I'm on You and Yours on Radio 4 at lunchtime discussing tax avoidance and abuse.
Martin O'Neill is introducing the philosophy of tax, and tax abuse on the programme, and that' sure to be good.
Eamonn Butler from the Adam Smith Institute is opposing me, and that's bound to be bad.
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Three rhetorical questions. First ask Eamonn Butler about the Duke of Buccleuch and the benefits of patronage for Adam Smith. And then ask him when he thinks Adam Smith is going to get around putting citations on the works he ‘borrowed from’, because we know he’s not a plagiarist. And then ask Eamonn Butler about the Theory of Moral Sentiments.
Didn’t Adam Smith eventually turn on his own ideas?
No – but what many claimed he said is a parody of what he actually wrote. There’s a t last as much for the left as the right in Smith.
But let’s also remember – he is a dead economist and none of us need to be enslaved by him. Much of what he wrote is also simply inappropriate now.
TAX AVOIDANCE AND ABUSE
Which of course centres on the City of London in synchrony with its flotilla of three floating factory ships anchored off-shore the coast of Britain secretly reprocessing the gargantuan mound of cash sewage created by a select group of gluttonous skunks.
Ship to (off) shore radio exchange crackles with delight as even more complicated structures are fabricated to hoodwink and swindle the dwindling number of dispirited HMRC inspectors who are charged with torpedoing this despicable pirate fleet.
Good luck Richard.
Tell them as it really is!
Great comment! Maybe we in the UK should collect and dump our actual national sewage in the seas around these islands, do you think that might get the message to them?
Well, I imagine you’re tired of being intellectually destroyed by Tim Worstall everytime you open your mouth; so it must be refreshing to let somebody else have a go.
If proposing cheating is making an intellectual argument then Butler made one, but I’d beg to differ on your intellectual premise
I hold no candle for Eamonn Butler because the name of Adam Smith should not be used to promote free market capitalism. And on my intellectual premise; you rarely respond to Worstall’s denunciations. You make your point, he rebuts you, and you ignore it in perpetuity. You have your fanboys here who, in the time honoured tradition of the Left have made you a secular god, and will never accept anything Worstall stays, but I go through both blogs avidly. Now it’s time to engage. Look forward to seeing you sir!
I won’t be engaging with Worstall – why waste a moment of my time on a pedant who shows no understanding of the realities of life – just the mantras of economic theories that come nowhere near explaining it, and never will?
@Josh
Sorry to disappoint you but you are mistaken in believing that those who support Richard’s values (as you sensitively refer to as “fanboys”) are all of a left wing tendency… Tax Research UK values are universal and garner support from many political creeds. I know for a fact that several of his dedicated “contributors” subscribe to the Daily Telegraph — and horror of horrors one was recently seen on the back of a horse, although I am reliably informed that there were no foxes involved!
Clearly Richard’s views are left of centre — but he keeps a broad mind that considers all opinion. Except perhaps those of Mr Worstofall.
@Josh – re: “Now it’s time to engage. Look forward to seeing you sir!”
Is “Josh” Worstall in disguise? Is is just a coincidence that “Josh”‘s rambling tirade came in the wake of Richard’s stellar performance on You and Yours today?
I think it was actually posted in anticipation
Haven’t checked whether it’s really Worstall – and wouldn’t waste my time doing so either though it’s not hard to do
I genuinely thought you were being sarcastic. Even I’ve shot down a couple of Worstall’s comments on this blog. He was somewhat “economical with the truth”. And his comments on other blogs weren’t any better.
Tories hate meritocracies: they can’t survive in them.
The ASI? Ask him how he squares his beliefs in the ‘free market’ with the reality of today’s financial sector capitalism, which would no longer exist were it not for the state he so despises bailing it out. I might well try and catch the broadcast on the iPlayer this evening to see him try and justify how his doctrine has worked out in practice.
Well done Richard. A tough timescale, but I think your point came across very clearly! And I think most of the phone-ins agreed with you.
I have to say that Mr Murphy was on quite a bit of a roll in the closing stages of the show. Our National tax issues nicely tidied up in a quick, slick, clear and concise 20 seconds or so.
Actually it was well nearer 70 seconds.
BBC Radio 4 You And Yours: Available To Listen:
http://www.bbc.co.uk/iplayer/console/b0194mvv
The whole programme is well worth listening to for anyone who cares about tax and how our society is able to operate.
Go to 50:00 though, for a nice lesson in getting the last word in a radio interview – and don’t leave any room for your oppo to reply!
I’ve just listened to it
I admit I hadn’t realised quite how effectively I filibustered him out of the programme! But I admit I enjoyed it
Hi CharlieB. Is that a link that allows you to download to an MP3 player? Would love to listen to it. From what I’m reading in the comments, it sounds like Richard creamed the opposition.
Richard, you are being modest! The closing comments were hardly filibustering – read the last sentence of my first post.
Actually, perhaps it would have been nice for there to have been time for a reply. I think then we would have heard only fluster and bluster.
Anthony, there is a copy of the mp3 here:
http://www.mediafire.com/?rvnmnl5sblxo590
As a shareholder i would expect my company to make the most of any loopholes and tax havens to maximise profits for me and the country.
the spurious argument that by collecting all this so called ‘LOOSE’ tax we could have all the hospitals, police, schools, welfare is rubbish.
I am with Eamonn here, less govt, more freedom to choose and privatise the NHS fast
I will also raise the question of the silly bribery legislation, which ties companies up in compliance and stops us doing business overseas.
if it take a lunch and drink etc to get business for the UK let’s do it!
Bah Socialism!
I leave others to comment!
I suggest you emigrate to the US and live in a gated community so that you do not have to face the social consequences of your ideas. Another suggestion might be a developing country where there is little tax revenue to speak of and poor people have to pay for their healthcare and education and people in their twenties die because healthcare is almost nonexistent.
Thank heavens that not many people share your selfish view of the world.
Respectable shareholders in properly constituted UK companies require the directors to act within the law and behave to a standard that is morally and ethically acceptable. This includes paying the tax expected by the democratically elected government to spend in a way that benefits both the economic AND social development welfare of the country.
Instead of taking pride in being a tax dodger.
HMRC is desperately short of resources and training to compete with the ever increasing complexity of tax avoidance vehicles dreamt up by the City and enacted on the Isles of Man. Jersey and Guernsey. It needs more power and not less.
When do free drinks and lunches end and become bribery?
Bribery and enticement are criminal offences
A privatised NHS would end up in the same mess as the railways.
May look good to some — but inevitably a disaster for both doctors/nurses and patients.
You obviously don’t wish to contribute to the welfare of the UK – perhaps you should consider moving to a single party state – like Burma or Cuba — top business people go down well there. Or get shot.
“…paying the tax expected by the democratically elected government to spend in a way that benefits both the economic AND social development welfare of the country.”
NAO reported that Whitehall overspent 31 billion in two years – are you surprised that some people take the view that they would rather see money in their pockets than in the state coffers where a lot of it is wasted.
And as for the “complexity of tax avoidance vehicles” – have you considered that the complexity of the tax laws allows this to happen – and after all, HMRC write the legislation so they do have the upper hand in this battle.
So business can crash the economy and you don’t care
But government makes much smaller mistakes and you do
Ever heard of dual standards?
Sorry, “Sandeman”, but it sounds as though you’ve come to comply with the classic definition of a cynic, one who knows the price of everything and the value of nothing. No wonder you end with an echo of Scrooge!
But remember, when Scrooge finally woke up from his choleric, and self-hating trance, he realised there were things of greater value than “profit maximisation and shareholder value” – love, family, friendship, caring for one another though mutual help and support (our NHS being a prime example of this, so hands off, private pirates and other thieves!), helping others to make their way (education – REAL education, and not Mr Gove’s sad imitation of the same, which is really only a smash and grab raid by a centralising ideologue who knows nothing about education), and that REAL business success depended on integrity, honour, quality and real customer service, and not on trying to screw every last penny out of his workforce and clients and customers – that being the reality behind “profit maximisation and shareholder value”.
Maximising profits? Alas, no – maximising the rip-off for the parasite economy is what we’ve seen in reality, as observed by the Progressive Christian Alliance website in the USA, I quote “People who dismiss the unemployed and dependent as “parasites” fail to understand economics and parasitism. A successful parasite is one that is not recognised by its host, one that can make its host work for it without appearing as a burden. Such is the ruling class in a capitalist society.”
I have a little difficulty with Sandeman’s contention of making profit for the country. Obviously profitable companies contribute and “maximising profit” where there is a clear addition to the country’s wealth e.g. a factory, is one thing. But it can be another when it involves the destruction of other economic units. Supermarkets new to the town, boast of ‘creating jobs’ but often they force the closure of family businesses which offer real service and the jobs are high pressure, low wage.
Also, some profits are lost overseas. I heard the radio 4 programme today and the astounding contention that tax havens are a useful balance to governments who tax ‘too much’.
What people like Mr Sandeman don’t realise is that if companies claim the right to dodge tax and find every loophole, then so will every other individual. And if that happens our whole standard of living will collapse. We’ll go back to the days of if you’re born into the ‘right circumstances’ you’ll have education, health etc. While the rest rot.
Your profits are NOT greater because you’re directly paying the tax that the company should have paid. And the country’s profits are NOT greater because it’s deprived of the tax revenue. Sheesh.
I thought Mr Butler exposed himself superbly. We should hear much more from him and his like.
Interestingly the first phone-in contributor, a retired tax specialist, condemned the whole “tax dodging industry” and cited the Isle of Man as a major platform providing artificial tax and NIC avoidance vehicles which bend the law in a way that was never intended.
Eamon Butler’s response in defending tax dodgers was quite astonishing.
He argued that allowing large companies and wealthy individuals to avoid tax placed pressure on the UK government to spend ordinary tax payer’s money more wisely. And that powers and funding of HMRC should be reduced to allow large companies to use tax havens to further exempt them from financing education, health services and other amenities vital to the UK’s social and economic growth.
Which is another way of saying that anarchy is a suitable alternative to democracy — and only serves to emphasize that the more tax havens are protected/defended the more their inherent evil becomes apparent
Any semblance of Mr. Butler’s credibility was finally destroyed when Richard pointed out that the UK is a civilised parliamentary democracy and people have the opportunity to elect the government which (in their opinion) spend taxes the wisest.
Brilliant Richard — fascinating listening!
Great contribution Richard, thank goodness you demolished Butler’s argument about the ‘benefit of flat tax’. I just hope that the programme had a wide audience because it certainly gave you a wonderful platform to express your views.
“Martin O’Neill is introducing the philosophy of tax, and tax abuse on the programme, and that’ sure to be good.”
The Sunderland manager? Sorry, was just too good to resist! 🙂
That’s his sideline – didn’t you know. Often mentions it at half time I’m told. Get’s them going. Works for me! 🙂
Just listening back on iPlayer now… the woman on first who was a retired tax accountant was fantastic! On the pro-flat tax side of the debate, one guy said that 51p in every pound of tax collected is spent on administration… WHAT THE HELL? That’s just ridiculous. Great to hear Martin O’Neill on there… he was superb. As was Richard. Also I liked the suggestion of the woman who said don’t shop at companies who move their head offices abroad… excellent idea for direct action as False Economy have been saying for many years.
It was also good that the BBC was getting a lot of feedback saying that HMRC was understaffed and under-resourced, and so couldn’t do the job properly at the moment. That’s a huge issue, and things are getting worse.
Eamonn Butler and the ASI are batting on a bit of a tough wicket at the moment because with flat tax they are arguing that the 99% should pay more and the 1% should pay even less… and in the current circumstances of collapsing median incomes that’s a tough sell, as even Dave Cameron has now recognised.
Had a really good chuckle at the lady (apartheid oranges!!!) who doesn’t shop at Boots any longer. Now she goes to Superdrug which is owned a Hong Kong conglomerate (which pays absolutely zero tax on foreign earnings).
It’s nice to see Richard Murphy has not lost the art of being a charmless turnip. You don’t engage with Worstall because he destroys your arguments without any effort whatsoever. Line by line analyses of your blogs are posted there nearly every day. I am not Tim Worstall; I am simply an enemy of the left.
Respectfully, I am aware of Worstall’s personal fixation.
I’m equally aware that he hates most on the left, but that he has a particular delight in my work.
And I’m also aware of his, literally, pedantic skills.
But being a pedantic user of a method of critique that is itself fundamentally flawed, as neoliberal economics is, does not mean he wins the argument, it just proves he’s wasted a great deal of effort learning a methodology that has little or no relationship with the real world. For me to engage with him would mean I diverted my efforts into that same erroneous methodology for no net gain to me or anyone else – which is, no doubt, what he wants.
But let’s be clear – he just wants to prove me wrong by his own standards – as I readily concede I am – subject of course to the point noted that since those standards are false being wrong is a virtue. I, on the other hand, want to change the world. His is a mighty small ambition of someone who appears to me to have ambition driven solely be personal malice. I have ambition driven by concern for the majority people of this world who I would like to have a better deal from the economy. Why be reduced to his level of malevolent debate when there are so many better things to do?
That’s why I ignore him.
listened to this on iplayer. I suppose the most interesting point coming out of the phone in was the complete lack of appreciation by the participants phoning in of what actually goes on in the field of tax planning.
your point about the amount of volumes in CCH/Butterworths was lost on the audience I think (presumably as they dont appreciate how small the text is).
It’s also utterly irrelevant to the debate
I too caught up with this on iplayer and thought you dispatched Butler with ease.
Butler was ranting incoherently about the conspiracy of big government by the end having lost all attachment to reality, and more importantly all credibility.
Thought the retired tax accountant – the first caller – was superb and a great intro for your own arguments Richard.
Have just relistened to the broadcast to make sure I’d heard it right the first time around. And yes, I had: Mr Butler sees tax havens as open and transparent places which serve as an “essential safety valve” and put pressure on governments to use their (reduced) tax income more efficiently. What an extraordinarily twisted view! But then it became progressively clear that Mr Butler is much more of an anarchist than a democrat. Richard hit both nails firmly on the head with his resounding demolition in the closing moments – masterly.
You got Butler right
And thanks for your kind comments
I’ve just listened to the programme on i-player and would like to add my congratulations to the many others Richard. Butler was left struggling for a starting point.
The line of argument which I still find astounding is how a flat tax would sort it all out. How is that going to work? Is Butler seriously saying that if we set corporation tax levels to the same as income tax levels then all the tax avoiders would happily smile and hand over the cash to HMRC? The issue surely is one of secrecy and non disclosure and it doesn’t matter what the tax curve looks like for that. Have you done a dissection of the flat tax anywhere?
Interesting comment from an IOM-based accountant on fears over the possible introduction of a GAAR:
“KPMG island director Greg Jones said it was by no means a foregone conclusion that we would get a general tax anti-avoidance rule (GAAR) in the near future.
But he added: ‘If we did, however, there’s no doubt that it would impact negatively on places like the Isle of Man.
‘Even if the GAAR were targeted as narrowly as the working party report recommends, in my view it would strike out a number of (what has to be admitted are) fairly contrived tax planning arrangements I am aware are promoted from the island.
‘There may be some work for tax practitioners in advising whether a particular planning idea falls within the GAAR’s scope, but on the whole I think we’d lose a certain amount of the business currently being undertaken by some niche service providers.’ ”
http://www.iomtoday.co.im/news/isle-of-man-news/fears_over_new_tax_threat_to_isle_of_man_1_4119347
Meanwhile, the Manx government continues to promulgate the myth that the island is an open, transparent and fully compliant jurisdiction. I suspect Mr Jones may not be too popular with his Chief Minster. Hey ho!
PS. Wasn’t sure where to post this – the recent explosion of blogs here makes it difficult to choose (and possibly more appropriate ones are now closed to comment). So hope it’s OK here.
Thanks for this – I’m doing a blog based on it now