim on the other hand, having bankrupted the nation, was a paragon of productivity. But on your argument, those who came after him with shovels to clear up the mess cannot be productive because they work for the state.

    There is plenty of scope for argument about whether private sector workers are more efficient, and about what services the state really needs to provide. But the idea that the entire public
    sector are parasites living off the heroic and virtuous
    privatw sector is just silly, but it keeps coming up.

    And before you ask, I have never worked in the public sector.

  55. 27/06/2012, Romford Dave wrote

    Some might even say toddlerish Shinsei, but the closed eyed reader only sees what he wants to see and your perfectly clear caveat ends up lost in the mists of obfuscation once opened up to the www at large.

  56. 27/06/2012, Shinsei1967 wrote

    @Romford Dave

    Why don’t you actually make an argument rather than just posting gnomic utterances.

  57. 27/06/2012, Max Stirner wrote

    @ Luke: “I think “productive work” is the provision of goods or services that people want or need.”

    No, that is only part of it. People have all kinds of needs. But we live in a world of scarcity. Productively is when you allocate the scares resources of the world in a way that they are used where they are needed the most. And you need prices that are discovered on a free market to do that. You cannot do that with central planning. That means even when the state is providing services that are needed, it is highly unlikely that it does so productively. You always end up wasting resources and therefore making society poorer.

  58. 27/06/2012, JT wrote

    To return to Merryn’s original point…

    This would be all well and good if the amount of tax it is ‘fair’ for each person to pay was straightforward. But the system is now so complex that unless you’re on PAYE and have no other source of income you have little prospect of confidently calculating your tax liability without specialist advice. The self employed are pretty much forced into tax planning as a result.

    And I just don’t buy this “what Parliament intended” argument. Are we supposed to consult Hansard (as well as the thousands of pages of tax rules) whenever completing a tax return?

  59. 27/06/2012, Romford Dave wrote

    I got fed up labouring the argument after I had expressed my view at #9 and #15 Shinsei, at the risk of making another gnomic utterance, endless repetition merely becomes incantation .

  60. 27/06/2012, Paul wrote

    Merryn, I actually feel that there should be a maximum amount of tax that someone ought to pay on the basis that you can only consume so much of the nation’s resources. If you are going to take £500,000 odd pounds off someone who earns a million a year I think they have paid their dues.

    And one of your other points – the HMRC report – well that’s self interest isn’t it. I have personal experience of HMRC sending me a letter with “Criminal Investigation” typed in red on the envelope with regard to a business investment that I made using MY money in a legitimate business scheme approved by HMRC. Get real, Merryn. They are out for all they can get at any cost.

  61. 27/06/2012, Ellen wrote

    @48 Shinsei1967. Easy as it would be, I won’t tear apart your last comment to me. But I do happen to have personal knowledge and experiencene of local tax in Ireland. A lot domestic waste is collected privately through tagging and it generally costs households in the region of EUR25 a month. Kildare charges a flat annual charge of Eur200. The new property tax is EUR 100 a year. Motor tax is collected through county councils but water is free, although that might change. So that is EUR300 for property and refuse compared to my £2400per annum.

    But, my main point is that the UK citizen needs to earn considerably more than most to pay for life’s essentials – notably shelter and taxes and as a result we are becoming increasing uncompetitive globally. Our uncompetitiveness has nothing to do with inefficiency. Our own government’s policies are some of the main drivers to our uncompetitiveness.

  62. 27/06/2012, Boris MacDonut wrote

    #37 Ellen. I have already upbraided Merryn for this. You mean abnegate responsibility. That is the general term for renouncing or giving up. Abdication refers to formal offices and giving up formal (ususally royal ) powers.
    #60 Paul You must be joking. Maximum tax, I have heard it all. The richest have the most to protect so should pay for the whole of the legal system and the military for starters.
    #49 Max. If a state employed surgeon saved the life of an entrepreneur, would he be unproductive?

  63. 27/06/2012, Romford Dave wrote

    I’m reluctant to disagree with you Boris concious of your love of the ‘n’ word, but the Oxford English says otherwise…?

    What if the same surgeon saved the life of the infamous entrepreneur Alan Stanford, would he be culpable?

    No of course he wouldn’t, so it seems inequitable that he should be afforded a credit for the productivity of another even disrespectful as his efforts are meritorious by themself.

  64. 27/06/2012, Critic Al Rick wrote

    @ 61. Ellen

    Quote:
    “… the UK citizen needs to earn considerably more than most to pay for life’s essentials … and as a result we are becoming increasingly uncompetitive globally. … Our own government’s policies are some of the main drivers to our uncompetitiveness”

    Too right!

    Life’s essentials are largely under the control of pseudo cartels and virtual monopolies which have been allowed to establish themselves and to flourish by treacherous politicians – and now we have rip-off Britain.

    Not only that, I firmly believe that examples are set by the so-called elite and that their behaviour is, as closely as possble, emulated right down throughout society, we are now ‘feeding’ a load of Parasites (rich, poor and intermediate) – all adversely affecting the UK’s competitiveness globally.

    Furthermore, the so-called elite, the example setters, are the biggest avoiders of paying tax.

    Nero fiddles whilst Rome burns!

  65. 27/06/2012, Boris MacDonut wrote

    #63 Romford. You must have a different OED. Mine says Abdicate is the formal renouncing of an office ,especially the Crown (the Abdication crisis!). Abnegation is informal renouncing or denying of a right, duty(i.e responsibility) or belief. Longman says the former is giving up a position ,the latter giving up a right or obligation.
    By protecting our lives and property are the military or police unproductive? Would house values be high if our legal system was corrupt (perhaps due to low salaries)? Are road builders unproductive when they facilitate the movement of Tesco’s goods? You spout little pearls of anti-wisdom Dave.

  66. 27/06/2012, Romford Dave wrote

    I agree that it does say all of that Boris but it also allows for the use Merryn and Ellen employed it for, even if abnegate enjoys a certain rarity value for such usage.

    You’ll find no argument with me on the value our public sector brings B, which was why I pointed to the role of the surgeon not needing any justification for what he does – No argument that is, assuming we’re excluding the bloated and overpaid multi-levels of management segment :)

    Pearls of anti-wisdom is an excellent uncompliment B, on a par with Shinsei’s gnomic utterances if not slightly above, I shall treasure them both.

  67. 28/06/2012, Boris MacDonut wrote

    #66 Romford. I suppose it’s a bit like murder or assassination. The latter is reserved for the rich ,famous and powerful. I think abnegate had a religious origin…..but I do like to get things right. Sorry if I came across as having the vacuous and casual arrogance of a Victorian Mill owner. That sort of behaviour has been monopolised by Diamond Bob at Barclays.

  68. 28/06/2012, Merryn wrote

    Here’s a nice quote on all this spotted by John S.

    “There are many things in life more worth while than money. One of these things is to be brought up in this our England, which is still “the envy of less happier lands”. I do not believe it is for the benefit of children to be uprooted from England and transported to another country simply to avoid tax… Many a child has been ruined by being given too much. The avoidance of tax may be lawful, but it is not yet a virtue. “

    Lord Denning in Re Weston’s Settlements, [1969] 1 Ch 223

    http://en.wikiquote.org/wiki/Alfred_Denning,_Baron_Denning

  69. 30/06/2012, David1949 wrote

    Max Stirner writes “The reality is that every Pound saved from the bureaucratic system can be used productively in the real economy.” I think the Greek people tried this on a massive scale and look where it got them.

  70. 30/06/2012, Chris G wrote

    The argument put forward by Merryn that the immorality of Tax Avoidance lies in the fact that it subverts what Parliament intended, does not stand up. Who knows what parliament intended other than by reference to the words of the laws that it passes? Are the following immoral (were they intended by parliament when the relevant laws were passed?):

    1) For a higher tax rate spouse to hold his/her savings in a savings account in the name of a lower rate spouse in order to minimise income tax.

    2) To give money to one’s child or to a Trust with the objective of avoiding Inheritance Tax (Potentially Exempt Transfer).

    3) For dividends to be received by a spouse not resident in the UK for tax purposes (the case of Sit Philip Green is often cited).

    There are of course many others.

  71. 30/06/2012, J Nic wrote

    Simplifying & reducing taxes is the best remedy, but if not feasible, due to mismanagement & blatant self interest of those in power, then the setting of taxes should be removed from their powers. Simple accountancy rules put in place to set a reasonable rate, with a ceiling relative to GDP. Fines for avoidance should be more severe, and apply to all, not just the ‘outsiders’! It is the unfair, unethical system, biased towards the ‘insiders’ that annoys most diligent workers.

  72. 30/06/2012, Dominick wrote

    First, people would be a lot more prepared to pay tax if the money was properly and efficiently spent. Second, democracies are inherently high tax environments because there will always be more ‘poorer’ people quite happy to take money away from ‘richer’ people by way of tax. On both counts, no wonder there is a profound unwillingness of high earners to pay tax!

  73. 30/06/2012, Stef wrote

    Appeals to taxpayers to pay what is fair are naive. Legislators are aware of the case law on tax avoidance (including the case law which renders circular and artificial transactions inoperative for tax purposes) and should draft accordingly. The time for the consideration of fairness is when drafting laws, not when interpreting them. The fault for an unfair tax system lies squarely with government.

  74. 30/06/2012, Stef wrote

    Paul 60 – good point. There ought to be a maximum level of tax. Continuing on the emerging biblical reference theme, am I my brother’s keeper? If so, to what extent.

  75. 30/06/2012, Boris MacDonut wrote

    #74 Stef. Let’s stop this nonsense about maximum tax right now. the argument should be about a maximum wage. The rich benefit disproportionately from the services provided by the state and should therefore pay more towards it.

  76. 30/06/2012, Freddie Mays wrote

    @ Shinsei1967

    “Taxes are quite clearly not theft. And it is ludicrous to suggest that they are.”

    The government demands that we pay a % of our earnings to it and if we don’t pay it we get put in prison. And not for a short time. The government also sees to it that you receive some quite lumpy stretches indeed.

    Not really “ludicrous” in my book.

  77. 30/06/2012, Freddie Mays wrote

    @ Shinsei1967

    “Taxes are quite clearly not theft. And it is ludicrous to suggest that they are.”

    The government demands that we pay a % of our earnings to it and if we don’t pay it we get put in prison. And not for a short time. The government also sees to it that you receive some quite lumpy stretches indeed.

    Not really “ludicrous” in my book.

  78. 30/06/2012, SteveT wrote

    If you want to see truly wasteful expenditure, you need look no further than the government. It will grow and spend and grow and spend until there is little of the wealth producing sector left to fund its wasteful ways, then it will collapse. Not true? You only need to look at Europe to see a demonstration of the principle. So should we all smile and quite willingly pay over more of the enormous burden of income tax, corporation tax, VAT, excise duty etc the State imposes to fund its wasteful ways, than is legally necessary? No, absolutely not. It is the right of every citizen to legally minimise the burden the State imposes on the individual. If Parliament finds the tax collected/government expenditure equation does not balance, then let it cut the expenditure. Go back to the 1960s when it spent 38% of GDP not the 45%+ it consumes now.

  79. 30/06/2012, Libert_arian wrote

    If taxes are not theft then make then voluntary. The statist view seems to be “the state needs x, therefore we need to raise more tax, borrow more money or print more money”. How about spending less on buying votes and stamping out individual liberty?

    It is the actions of the state that lead to war and welfare dependency. It is therefore my moral imperative to pay as little tax as possible. If the state want to take more then it needs to legislate accordingly.

    I found your views surprising Merryn, and if Mr Bonner had written them I would have cancelled my MW subscription immediately.

  80. 30/06/2012, Frostya1 wrote

    Merryn & John, We only have to look primarily at Greece to observe just what becomes of a Country that inherently condones tax-avoidance…THEY`RE BROKE!, in fact so bloody broke that they`ll never clamber out of their self-excavated Hole, the same but to a lesser degree applies to the mentality of Italy, Spain & dare we say it, France. Germany (Murky) is aware of this genetic trait & is reluctant to sponsor a bunch of wanton Euro-Chavs bent on `Saturday Night Fever`…F

  81. 30/06/2012, Boris MacDonut wrote

    #80Frostya. Good point about Greece,not sure one can claim the Mediterranean nations are genetically pre-disposed to avoid tax.
    #78 SteveT. I wonder which bit of government expenditure you consider wasteful.Is it the £105 a week we give our pensioners?Or the £8 billion we spend caring for the mentally handicapped? Or perhaps the £10billion we spend keeping 90,ooo serious offenders off our streets? Maybe the £70 a week given to a third of the unemployed. Perhaps we could stop educating our kids or even forego roads. Hard choices indeed maybe we could sell Wales.

  82. 30/06/2012, SteveT wrote

    #79 Libert_arian
    Bonner would never have written this article – he regards taxation as legalised State theft. To an extent (where the State gets involved in matters past its core remit) I tend to agree with him.

  83. 30/06/2012, Davey42 wrote

    I detest extreme tax avoidance ploys as much as any taxpayer, BUT the moral argument was lost between 1945-1979 as a result of the predatory behaviour of quasi Marxist British governments. That was when working really hard meant your top rate of tax was 98% (83% plus investment income surcharge). It was vicious, it was confiscatory, it was devoid of any moral base and it broke the British economy. The outcome was inevitable, namely an application to the IMF for financial support and the growth of a tax evasion / avoidance culture which put down deep and ineradicable roots in our society. The current bleating by the morally outraged is decades too late

  84. 30/06/2012, LERENARD wrote

    Tax avoidance is legal. If society wants to eliminate tax avoidance, then the onus in on the state to change the law and close the loopholes, something the establishment as main beneficiary appears reluctant to do. Government inaction is the problem, not individuals or corporations who stay within the law. Tax avoidance should be replaced with investment incentives particularly in small cash starved companies, which would be a more efficient use of resources than handing over hard earned money to the wasteful and inefficient state. The short answer is close the loopholes, simplify the tax system and invrest where it can generate jobs and growth.

  85. 30/06/2012, SteveT wrote

    #81 Boris
    Very demeaning to the good people of the valleys to suggest selling their home turf!
    That aside, I’m interested in rolling back the State. Why did the UK function perfectly well in the 60′s but needs an additional State expenditure of 7-8% of GDP to function no better (or worse) in this decade?
    If you can answer that I’ll start agreeing with you, no matter how much that will hurt.

  86. 30/06/2012, Chris G (but not 70. Chris G) wrote

    First off can I propose that we are able to register our pseudonyms on the MoneyWeek website because it is a bit irritating when someone uses the same pseudonym.

    @ 70. Chris G- I’m going to avoid the word immoral but I think that yes points 2) and 3) that you make are probably outside the spirit of the law, 3) probably seems ok. Certainly it does seem like there are grey areas but in some cases it seems quite clear from a common sense point of view that something is outside the spirit of the law.

  87. 30/06/2012, Chris G wrote

    I also absolutely agree that the notion that ‘anything legal is fine’ is simply an immature attitude and an unhelpful one. These tax avoidance schemes are not in the spirit of the tax laws and if everyone avoided tax we would have a failed state. To look for and exploit loopholes then requires more laws, more bureaucracy and more civil servants to find and close these loopholes.

  88. 30/06/2012, Chris G wrote

    @6. Max Stirner
    “but rather a reason to question democracy”- ok so do you want to propose another system then? Because we live in a democracy you are free to do so, so you can make your case.

    On a bit of a tangent, I think part of what we have seen is perhaps a lack of democracy, as the population has been too politically apathetic and so powerful minority groups have been able to take advantage of the majority. If a population is more politically active that should inherently make a better democracy, that should achieve better results and also command more respect and credibility. For me political philosophy (and possibly finance), should be compulsory subjects in schools to better facilitate this (we live in a society where everyone is expected to vote, and anyone should potentially be able to actively campaign, but the majority of us have a limited formal political education).

  89. 30/06/2012, Chris the Dentist wrote

    By all means arrange your finances to reduce your tax take; that is only sensible. However dodgy Tax avoidance using Channel Island Schemes are morally inexcusable as they are really a form of theft. If you live in this country, you should pay reasonable tax. We all are only one step away from being receivers instead of donators. ps; at least 10 top execs from each of the LIBOR fiddling banks should loose their jobs and their pensions over their actions. If I did anything similar, it would be fraud and I would face jail.

  90. 30/06/2012, Boris MacDonut wrote

    #85 Steve.Wales makes up 5% of the UK, at current rates it’s worth £400billion. Russia might buy Wales instead of Cyprus.
    Reasons we spent only 38% of GDP in the 1960′s include; Having 7.5 million pensioners instead of 13 million. Having only 400,000 unemployed, a school leaving age of 15, just 5% going to University,virtually no motorways, few airports, only 25,000 in prison (now 90,000) a quarter of current crime rates, plenty of council homes to avoid housing benefit claims, life expectancy of 70 instead of 80 and 9 million fewer people.

  91. 30/06/2012, Boris MacDonut wrote

    #85 Steve. There are many differences between today and 50 years ago, not least the leaps forward in medical care. We are a larger more sophisticated place with more infrastructure, leisure time and higher expectations. I hope you aren’t all misty eyed about the 2 channels on the B&W telly and the chance of getting TB. Try telling all those who now live to 80 that it was better in 1966 when they died at 70. Enhancing all those lives by 10 years is a massive achievement, as is offering a decent ediucation to 18 and beyond. Civilisation doesn’t come cheap.

  92. 30/06/2012, Chris G but not Chris G 1st nor Chris G 2nd wrote

    Chris G @ 86 are you sure that’s how you’d interprete 1, 2 & 3? I see it completely opposite.

  93. 30/06/2012, Romford Dave wrote

    Precious few of the reasons you’ve put forward Boris justify the % increase in State size. To suggest that the advent of multi channel colour TV is one of them is worthy of a ministry of truth decree.

    Life expectancy has dramatically increased in virtually every country in the world, the majority of which are not hampered by an administrative burdened NHS and don’t actually exhibit the same growth in Statism we’ve witnessed here.

    There’s a lot to be said about the improvements in our lives over the last 50 years but that isn’t necessarily true for everyone and it certainly isn’t attributable to Big Brother.

    The reality is that most improvements were brought about by the explosive growth in debt that funded an explosive growth in profit since the early 70s, the true cost of which is yet to be paid.

  94. 30/06/2012, Boris MacDonut wrote

    #93 Dave. Give your pince-nez a wipe as you have mis-read my post. I have not cited colour TV as a reason for higher state spending, only B&W TV to illustrate the relative backwardness of 1962. As pension payments account for 13% of Government spending and pensioners numbers have near doubled that alone seems to account for 4% of the rise, much of the rest will be social care for the elderly. I assume all you spending cutters would not let our grannies grow old gracefully. Most improvements happened before 2002, most debt was taken on after 2002.

  95. 01/07/2012, 4caster wrote

    So who thinks it’s right for a 7-figure earner in the UK to have his income paid to a company in Jersey, all but a token £10K? The Jersey company then lends him the income back after deducting a 20% cut; the earner pays little or no income tax because borrowed money is not taxable; the Jersey company is committed as part of the initial agreement to write off the loan after a few years. He may even own the Jersey company!
    This is a perfect example of the scam mentioned by #73 Stef, and a possible remedy: “case law which renders circular and artificial transactions inoperative for tax purposes”.
    Merryn is right: people who benefit from roads, national defence and police services and the justice system should contribute to the costs, according to their income and spending.

  96. 01/07/2012, Martin wrote

    Tax avoidance, state benefits and ultimately the way the fiscal pot is spent, is the responsibility of government.
    If they did a better job we would all pay less tax.

  97. 01/07/2012, SteveT wrote

    # 90&91 Ah, Boris, I salute you as a master of the practice of selectively quoting statistics, which as any politician knows can support any argument, no matter how wrong. Magnificent.

  98. 01/07/2012, Romford Dave wrote

    Boris I’m happy to polish the pince-nez till it sparkles if you’ll replace the rose tinted lenses in your specs for clear when you look at the state :)

  99. 01/07/2012, Romford Dave wrote

    Nothing is as clear cut as any of us would argue, but the growth in private sector debt from the early 70s funded the economic activity that brought about the improvements you speak of, aided in no small part by the sugar rush of North Sea oil & gas.

    Funds that poured into state coffers during this time of increased economic activity were used to expand the state & soak up revenue rather than putting it to the use Keynes advocated.

    The post 2002 explosion in public debt was based on the flawed thinking that the economy would continue on the same trajectory having avoided the bust. The 08 decision to transfer untenable private sector debt onto the public sector is a nuclear event yet to detonate.

    Mistakes have been made by all, in the private sector companies go bust, people move on and wealth is destroyed; in the public sector, institutions remain,  people stagnate, but wealth is still destroyed.

  100. 01/07/2012, paul wrote

    An ISA is a tax wrapper and therefore your only intention in starting one is to avoid tax – otherwise you would hold your OEICs etc outside it. Granted, this was ‘intended’ by Parliament but the ‘intention’ ground can be tricky to hold. For example, words should ‘mean’ what they ‘normally’ mean and that if they aren’t clear enough then HMRC ought to draft them better. Don’t accuse the individual of acting ‘morally incorrectly’ just because he complied with the words ‘as written’. Don’t try to reinterpret their meaning afterwards either. If HMRC are allowed to dispute the meaning of their own legislation then how on earth is the individual supposed to proceed in his tax affairs? There are apparently over 10,000 pages of tax statute – how is he to know which words he can take literally and which others he must guess at for their ‘meaning’? If the taxpayer has no certainty of meaning then ‘intention’ becomes arbitrary – or was this something Parliament intended?

  101. 01/07/2012, Sustenance is Zero Growth wrote

    An ISA is a perfect example of misallocation of tax payers money. In France their tax free savings vehicle is limited to 15300 Euros, high enough to encourage savings but not so that it becomes a burden on the taxpayer benefiting wealthier savers with million pound pots.

    Rather than benefiting a few, increase the threshold where tax becomes payable and benefit all taxpayers.

  102. 01/07/2012, Chris G (doesn't matter which one) wrote

    @ 92. Haha, ok point taken.

    I made a typo in my 86. post, I meant to say 1) probably seems ok. Points 1) and 2) I am not clear on the details of, but my instinct was that 1) seems ok that a couple should arrange their affairs between themselves in the optimum way provided they are both listed as residents on the u.k, I suppose that would depend on your opinion of marriage. Point 2) I am not clear on the details of but in principle I support inheritance tax so it depends how that fits in. Point 3) I think is definitely unreasonable, as Philip Greens has made his fortune in the U.K using U.K infrastructure and services etc. and now some of these earnings are being taxed at lower rates in another country (Monaco I think), when this money should be going back into the U.K treasury to ensure a sustainable economy and opportunity for the next Philip Green’s.

  103. 01/07/2012, headsm wrote

    I notice the section “Tax dodge of the week” is missing from this weeks magazine. I wondering why? It’s Particularly interesting since the “Tax dodge of the week” article the week of the Jimmy Carr editorial had the line “Buts thanks to “sloppy drafting of the rules” there is a way for higher taxpayers to receive the full amount”. Why do we need to know this if we are all supposed do the right thing and pay all the taxes the Government intends us to?

  104. 01/07/2012, NVP wrote

    superrich “avoiding” Reasonable tax Charges ?

    whatever next ?….Bankers manipulating Libor ?

    Until we have more smart and vigilant (and empowered) people on the “good” guys side of the fence, things will always be bent , abused and distorted by the players out there…..thats assuming we know and define whats right

    Welcome to the Game

    NVP

  105. 01/07/2012, Boris Macdonut wrote

    #97 Steve. You asked me to explain why the state needs a larger proportion of our income today thabn in the 1960′s. I gave you several good reasons. These are not selective staistics or manipulated. They are plain facts. Pensions and health pauyments eat up by far the biggest chunk of Gov’t spending and they have inevitably grown with our population and their longevity. If you think i’m wrong I suggest you quote the facts that poin the other way……..I’ll give you a headstart. We have much smaller armed forces and no empire.

  106. 02/07/2012, commentator wrote

    Sorry Merryn, this article is very poor especially by your own high standards ( I expect pompous bluster from Boris MacDonut). Long gone are the days when we can say that taxation is the price we pay for civilisation. All our politicians use the confiscatory powers of HMRC to seize assets in order to boost their own power, wealth and influence by buying votes. There is no such thing as “acceptable” and “unacceptable” tax avoidance: these are extremely subjective borderlines which can be debated forever. People (especially politicians) usually only object to OTHER PEOPLE avoiding tax. As for a GAAR, this is simply a device for making up tax law as HMRC goes along so that the tax system becomes a Catch 22 for the taxpayer. Ignore the spin about safeguards: Henry VIII would have approved.

  107. 02/07/2012, Boris MacDonut wrote

    #106.Commentator. The Government takes in £600 billion pa but is spending £730 billion pa and owes £1,050 billion. To adress the gap and pay down the deficit over say half a generation would mean a belt tightening equivalent to a 27% reduction in spending. Would we be as civilised with 27% fewer hospitals and a school leaving age of 14? Or giving our pensioners 0nly £75 a week and from age 75. Maybe we could close 27% of our roads go to monthly bin collections. I hope my self assertion was not too pretentious.

  108. 03/07/2012, SteveT wrote

    #106 Commentator. I couldn’t agree more on both points you make. I had penned a rebuttal for the selective statistics quoted in #90, but I am really beginning to think it is a waste of time arguing against dogma.

  109. 03/07/2012, Boris MacDonut wrote

    #108 . Steve. Dismissing facts as dogma is a bit weak. I can only assume you don’t have a proper counter argument and have reverted to insults. What could be more dogmatic than wanting to “roll back the state” or saying there is no such thing as unacceptable tax avoidance?

  110. 03/07/2012, Barkingmad wrote

    “Would we be as civilised with 27% fewer hospitals and a school leaving age of 14? Or giving our pensioners 0nly £75 a week and from age 75.”

    Clearly selective – you pick on the NHS, education and pensions as they are ‘emotive’ rather than looking at how we can reduce the benefits bill and growing the economy. Every ‘real’ (not public sector) job we create is one less on benefits or one less lost abroad. We should look at reducing the complexity and cost of employment to get people into work / off benefits.

    You are not going to grow the economy by having a complex and high rate tax regime – the highest earners can most easily ‘leave’ or find other ‘legal’ ways to not pay as much tax.

  111. 03/07/2012, Barkingmad wrote

    We must remember what Mr. Carr did was ‘legal’ even though many people would regard as ‘the wrong thing to do’.

    What I wonder is how many people – if in the same situation would do the same and also how many who are quick to slam high earners for reducing the tax they pay are either claiming benefits illegally or accepting work for ‘cash’ where no tax is then paid?

    Perhaps it’s also time to look at getting rid of ‘cash’ so the tax man can tax all those people illegally evading tax. As I have said before I’m not defending them but one one side you have high earners seeking to reduce the tax they pay (legally) and on the other you have people paying little / no tax working for ‘cash’ or claiming benefits they are not entitled to or where they could work.

  112. 03/07/2012, SteveT wrote

    #111 Barkingmad – I think Mr Carr earned the disapproval of so many, not so much for what he did in minimising his tax bill, but for doing it whilst slanging off in his shows others doing the same thing. Everyone hates a hypocrite.

  113. 03/07/2012, Boris MacDonut wrote

    #111. Barking. Of course this is not selective. I have cited the three largest areas of Government spending. The NHS takes over £110 billion, Education £70 billion and Pensions eat up £80 billion. They are “emotive” because they are so crucial, but are also the most expensive. You make the common mistake of thinking the Benefits bill is high,when pensions are themselves benefits and are the lion’s share of DWP spending. Please let me know where the 27% cuts should fall if not here?

  114. 04/07/2012, Barkingmad wrote

    @Boris – your figures assume it will only be paid down by making cuts you (purposely or an oversight?) made no account for a growing, larger economy / increased tax receipts etc. and of course the debt being ‘inflated’ away. But of course making bold statements like cutting 27% of hospitals is a good soundbite… ;|

  115. 04/07/2012, Barkingmad wrote

    @Boris – “Everyone hates a hypocrite” – true – ‘do as I say not as I do’…

    The problem is just as he did it (albeit legal) while poking fun at barclays etc. there are many hypocrites slanging [??] or slagging him off when they are no better or even worse themselves (worse being what they do being illegal).

    I actually feel this may backfire on the government – many people with similar earnings may hear ‘legal way to pay almost no tax’ and think ‘why am I paying 50%’?? If he was not a ‘celeb’ I’m not sure he would be quitting the scheme so would be interested to see how many more people join this or similar ones.

  116. 04/07/2012, Boris MacDonut wrote

    #115 Barking. I didn’t mention hypocrites.
    #114 Barking. I also didn’t factor in the interest payments on the average o/s debt of £525 billion pa. I was trying to keep it simple in the limited space. If you factor in this and a 1.5% GDP rise for 15 years the required cut falls to 23%. So go back to my post and substitute 23% for 27% and ask yourself the same question. s I posed. Is it reasonable to make cuts which amount to much more than decimation.

  117. 05/07/2012, Barkingmad wrote

    @Boris – “I didn’t mention hypocrites” – yes – my mistake it was SteveT.

    I can’t agree or disagree with your figures as have not the time to verify them. There are many factors with QE, inflation to erode the debt, interest paid on it – how much GDP would rise and does 1.5% increase in GDP mean tax receipts only increase by 1.5%. I don’t know what you have based your figures on – they could be fact of fiction – but you were basing them purely on ‘cuts’ which is an over-simplification to generate a higher figure.

    However, I think we need a mix of some cuts and policies for growth – although I’m sure many people will view that as ‘having your cake and eating it’. Getting people off benefits and into work (and no I’m not suggesting chuck people out of their wheelchairs) has the double benefit of reducing the benefits bill as well as increasing the taxpayer pool.

  118. 05/07/2012, Barkingmad wrote

    I do not feel increasing income tax rates (especially for the rich) will actually increase tax revenues in the long term – these people are the ones that can most easily ‘move’ (avoiding tax completely) or employ creative accountants – both completely legal. Higher tax rates and complex rules ‘encourage’ evasion – whereas perhaps simplifying and flattening them would reduce evasion, promote growth, employment and may therefore increase overall tax revenues.

    Would be nice to think you could keep putting taxes up and people would just happily set up businesses here, work just as hard and pay them so you get more tax revenue – but it’s not reality. The top 5% of earners already pay 25.3% of the income tax (up from 23.3% 12 years ago) and the top 1% pay 12.6% (up from 11% 12 years ago).

  119. 05/07/2012, Boris MacDonut wrote

    #118 Barking. After Pension and Housing costs ,the top 1% have just over hal fof disposable wealth . That is precisely why the Occupy the City movement choose the 99%/1% split. In economic terms it is a 50:50 split. Soa sking them to pay 12% of taxes is quite fair,especially as we now seem to have to put up with them lieing to and cheating the rest of us.

  120. 06/07/2012, Barkingmad wrote

    Not sure about your lieing [sic] (lying) and cheating comment – I’m sure there are plenty of liars and cheats at all income levels. If you mean people avoiding taxes LEGALLY it may be distasteful to many but the key word there is LEGAL. It is for the government and HMRC to close down these loopholes (if they can).

    I am sure there are many (taxpayers) who find it just as distasteful when people claim benefits they are not entitled to (ILLEGAL) or just choose not to work when jobs are available and they are otherwise perfectly able.

    Is there any point taxing more if does not ultimately raise more revenue – the problem is higher taxes (for higher earners) is very populist but not necessarily going to have the desired effect.

  121. 06/07/2012, Barkingmad wrote

    Perhaps we should ban ISAs and how about tax relief on pensions – after all they are legal tax avoidance and people with higher incomes typically benefit more so they must be stopped?

    No-one pays more tax than they need and I think flat rate taxes are fairer (as well as may help growth and reduce avoidance) but then it depends how you define ‘fair’ is it fair that if you earn 20% more you pay 20% more tax or should you pay more than 20% more tax?

  122. 07/07/2012, Boris MacDonut wrote

    #120 Thanks Barking. I take solace in the the fact that I am so unfamiliar with lying that I cannot spell the word!
    Wierd concept that it ios okay to seek to avoid tax ,but a legitimate choice not to work is seen as offensive. Do you suffer from the Protestant work ethic?
    #121. I am massively baffled by this.I can find no point on the income tax scale where earning 20% more means paying 20% more tax. Someone on say £40,000 pays 16% and if they increased income to £48,000 would pay 18.7%.

  123. 09/07/2012, Barkingmad wrote

    @Boris – re 121 – sorry to have baffled you – here are some actual examples – someone earning:

    1. £9000 will pay £179 income tax – someone earning 20% more (£10800) will pay £384 income tax (115% more income tax).

    2. £18000 will pay £1979 income tax – someone earning 20% more (£21600) will pay £2699 income tax (36% more income tax).

    3. £60000 will pay £13884 income tax – someone earning 20% more (£72000) will pay £18684 income tax (35% more income tax).

    So clearly you can earn 20% more and pay more than 20% more income tax?

  124. 09/07/2012, Barkingmad wrote

    @Boris – re 120:

    Who pays more tax than they legally need to? Putting money into a pension or ISA is also legal tax avoidance – but I’m guessing most people people would accept those as ‘ok’.

    What most taxpayers would object to is them having to pay more taxes for those who ‘choose’ not to work – unemployment benefits should be short term to help you while you find a job – not just for people who decide not to work but expect everyone else to work harder / pay more taxes as a result.

    The other issue is of course people claiming unemployments and other benefits they are not entitled to and / or also working (cash in hand) but not paying tax – that certainly is illegal on both counts.

  125. 09/07/2012, Barkingmad wrote

    @Boris – to work on your example:

    Someone on £40,000 pays £6379 in income tax – someone on £48000 (20% more) pays £9084 in income tax = 42% more income tax.

    Let’s include employee NI as well – someone on £40,000 pays £10268 in income tax + employee NI – that same person earning £48,000 pays £13381 in income tax + employee NI = 30% more tax.

    So earn 20% more and pay more than 20% more in tax and of course it’s worse than that – earn more – pay more tax and are entitled to fewer benefits.

  126. 09/07/2012, Boris MacDonut wrote

    #123 to 125 Barking. It is depressing how cynically you play with figures simply to have a go at the unemployed. What people are concerned with is the rate at which they are taxed, hence the furore over the 50% rate. At no point on the scale does anyone pay a 20% higher rate by earning 20% more. At margins one can always find anomolies Someone on £8110pa pays £1 in tax. Earn 5% more £8500pa and you pay £79. That’ 7,800% higher. How outrageous.

  127. 09/07/2012, Barkingmad wrote

    @Boris – it is you not I ‘playing’ with the figures. I said nothing about a 20% higher income tax RATE – I asked is it fair that if you earn 20% more you pay 20% (or more) tax – this that is quite obvious?

    Surely it’s fair that if you earn 20% more you pay 20% more tax (not a 20% higher rate) – the reality is (using your example) you earn 20% more and pay 42% more income tax or 30% more tax if you include tax and employee NI.

    I agree at margins it’s much worse but it’s certainly not just at margins – I have worked 4 examples now for you…

  128. 09/07/2012, Barkingmad wrote

    @Boris -can see how you can genuinely take my comment about someone earning 20% more should not pay more than 20% more tax into ‘having a go at the unemployed’ – since the unemployed are paying no income tax where is the link?

    I actually said (in a separate post): ‘What most taxpayers would object to is them having to pay more taxes for those who ‘choose’ not to work – unemployment benefits should be short term to help you while you find a job – not just for people who decide not to work but expect everyone else to work harder / pay more taxes as a result.’

    Do you really disagree with that statement?

  129. 09/07/2012, Barkingmad wrote

    (correction)

    @Boris – can’t see how you can genuinely take my comment about someone earning 20% more should not pay more than 20% more tax into ‘having a go at the unemployed’ – since the unemployed are paying no income tax where is the link?

  130. 09/07/2012, Boris MacDonut wrote

    #127. It is perfectly fair to charge better off people more. Turn your argument around it is surely unfair for those on say £5,000pa to pay nothing at all.
    #128 Unemployment Benefit is taxed. If you happen to be in work for 6 months and out of work for 6 months you’d pay tax on it like any other income. So you object ot those who say choose to work for only 6 months like seasonal workers.
    Of course I disagree with your statement it is wrong on all levels.

  131. 09/07/2012, Barkingmad wrote

    @Boris – you accuse me of playing with the figures yet by your lack of comment can only assume you now accept your figures in 122 were wrong.

    I’m not saying do not charge better off people more – I’m saying it’s that if you earn 20% more money you should pay no more than 20% more income tax whereas in ‘your’ example (once we use the correct figures) you earn 20% more and pay 42% more income tax (or 30% more if you include income tax and employee NI).

    The issue with anyone who ‘chooses’ not to work is that by then claiming benefits they ‘require’ everyone else to work more / pay more tax – conversely every extra person in work reduces the tax burden / contributes to tax revenues. Unemployment benefits should be shorter term to get people into work – the expectation should be to work and be productive.

    It’s fair unemployment benefits be taken into account when calculating your income / tax for the year – same as the state pension then.

  132. 09/07/2012, Barkingmad wrote

    @Boris – I said:

    ”What most taxpayers would object to is them having to pay more taxes for those who ‘choose’ not to work – unemployment benefits should be short term to help you while you find a job – not just for people who decide not to work but expect everyone else to work harder / pay more taxes as a result.”

    You (unsurprisingly) disagreed but please elaborate. So if I freely choose not work work (when jobs I was qualified for were available) my working neighbour should now and open-endedly finance my choice not to work.

    The state and taxpayer should be there to be a safety net for people who genuinely cannot work – if you just don’t want to work can’t see how it’s fair to expect your neighbour to work harder to support you as well as themselves?

    What happens if too many people choose not to work?

  133. 09/07/2012, Boris MacDonut wrote

    #131.My figures are not incorrect. At £40k you pay 16% and at £48k you pay 18.7%. I have shown how ridiculous your “fairness” is. Someone on ££9k pays £179. Your system dictates that someone on £18k should thus only pay £358 ( a tax rate of less than 4%).
    #132 Choice is what your Mrs Thatcher wanted us all to have.

  134. 10/07/2012, Barkingmad wrote

    @Boris – your figures are incorrect for what was being discussed – you are trying to use income tax paid as a percentage of income but that is not what we were talking about – to quote you:

    “I am massively baffled by this.I can find no point on the income tax scale where earning 20% more means paying 20% more tax.”

    Someone on £40,000 pays £6379 in income tax – someone on £48000 (20% more) pays £9084 in income tax (42% more income tax).

    So you work 4 days a week and decide to increase your hours to work 5 days or work hard for a promotion but end up paying a lot more tax as a result. I don’t see much of an incentive there?

    You will always get anomalies around the personal allowance etc. – yet more reasons for simpler / flat(ter) taxes.

  135. 10/07/2012, Barkingmad wrote

    @Boris – depends what you view as fair – you said:

    “Someone on ££9k pays £179. Your system dictates that someone on £18k should thus only pay £358 ( a tax rate of less than 4%).”

    I did not see much point in scrapping personal allowances as a lot of people would just end up with more benefits as a result and it’s probably easier (cheaper) not to tax people on lower incomes than tax them then repay it as benefits.

    Think the whole lot needs a massive simplification and flattening – close tax loopholes, stop people claiming benefits they are not entitled to, encourage people into work and encourage people to work.

    Unfortunately your view seems to be tax hard working people even more, tax companies more, stifle growth and don’t work if you don’t want to and everyone else can pay. The problem is when you discourage work and too many people choose not to work we are really in a mess.

  136. 10/07/2012, Barkingmad wrote

    @Boris – ‘Choice’ I have no problem with choice but if a person chooses they do not want to work do not think it’s fair to expect everyone else to support them indefinitely.

  137. 10/07/2012, Boris MacDonut wrote

    #134 to 136. He who calls himself Barkingmad is losing the plot. What do you think is better? A system that has evolved over hundreds of years ,with many checks and balances to allow some fairness ,or your bag of a fag packet attempt to justify lower taxes for the rich to persuade them not to avoid it. Next you’ll suggest doubling the speed limit so fewer Ferrari owners are done for speeding.

  138. 10/07/2012, Barkingmad wrote

    @Boris – compared to your ideas of further complicating the tax system, taxing more, discouraging growth and work if you feel like it but don’t worry if you don’t want to ideas…!!

    I think working more / harder should be rewarded – not taxed and taxed – you let everyone sitting at home ‘choosing’ not to work but fail to consider the long term implications of that – the negative message it gives to the people in work paying for it.

    There is nothing fair about taxing those that want to work more – even more and allowing people who don’t want to work (I’m not talking about people who cannot work) to live off their hard work.

    You are under the mistaken belief that you can just keep taxing more and more and it will keep increasing tax revenues – this is not the case – certainly not over the longer term.

  139. 12/07/2012, Boris MacDonut wrote

    #138 BM. Those greedy enough to work more than 40 hours a week or work “harder” are denying jobs to the 3 million+ unemployed, mainly young people. This spreads disillusion and resentment. But you persist in suggesting the rich should be taxed less, ostensibly to encourage them and for fear of punishing them. I agree a few measures to get a bit of work out the workshy is probably overdue,but using them as an excuse to lower tax on the excessively well off is a knee jerk old style Thatcherite response. Your ideas have had their day Barking and they failed.

  140. 17/07/2012, Barkingmad wrote

    @Boris – the reality is (a) some people need or choose to work more than 40 hours a week – and (b) there are jobs for a lot of unemployed people – many just choose not to take them.

    It’s not a case of greedy people working more robbing the unemployed of jobs – the flip could be said that they work more as they are taxed too much as there are too many unemployed.

  141. 17/07/2012, Barkingmad wrote

    @Boris – you would probably be happy if there was a 100% tax on anyone earning over £25k (for example) and benefits that topped everyone else up to £25k and for anyone who wants to work to work but if you don’t want to – don’t. The problem is – as with many of your ‘suggestions’ you are not looking long term damage and are mistaken in thinking that you can just tax, tax and tax some more…

    Your view is tax the relatively rich more and more (regardless if it hurts growth and encourages evasion) – my view is tax at a lower rate and more simply but encouraging growth / reducing evasion – so total tax revenue may actually rise.

  142. 17/07/2012, Barkingmad wrote

    @Boris – there is also the issue about would taxing the rich ‘more’ actually work – after all what is the point in having a tax if it does not raise more money (and could actually risk losing money in the long run) especially if these people can most easily (and legally) avoid paying tax or leave the country. Just because you cannot ‘stomach’ the idea that reducing taxes could (in the long run) actually increase tax revenue does not mean it could not be true.

    The top 1% already pay 12.6% of the income tax (and probably much more of ‘all’ taxes) – the top 5% pay over 25% of the income tax – that is already more than the whole of the bottom 50% of earners. So every one you lose from the top hurts a lot more at the bottom – by taxing more you could end up hurting the lowest earners even more.

  143. 18/07/2012, Barkingmad wrote

    @Boris – have a look at:

    http://conservativehome.blogs.com/platform/2012/05/philip-booth.html

    He has calculated the ‘Total marginal tax and benefit withdrawal rate’ at varying income bands. I’d imagine most working people will fall into the ‘£8,105-£38,798′ band yet they pay the 73% marginal rate – if anything it’s a good argument for tax simplification if nothing else…

  144. 18/07/2012, Boris MacDonut wrote

    ##140-143 Barkingmad. Blinking flip, you’ve gone mental in your quest to silence opposition. How ridiculous to cite the top 1% (who says they are top?) paying 12.6% of tax when they hold 24% of wealth and 19% of income. Stop shooting at your own feet Barking and give up on the right wing pro rich nonsense.
    They do not work harder unless it is to avoid tax at all rates and levels, because they think they are special and above the law.

  145. 19/07/2012, Boris MacDonut wrote

    #143 Barking. Now your cage has stopped rattling it is worth getting back to the original article. It is not okay to avoid Tax.

  146. 19/07/2012, Barkingmad wrote

    @Boris – the problem is you have no credible ideas other than gimmicks, more complexity and ever higher taxes (to the probable detriment of everyone). There is no point raising taxes if you do not raise more tax income in the long term. You seem happy for people to work if they want but receive full support from those that do if they just choose not to. You suggest people wanting to improve their situation or having to work more / harder (probably to pay for your people choosing ‘not’ to work) are greedy. Really…

  147. 19/07/2012, Barkingmad wrote

    @Boris – if people are legally avoiding tax (and we have seen there are many ways to legally avoid tax – not just all fancy structures involving Jersey etc.) then it’s for the government to close these loopholes. I argued that simplifying the flattening the tax system is a good way to reduce avoidance – instead you want more complexity and higher rates which will only encourage it further (well done!).

    But as I also pointed out there are many other ways people are legally and illegally avoiding tax – not working when they could (and taxing working people more as a result), working for ‘cash’ etc. The government should look to tackle all these areas. You clearly do not like the idea that some people earn more than others or that more work should be rewarded – but fail to consider the long term problems if we went your route and paid everyone the same – working or not.

  148. 19/07/2012, Barkingmad wrote

    @Boris – “They do not work harder…” – the ‘fact’ is some people do work harder than others and some people do have more valuable skills etc. so earn more. Some people do not work at all – others may work fewer hours – some more. You could even argue working less is a form of tax avoidance and certainly higher taxes and a complex tax system encourage / facilitate tax avoidance.

  149. 19/07/2012, Boris MacDonut wrote

    #146-149 Barking. Thanks for telling everyone what you think I think. In fact am perfectly happy for people to be rich as long as everyone has enough. I see income tax as a redistributive tool , not a Government income maximising tool.

  150. 19/07/2012, Barkingmad wrote

    @Boris – ‘everyone has enough’ – yet you think it’s fine for people to choose not to work and for those working to support them and that people who want to work more / harder are being ‘greedy’. You would probably make people at lower income levels much better off if you encourages those ‘choosing’ not to work to pay their way and went after people working illegally to pay tax.

    I have no issue with income redistribution but think it has to be ‘fair’ to those people who want to work more / earn more – yet complicating and increasing taxes just encourages further evasion. Close some of the dodgy loopholes but also simplify taxes and flatten them and you may find you reduce evasion, encourage growth and may end up with more taxes as a result – surely that’s a win for everyone?

  151. 19/07/2012, Boris MacDonut wrote

    #151 You clearly didn’t listen to the Today programme this morning. In leafy Salisbury they are now handing out 4,000 food hampers to the needy every week. People are starving themselves so their kids can eat. One woman had not eaten for 5 days.Doctors report malnutrition in 21st century Britain.
    The inequality in Britain has gone too far and you fatuously claim everyone has enough. How glib. How ill informed.

  152. 19/07/2012, Boris MacDonut wrote

    Sorry I meant #150. I forgot to say you seem to think it’s fine for people to have to choose not to eat.

  153. 20/07/2012, Barkingmad wrote

    @Boris – I did not claim ‘everyone has enough’ – I was quoting from your message (as I had done previously).

    The strange thing is you suggest it’s fine for people to choose not to work (when they are able) when working would both increase their income and reduce the amount of benefits paid therefore leaving more for the most needy.

    I have no issue with some people needing benefits – but I do take issue with people who just decide they do not want to work yet expect everyone else to pay for them.

    You harp on about taxing the rich more but will not accept that in the long term higher taxes do not necessarily equate to higher tax revenue – growth in the economy, job creation and then the total amount of tax earned is far more important than you having a populist jab at bankers and the super wealthy.

  154. 20/07/2012, Barkingmad wrote

    @Boris – I’m happy to accept there are genuinely needy people and the irony is many will also be ‘working’ while you are happy for perfectly able people ‘not’ to work yet still receive support indefinitely.

    You are right I did not see the Today programme – but as a general rule I think anyone who can work and does should be helped and should not lose as much of any extra income they earn in tax or loss of benefits – not much of an incentive to earn an extra £1 when 70%+ is lost. Anyone who can work but ‘chooses’ not to must be encouraged to work and do their bit – it’s not a free ride. Anyone who genuinely cannot work should of course receive support.

    Get those people not genuinely entitled to benefits into work and those working for ‘cash’ to pay their tax and there is less of a tax burden for everyone else and more available for those that genuinely need help.

  155. 20/07/2012, Boris MacDonut wrote

    #153/154. B’mad. You win. For a minute I thought there was half a chance to voice the concerns of the many unheard poor. But no, I have to admit your endless ranting arguments have convinced me (and I suspect many others) that it is an unheard of evil to ask the rich to pay a bit more than most towards our mutual well-being. I for one am now happy to concede that it is better to ask the rich to pay whatever they are willing to pay. All contributions are appreciated and who are we to suggest they could afford more.
    I remain your nemesis, for you sir are as wrong as fox-hunting.

  156. 24/07/2012, Barkingmad wrote

    @Boris – I do not really think it is fair to ask any taxpayer (at any level) to pay more to pay for other people who can work but just choose not to – but you do.

    You may think it’s ok for people get a ‘free ride’ but I’m sure most do not. I am not talking about people who cannot work, people who are short term unemployed etc. but why should you or I or anyone HAVE to work more because someone else chooses NOT to work at all.

    You also fail to accept that it may be possible to tax at a lower rate but over the long term gain more in tax revenue – surely better for everyone – you are just blinded by the populist view of just taxing the super rich more and more and more even if it yields no more or even less revenue!

  157. 24/07/2012, Barkingmad wrote

    @Boris – I have every sympathy for the poor / low earners – the difference is in how we view the solution. You think tax, tax and tax some more – that just encourages people (especially high earners) to leave the UK, increases evasion, is a disincentive to work, discourages investment and growth.

    I would rather taxes were fairer – especially for the taxpayer – rewarded people for working more, promoted growth and (longer term) would probably increase the overall tax revenue.

    I want a country that is prosperous, where there are jobs for people to do and where people are rewarded for their work. We also need to support people who genuinely cannot work but do not see how it is fair to indefinitely pay for people who just choose not to work when that choice means other people have to work more.

    If I decided to work a day a week less would you work a day a week more for me?

  158. 24/07/2012, Barkingmad wrote

    @Boris – in conclusion – all you seem to suggest is tax the rich more (which does not necessarily work), make taxes more complex or have gimmicks and it’s fine to choose not to work – all very negative.

    In contrast I have been suggesting we should be fair to (all) taxpayers and encouraging growth with the longer term aim of increasing tax revenue. Getting people into work and off benefits (that they are not genuinely entitled) to leaves more money left over for people who genuinely cannot work and need those benefits.

    You just keep mentioning the poor – well increasing the overall tax revenue, getting people who can work into work and off benefits means there are hopefully fewer poor and more money to help them.

  159. 24/07/2012, Boris MacDonut wrote

    #156-158. Barking. You are not listening, just ranting on about what you think I think. I don’t feel it is important to tax more and more. Only to use the tax system to redistribute and be fair.
    A society that can bear the cost of some who choose not to work is more civilised. Having either time or money (or both) to not work is mark of high civilisation. Yopu need to read How to Be Idle by Tom Hodgkinson.

  160. 24/07/2012, Barkingmad wrote

    @Boris – (you didn’t answer) – so are you are happy to work a day extra a week so I can have a day off?

    The tax system – you talk about fair but what does that mean and surely it depends – do you mean it’s fair for already working people to have to work more to pay for people perfectly able to work but just choose not to. By the same token you think it’s fair for people to not feel they need to have car insurance as everyone else just pays a bit more on their policies.

    I agree it’s fair to redistribute wealth – but we already do that – if we had a flat rate income tax (excluding the distortion of the personal allowance, NI and benefits) – you earn 20% more you pay 20% more. Plus you completely ignore the possibility that a simple tax system / lower taxes can promote growth and reduce evasion and could increase the overall tax revenue which is surely a win – win.

  161. 23/08/2012, Boris MacDonut wrote

    And so we see Gideons bitter pill policy is simply not working. Never was going to. Get spending and tax the rich.

  162. 02/10/2012, Barkingmad wrote

    “Get spending and tax the rich.”

    You mean run up even more debt and try and tax people who are already paying a huge proportion and can most easily avoid paying more tax?

    Government spending is typically poor at creating growth – perhaps we should drop taxes (across the board), encourage growth, investment and extra cash in peoples pockets would let them spend more across the economy as a whole.

  163. 21/11/2012, Toon1414 wrote

    If it’s not what Parliament intended then change it to what Paliament did intend i.e. attention to detail. Don’t complain when it’s legal … Directors are obliged to do the best for the Company and not what’s best for the Treasury!

  164. 05/12/2012, Boris MacDonut wrote

    #162 Yes . That is exactly what I mean. Couple with a rigourous attack on the Big four accountancy firms.

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