From the Press Association:
Bank of England governor Mervyn King has surprised trade unions by describing the huge banking bailout as "unfair" and has appeared to sympathise with calls for multi-billion-pound tax evasion to be tackled.
Mervyn King tackling the tax gap?
Yes he did. The PCS President asked him whether he thought that the government should tackle the tax gap – yes, that’s the tax gap I calculated for them.
His answer was careful. He said tax was not in his remit as governor of the Central Bank. But he did say the data was “impressively presented” and the argument “sounds persuasive.”
I am far from alone in thinking this was a clear message of support for tackling this issue.
Michael Crick of Newsnight spoke to me afterwards (but I won’t be on). “Why is the tax gap the theme of this conference?” he asked me. “Did you coordinate it?”
No, I didn’t.
But as I wrote earlier today – the tax gap is a symbol of the insanity of cuts and the politics that is driving them.
It’s one of the narratives that will be heard time and again over the years before the ConDem government fails because even the Governor of the Bank of England sees the logic of it.
Read more 
the tax gap,or evasion,has no connection with the ‘insanity of cuts’.The first has been around for years,4o percent is too high,and the second is merely an opinion that is not shared by the governments of ireland, greece, spain ,france,germany, to name but a few.If you want to increase tax revenues,CUT the top rates, remove the deductions, simplify the 4300 page system and watch the money pour in.
I think there was something going on in the European Parliament today, a Hearing and papers being presented but am not certain about the full picture.
@william
Every word of what you’ve written is unproven ideological drivel
There’s not a shred of evidence to back it
And where flat taxes have been tried they’re failing
The WSJ put it like this tonight:
Mr. King also sparked laughter and applause with his response to a delegate’s proposal that the government close tax loopholes, take decisive action against criminals engaged in massive tax evasion and increase rather than reduce the number of staff involved in doing so.
“The way you put it makes it almost irresistible that one should agree with it,” Mr. King said. “I fear I have to say that this is not the responsibility of the bank… But I hear your points and they sound persuasive,” he quipped.
@william
OK William let’s start with where we agree. Removing deductions, Richard has argued for this when dealing with higherrate payers. Simplification, yes. One of the advantages of a general anti-avoidance rule is that it should dispense with the need for reams of detailed anti-avoidance legislation.
Then I think you move into Laffer curve territory though you are coy about calling it by its name with your reference to reducing tax rates and thus increasing revenue. The trouble with this is that whilst it is obvious that some such curve exists because 0 taxes bring in zero and 100% taxes must bugger everything up and the optimum point is omewhere in between, no-one has shown how to calculate where that point is. Is it 40%, 20%, 60%? Merely citing “Laffer curve” to mean “Reduce Tax Rates Now” is simplistic.
re ‘unproven ideological drivel’, and the laffer curve.A better tax system would have VAT at 25 percent, no tax or NI before £200 a week,uprated benefit payments to compensate for the increased VAT,no deductions that keep an army of tax accountants employed, and a planned move downwards in the top tax rate over time.
@william
Please see http://www.taxjustice.net/cms/upload/pdf/AACA_flat_tax_report_-_JUN_2006.pdf
I think I say all that is needed there
Look ,Richard, I was not advocating a flat tax system in the first place.My general proposition is to reduce the number of tax payers by removing the low earners completely ,which will more than compensate their increased VAT outgoings. The increase in VAT thus falls on the middle and high income groups, who are the people with discretionary expenditure.Ignoring the employment of jobbing builders, VAT is easy to collect and hard to avoid, unlike income and capital taxes. Our present system includes confiscation by the state of half the top earnings of people who work and succeed, and very little of people like me who enjoy a very satisfactory life style.So what if I pay VAT at 20%, it is just a joke.The present system kicks the bottom 20 %in the teeth.I would ‘work’ for tax purposes, if the state left me with 60 % of the top slice. It does not.
@william
“Easy to collect”
Is that why HMRC says VAT has the biggest tax gap?
Richard, less income tax payers frees up more HMRC staff to collect VAT. The euphemistic tax gap exists because the present absolute level of tax and its complicated and unfair incidence has no legitimacy.
@william
Please stop the wishful thinking based on no evidence at all
Sorry – this is commentary without any evidence base
Richard, you assert the evidence is on your side.This does not equate with alevel of public spending, hence your view of’the insanity of cuts’,that is demonstrably not financed by tax, in part because of the tax gap(ie. people won’t pay).If you do not think the budget deficit, as outlined by Jeff Randall, is unsustainable, then carry on into oblivion.For the rest of us, we have to accept a LOWER level of public spending and a simple, functioning tax system that has a minimal tax gap because it has consent. The evidence is against you, not me,compound interest makes more spending reductions vital, and the tax gap reinforces the case for tax reform.
@william
If we get to the level of “Jeff Randall says so” we’re in Fox news territory
I have documented extensively why you are promoting a wholly destructive, class based, dogma driven myth
You can read it at your leisure
I won’t repeat it here
Suffice to say – I think you profoundly misguided
And Randall is too
Richard, final post.Do you exclude the argued views of any commentator employed by somebody you dislike?’A wholly destructive,class based dogma driven myth’.I thought you stuck to evidence, which is what I learnt at both of Keynes’s alma maters.I refer you to, for instance,Economics of Destruction(jeff Harding.daily capitalist, 17 sept).Were Darling’s proposed cuts insane?An extra £40 billion over 5 years is no big deal, just a message to the markets(a point the Irish took on board).Brown’s grandiose public expenditure was the main cause of this mess,and as it is put right I want to see a new and lower tax regime that exempts the bottom 20 percent from income tax,and NI.Is that a classed based aspiration? Res ipsa loquitur.
@william
Of course not
As Keynes said “In the face of new evidence I change my mind”
You presented no new evidence
The old evidence you presented is wrong
And yes – Darling made a complete hash of his fiscal reduction plan – as Ed Balls also now says
Most of the losses according to HMRC are either from a failure to register or from missing trader fraud. Apart from that VAT is fairly simple to administer and collect.
@Alex
Non registration is the shadow economy to which I repeatedly refer and which you deny exists
You massively overstate missing trader fraud
Why not try telling the truth or at least engaging your brain?
This comment has been deleted. It failed the moderation policy noted here. http://www.taxresearch.org.uk/Blog/comments/. The editor’s decision on this matter is final.