I gather that those who have asked the Church Times for a right to reply to the extraordinary article they published last week endorsing tax avoidance have been told that won't be allowed. I'm not surprised. The Church Times has a history of supporting tax abuse that does it and the Church of England no credit - and shows how far it remains captured by a social elite dedicated to maintaining and increasing the social, income and wealth divides in the UK.
In that case it is very unlikely that they will publish my riposte either as it's longer than a normal letter so I'll publish it here instead:
Sir
I note Simon McKie's article 'Is tax avoidance wrong?' in which he concludes "tax avoidance is not a significant threat to government revenues, and is not immoral, but rather is the sign of a morally healthy tax system".
I was tempted as a long term campaigner against tax abuse, whose work has been motivated by my Christian conviction, to simply ignore such absurd claims and let Mr McKie be judged by popular sentiment, which so very clearly now disagrees with what he says. But then I noted that Mr McKie derides the 'public clamour' that has led to demands for a general anti-avoidance rule in the UK, which clamour I have helped create, and realised that the view that Mr McKie puts forward does have to be challenged.
It is extraordinary that anyone who knows anything of tax, and who makes appeal to morality, can argue as Mr McKie does. He knows, as I do (for I, like him, am a chartered accountant) that the term tax avoidance does not, as he suggests, apply to simple situations where the law says tax does not have to be paid. Tax avoidance is the act of deliberately seeking to get round the law as parliament intended it should apply by seeking loopholes in that law that can (usually) be linked as part of a string of events that mean that one of four things happens. The first is that less tax than expected is due. The second is that if tax is paid it is due by an unexpected party to the transaction giving rise to it e.g. a trust or company who seem to have little economic relationship with the event that should have been taxed. Thirdly, the profits arise in an unexpected location (usually a tax haven). Finally, the tax is payable somewhat later than anyone might reasonably have anticipated. These are the goals of tax avoidance.
Now, of course Mr McKie is right in part; to be tax avoidance all the shenanigans that are put in place to achieve one or more of these goals have to, in themselves, be legal but there is not a reader of this paper who does not think that some things that are strictly legal are also morally unacceptable. Christians do not accept that the law is the ultimate moral arbiter of what is right or wrong. And how could anyone think it was moral to spend one's time seeking to undermine the will of a democratically elected parliament by deliberately seeking to get round the law? And yet that is exactly what tax avoiders - and most especially the rather limited and aggressive form of tax avoiders that the general anti-avoidance rule that the government is proposing - do with their time. This activity of undermining democratically endorsed laws is what Mr McKie is saying is the sign of a healthy tax system.
In the process, and by relocating transactions to places and people not really involved in them, those who undertake tax avoidance engage in a form of deliberate deceit. In doing so they usually go to great lengths to cover their tracks - for such is their sense of morality that the last thing they want is that they be discovered tax avoiding - and in the process they ignore or reject all the principles of transparency and accountability that underpin trust in the market place and between citizens and their government. This is not neutral behaviour: there is consequent cost for all us in the form of additional regulatory obligations imposed upon us all.
Perhaps worst of all though, by engaging in a form of competition based solely on the ability of companies to get round the law rather than to concentrate on supplying the goods and services that we in the market place really need those engaged in tax avoidance undermine honest companies who want to pay their dues but lose out to those who cheat. Again, this imposes cost on us all. This form of competition is necessarily destructive and short term and therefore tends to do greatest harm to those companies who take a long term view, who invest in the economy, who train staff and who develop products to meet social need. We all pay the price of that, not least through increased unemployment, a loss of international competitiveness and through higher long-term prices.
Simon McKie worries we might suffer more tax evasion in this country if we crack down on tax avoidance. He ignores the fact that by my estimate we already have £70 billion of tax evasion in the UK each year, a process aided and abetted by our tax authority losing half its staff in a decade. But that's not the most worrying aspect of what Mr McKie has to say. What he calls moral is what most in this country now see as an attack on the fabric of our society by a tiny elite of tax professionals that has the sole aim of making the rich in this country richer at cost to all others who live here. That's very hard to reconcile with Jesus' claim that he came to deliver good news to the poor. That's the last thing tax avoiders do, and that's why it is so troubling to find them getting such prominent space given to them in the Church Times.
Yours faithfully
Richard Murphy
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Richard, not being religious I know nothing of the Church Times (except that it exists, as I used to deliver copies as a paper boy many years ago) so I read all of your blogs on this subject with great interest. McKie’s argument is such a blatant example of moral and ethical bankruptcy that I can fully appreciate why you and other Christians are so outraged – as indeed should any ‘right thinking’ person. But what I find so amazing – and quite disturbing if I’m honest – is that given what happened with St Pauls and the Occupy movement the Church Times should: a. have published this article, and, b. should deny a right to reply. Having taken this position it’s almost impossible to conclude other than that they fully support the social and economic consequences that flow from forms of exploitative and abusive behaviour such as tax avoidance, one of which is the increasing degree of inequality in this country and globally. Pretty astounding!
I agree with your conclusion.
Astounding indeed Ivan – though to be honest I’m not totally surprised and, sad to say, think you’ve hit the nail firmly on the head.
An excellent letter Richard. I hope it gets the publicity it deserves.
It is not only Christians who should be outraged by Mr McKie’s extraordinary views, apparently endorsed by the Church Times, on what is or is not moral in this context. Those who hold other religious beliefs and those who, like myself, hold none can and do also have moral values which are totally incompatible with the arguments put forward to defend the undefendable. The refusal of the Church Times to publish dissenting views is telling.
Richard, your suggested letter contains the following: “…those who undertake tax avoidance engage in a form of deliberate deceit”.
Such an assertion, which claims a link between tax avoidance and deliberate deceit, is more likely to be identifying a class of behaviour falling within the category of tax evasion and not the category of tax avoidance. HMRC would welcome responding to what you refer to as tax avoidance if it involved deliberate deceit. To begin with it would not in your terms “legal”, under any tax code, deceit is never legal.
It is a pity that you link deceit with tax avoidance, unless that is deliberate in which case you are labelling a category of behaviour as tax avoidance which many other commentators (because it is deceitful) would consider to be tax evasion.
Based on this assertion alone it would in fact have been misleading to its readers if the Church Times did publish your letter in its present form. Perhaps the writing of the letter was rushed but at present its contents respond to a “man of straw” (there will not be many that consider deceit to be moral) not to the heart of the extracts from Simon McKie’s article that you quoted.
Deceit is legal
It goes on daily, legally, in tax havens
Please do not deny the obvious truth
Even if HMRC find out no one else does – and that was my point – as the letter makes clear
And I am emphatically right about it
And you are being deceitful – or rather, and candidly, blatantly dishonest about it
Richard, you are surely not claiming that in the context of a tax code deceit, say for example, the UK tax code is legal? Deceit does exist, in tax havens and in many other places but in the context of the UK tax code you cannot surely believe such deceit to be legal?
However galling it must be to you, just because you believe that you are emphatically right does not make you right and certainly does not make deceit legal in the context of the UK tax code, whatever goes on in tax havens. Deceit is deceit … period.
I definitely deny the truth that deceit is legal, but of course given your response to my comment you might simply be saying that deceit happens … which is stating the obvious.
I thought you had a fundamental principle on this blog, “play the ball not the man”. Why label me “deceitful” or “blatantly dishonest”? If anything the statement (not you,I am playing the ball not the man) contained in your letter is misleading because it claims that persons engaged in tax avoidance behaviour are engaging in “a form of deliberate deceit”. A very odd understanding of tax avoidance. If there is deceit there is a measure of non compliance … a measure of tax evasion … not tax avoidance. You have indicated this many times. There is absolutely no need for this statelment appear in a response to Simon McKie’s article. It simply misleads the less informed … surely not something you would wish to do.
Read what I said
I said people hide the fact that they are tax avoiding
I did not say they are hiding it from tax authorities
I was making clear they are legally compliant – and know they are morally wrong
Tax havens are a key component in that
Is it really so hard for you to see that?
Precisely because you have stated an untruth as a straw man I labelled you as I did
I think correctly
That’s playing the argument – not the man
And anyway – you’re deceitful enough to not even admit who you are
I rest my case
Richard, what you do with such a reply is demonstrate your inability to be consistent at a point in time, to reason sensibly and to articulate a relevant response. This is a shame as some people read what you write, believe what you say and perhaps even consider that it contains a measure of truth.
Oh dear what must go on in your head for you to have such a high opinion of yourself!
As is often said, “the truth will out” and it will eventually be realised that you indeed are a man of straw, a man of little intellectual ability who engages in what could possibly be described as “deliberate deceit” but cannot engage with any questioning.
I really do not know why you do it, it either pays well or you get off on it (or both). Perhaps it is the excitement of your TV and radio appearances?
By the way if you did rest your case on a similar level of argument in a court (ie those that engage in tax avoidance engage in deliberate deceit) even Lord Templeman would have thrown your case out (you even misrepresent his veiws on the nature of tax avoidance).
I rest my case.
What a very strange reply.
As a matter of fact people are deceitful about their engagement with tax avoidance.
Let me offer a simple example. Apple and Microsoft both make many sales from Ireland but do so from unlimited companies so that no one knows what they are doing there.
There is no doubt they are avoiding tax in Ireland
And there is no doubt they are hiding the scale of it
This is what I meant
This is what I said
I think it is true – the choice they have made must be for this reason
Respectfully – you may be desperate to exonerate tax avoidance – but as usual, I am consistently and completely transparent and consistent, and evidence based
You ask why I do this.
It’s very simple. I want to help those worst off, in this country and in other countries.
You may not wake up each day angry at the injustice most face in their ordinary lives, but I do
It’s motivated by the only honest interpretation of Christ’s teaching that he came to deliver good news to the poor.
With respect – that in my opinion makes it impossible for someone of Christian faith – let alone a minister – to write or act as Mckie did, or as Will Morris as chair of the CBI tax committee – or as Stephen Green did at HSBC. Their actions are clearly designed to oppress the poor at benefit to the rich and I call that a sin.
It also makes the deceitfulness of your commentary – and your lack of willing to be accountable for it – a sin as well
It’s up to others whether they believe the honesty of that statement and the honesty of what I write. All I know is I am easy with my conscience.
“With respect — that in my opinion makes it impossible for someone of Christian faith — let alone a minister — to write or act as Mckie did …”
Well said Richard. I have long held a similar opinion and am always at a loss to understand how people who profess to be Christians can reconcile that with ultra-liberal right -wing views in general. But apparently they do.
“I really do not know why you do it, it either pays well or you get off on it (or both)”
If he really does not know why people do things with no thought of reward.it is obvious that he has never done anything of use to mankind himself.
“…. the term tax avoidance does not, as he suggests, apply to simple situations where the law says tax does not have to be paid. Tax avoidance is the act of deliberately seeking to get round the law as parliament intended ….”
Surely the reality is that the phrase “tax avoidance” applies to both simple situations where the law says tax does not have to be paid and more complex scenarios where individuals deliberately seek ways to get round the law in ways that parliament didn’t intend. If you open an ISA you will “avoid tax”, therefore this must be “tax avoidance”.
I would suggest that you are talking about “abusive tax avoidance” or “aggressive tax avoidance”.
It is absurd to claim that making use of an entitlement that parliament enacted with the aim that people use it be called tax avoidance. It clearly is not.
That is why I use the term as I do
I always have a very strong suspicion that those who suggest what you do want to deliberately obscure the issues bu suggetsing unethical activity is little different from using an ISA. The suggestion is absurd which is why I will not use language in that way
Glad to see all this reported in the Morning Star today. Has it been reported elsewhere, do you know, Richard?
I have not seen it anywhere else
Shame really
Richard
I find it quite offensive that someone of those “right wing liberatarian” views chooses to use the name of one of the Church fathers. He must know that the original, African, St Augusine would have found everything he says profoundly offensive.
Particularly as the original, African, St Augusine trained as a lawyer & repented !
Working on this neo-St Augustine, if he dare claim that term, & more fool him if he try;
“Such an assertion, which claims a link between tax avoidance and deliberate deceit, is more likely to be identifying a class of behaviour falling within the category of tax evasion and not the category of tax avoidance.”
I suspect Richard is identifying rather accurately that which happens rather than that you’d want to happen. Put simply, it is not enough for the Tax Advisor to say “Tax avoidance is legal. What I do is Tax avoidance. Therefore it is legal”.
HMRC would welcome responding to what you refer to as tax avoidance if it involved deliberate deceit.
“In the highly unlikely event that HMRC found out about it, I daresay it would. Since, as we all know, HMRC lacks the capacity to identify such deceit, this is rather a pointless statement.
To begin with it would not in your terms “legal”, under any tax code, deceit is never legal.”
A statement of the blindingly obvious which furthers my opinion that you, of all people, don’t deserve to take the name of Christianity’s first great philosopher, even in jest.
http://www.religionnews.com/politics/government-and-politics/paul-ryan-to-get-another-earful-on-his-catholic-budget
Not saying we Romans are perfect but at least we try …