Early in the morning, on a train to a London, I ask myself why I do this. I am not alone in doing so. It is a question I am asked, often, by friends, those who disagree with the conclusions I reach in my work, academics (there is at least one study of the tax justice movement going on right now) and journalists.
One consistent answer I can give is that I have no choice; it appears that tax justice is my vocation and I suspect I will now campaign for it as long as I am able.
But that does not explain why. But that is also not difficult to explain. When I was 11 I was politicised. I went to a grammar school and my twin did not. At that moment I became aware of the arbitrariness of injustice. I have never forgotten it.
Around the world I see daily evidence that people of good fortune are not aware that it is little more than luck that puts them in the situation they are in. It may be an accident of where they were born, who they were born to, who they have met or chance within the life choices they made. Few people, as should be glaringly obvious, get to positions of prosperity and power without considerable assistance along the way and yet many deny it.
Worse than denying this though, many use the position they have reached to deny to others the fortune that they have enjoyed. Austerity is an indication of that. An unnecessary policy, it has not been pursued for economic goals but social ones. The intention has always been to divide society, and that is what it is doing. In the process it has and will make the least well off in this country poorer, economically, socially and culturally (because that is what the ostracisation inherent in it is intended to do).
Tax justice is intended to level the playing field. It has a bias to the poor within it, not by chance, but by design. That's not to say it is opposed to wealth creation. I am not. What I am in favour of is the responsible allocation and use of wealth in the interests of all in a society. That is the sign of a healthy, moral economy as well as being the foundation of the economic integritation that is essential for mutual prosperity.
I look around the world and do not see that healthy moral economy. It is not in most of our political parties' economic policies. The ECB's refusal to tackle Europe's economic crisis yesterday was another indication of its absence. That growth is being celebrated when only a few are benefitting is a further sign of the malaise.
Tax cannot solve all of these issues, of course. And yet a country's tax system very definitely reflects its moral values. This is the charge against tax havens. It's the charge against a government that cuts taxes for the best off and large companies when cutting social security for the vulnerable.
I am on this train now because I believe there is a moral economy but we have not yet released it to deliver the well-being we can all share.
And now it's time for a nap before getting to London.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Why did your twin not go to the same school as you?
Was this a decision by your parents? Was there an admissions test or other criteria which you passed but your twin did not?
The 11 plus
Did it work out bad in the end? No. You’ve done well and I’ve said before, I’ve listened to Jonathan and he’s definitely in the right profession.
Jonathan is a great guy and a great broadcaster and I’m proud he’s my twin
But I can assure you the pain was not worth it
Political parties only peddle views that will help them to get into power.
If more people want less equality then the would write to their MP’s and tell them what their views are.
If any party says over the next 14 months that we should tax everyone and give it all to the poor. At the same time we should borrow as if there is no tomorrow. Then we shall see who votes for them.
In reality every human in the UK is out for themselves. They need or want to do better than their neighbours. They need a new car, bigger house and whatever they can get from the high street. Brands are bigger now than they were 30 years ago. This is something we have learnt from the past 10 years credit bubble.
I would hope you know just how absurd and wrong you are
I fear you don’t
Mike
I think what you say is fair, but it isn’t reasonable or, even, possible, to follow the conclusion “people are selfish, greedy & stupid” therefore we will all fall into the abyss.
It would be lovely if people would adhere to religious teachings or even plain moral platitudes, & wean themselves off personal wealth.
If they won’t then someone is going to have to take action to prevent a small number of people @@@@ing up the world we all live on. Will that mean forcible confiscation of assets ? Yes, probably.
It’s what you have learnt, I have never believed in the greed culture, I know it destroy human beings.
I would like to thank you, Richard for taking on these issues .
I hope that more people can find voice to act against these invidious forces or at least to begin to see the problem with greater clarity.
Logically, as things stand right now they will continue to evolve into a world owned entirely by the super wealthy, and inevitably undermine democracy and human rights, human dignity and more, in every nation, as we have witnessed..
Clearly, the rights of citizens ( and we need a world citizenship here too I think..) society and justice can increasingly be seen to be in conflict with ( the super sized globalize s ) rights of capital. One need not argue for new extremes, such as communism, to see the balance ( if there ever was one..) is not there now, the scales are overwhelmingly in the favour if the super rich., as never before.
It’s as if the robber barons have been resurrected , and I think every reasonable person ought be very worried about where this is heading.
Basic social economic theory says oil wealth ( which corrupts and concentrates power into ever less democratic hands..) is poison to democracy and also any genuine ” free market” too. ( see Putins latest antidemocraticness for reference..) How much worse then is this broader usurpation of markets and societies and rights world wide.
The issue you are tackling is huge, Richard, and I thank you, for myself, and all people in the world who need this problem addressed, and I would assert that is in fact, every last one of us, even the very people who are causing this nightmare.
Un enlightened self interest is a poor cousin to the enlightened one, even in financial or economic terms. Mainstream economics recognizes this, variously, yet even it seems utterly blocked out of ever more irrational policy whose only purpose seems increasingly to be to benefit the richest everywhere..
The fool here who seems to think ” beggar thy neighbor” is a natural or good thing, should think again. It’s not, and never could be passed for as ” wisdom, or even good business.
Fairness is NEEDED in any society, not only for moral reasons, but for economic ones too. It is not ” expensive” to be fair or even generous to the poor, it’s actually cheaper than simple minded ungenerousity, and routinely proven so.
Foolish waste is the domain of the very people who wish to have you believe such jaundiced beliefs, or that ” welfare mothers” deserve a good kick.. ( insert your favorite political knee jerker here..)
Government and corporations and banks do NOT use money wisely, especially when it’s not theirs originally ..!
The AVERAGE government likely spends 100 time what it spends on welfare on all manner of ludicrous thing, and not at all efficiently..
The average corporation could never survive as a small business today, for the self same reason, they are hugely wasteful. Not surprising they seek ” rent” at every opportunity.. !
Neither of these kinds of organization contribute as much to society and employment and the economies of the world as small to medium business does. ( and the average citizen. Too, thanks…!) This is fact, not theory, and well known, and ” self evident”…
I think the average person is not ” out for themselves” in the mercenary way argued. Far from it, people are connected to a place, and care increasingly about others regardless of place.. Despots shooting journalists in Russia, or bullying the poor in th UK or Burma IS a concern to many, regardless of where we live. This is, ironically, never been more true than today, I think, and will increasingly be more so, in future..
The guy saying all people are totally selfish is wrong by any extrapolation, your point is also irrelevent…one suspects this is your thinking, if so, I pity you not only your lack of soul, but inability to reason soundly.
Telling oneself that all people are mercilessly self interested, is firstly just silly andprovably inaccurate. ( I relate to your pessimism, if indeed it is this, but even this is inaccurate..) In any case, it’s a false argument as presented. To the extent this is true of any nation more than others, then it WILL impoverish a nation both economically AND socially. ..yes, really..
( as in ” amoral familiarists” such a mentality is believed, with firm reasons, by many economists to SERIOUSLY impede economic and social outcomes.. Thereby, such a condition would be part of the problem.. As a justification for foriegn corporations to be equally irresponsible, it’s utterly laughable.. Surely such selfishness is a good reason, also, to demand more, not less of wealthy outsiders..? Either way, your assertion here, is irrelevant and useless. )
The blocking effects of all of this stops contribution from future/ would be business persons.
Despite massive piles of money hiding out from taxation and risk,the effect seems to be as turning off the ( natural free economy) flow to new ventures. Beyond merely damaging democracy via tax avoidance, it seems to be vastly limiting new business activity entirely, which also benefits vested interests over even the global economy itself. ( in a foolish un enlightened way, which will even hurt the very rich. Too…!)
So, why are we repeatedly expected to give further advantage to these groups, which increasingly represent each other, and not us ..?!
Meanwhile ” economic rationalists” ( no, sorry , but THATS not rational…!) and their ” trickle down ” BS has repeatedly been proven utterly useless and wrong.
The rich do not need welfare… ( seems so obvious as to be not worth a mention, yet they repeatedly get it..) …qall the world should NOT be ever poorer so the rich can get richer.( in any economy climate, which always was true, but never like it is today…!) Democracy, freedom and even a healthy economy should not be sacrificed for the invidious priveledge of those with every possible advantage.
All the land of the planet should NoT be claimed forever by the super wealthy, lest we all be their slaves forever…!
Tax on large land and wealth holders is an answer to the problem, that has been caused by the very lack of this tax. Even a harsh tax does not change the fact, but only the degree of their ever increasingly excessive advantage.
A fair tax can certainly not mean LESS tax on the wealthy than on the poor! Yet, this is where we are at right now, basically, world wide.
It’s high time we got serious economic and social policy minds involved in policy, and high time citizens voices counted for something.
The damage to democracy and justice grows daily, it’s time to fight this!
Some pigs ought not be more equal than others. Personally I like bacon as well as any other..
All these nations on this planet, rightly belong to us, the people of this world, and the time has come for despots, politicians mandarins and the super rich to be made to bow their arrogant heads to our will and justice.
This is no longer an age of huddled serfs with boundless ignorance, we live in a global world too, and we ” serfs” have sharper tools, than ever before in history. This is OUR age, not a ” new world order ” meant for our impoverishment, whatever such ill is intended for us by those who feel ( patently falsely ) entitled to destroy our democracies, and make us ever poorer…
What is being done by a thousand small cuts is far worse than murder or armed coup, or a miriad of other crimes, the immorality is literally global, a massive hateful needless vicious crime. To simply call it greed, is to underestimate the evil of intent and also of the effects..
( Indeed, it ” arms” countless crimes, murder included. One can only wonder as to how deliberately…?! Ignorance is no defense, however, and especially unlikely. Perhaps we need to ” take this” as an undeclared and deliberate war against us, and finally take the gloves off in defending ourselves?
A war against natural justice, democracy and basic human rights is how it seems to me, and one the people of the world must not lose.)
The mere fact it’s not correctly labeled as such a crime, is, by the way, irrelevant. Anything so overwhelmingly wrong and hurtful of the entire worlds people IS crime…! Nameless victims are being created daily, and the ultimate target seems to be every person and more… This is more than fraud, and worse than treason, worse than murder, even.
Not so long ago Bush senior declared ( chillingly ) a” new world order” , if this is what he meant..( I suspect he did..!) then, it’s irredeemably broken, and we need a new one..!
He seemed to think the victory was one of ” capitalism” over communism… ( His words in fact, at the time..)
….Hmmm.
Mr Bush, democracy won that fight, despite the fact you and your children clearly don’t believe in it…! Democracy WILL eventually defeat this sick and twisted version of what your ilk ,laughably belief is ” capitalism” .. Any true capitalist would never utter words so clearly authoritarian, freedom and democracy makes the best environment for capitalists, and wealth, even as those who benefit most try to tear it down, proving their idiocy, for wanting to do so.
( democracy will also again defeat despots in Russia, eventually, even ” a capitalist “despot..)
Anyway, thank you Richard . A fairer world is desperately needed, before it becomes too late, and I can’t imagine a nobler or more needed ” calling” today than the one you’ve undertaken, in relation to tax justice.
The people here trying to make it about you or whether you pay tax, ect, need to step off, doubt they will though.. Small minds will run to such things, fortunately small minds are not needed to change the world.
It seems an impossible task. But I think you are changing the world, and I thank you for your efforts. I can see no plausible nor logical excuse to doubt the sincerity of your motives, at barest minimum.
If the leaders of our various political process could match such sincerity, we might never need worry again, whatever thier beliefs.
Sadly, that they repeatedly and brazenly betray us more seriously than ever, is transparently clearer amid their growing arrogance.
One wonders quite seriously why they can’t be charged for treason for the things they do.. Perhaps we need a binding business contract for our politicians, then they might keep their word at least, if not learn loyalty to their nations people. I bet the average corporate lawyer would never stand for what we all put up with from our governments, daily..! . Ironically ….!
I think your arguments are obviously sincere
Some of your facts look rather wide of the mark
Please, if you haven’t already done so support this worthy cause. TTIP is an attack on democracy. Surprise, surprise, the multi-nationals and the billionaires are backing it. TTIP will result in a race to the bottom in the regulation of markets. Europe has the most to lose as good regulations protecting consumers are likely to be torn up. For more information, please watch the second half of the Keiser Report episode 560 and visit the Occupy London website.
http://www.rt.com/shows/keiser-report/episode-560
http://Www.occupylondon.org.UK/stop-ttip
I’m not sure Mr. M, will tolerate this but here goes…..
“Political parties only peddle views that will help them to get into power.”
Utterly cynical but brutally correct. For all the fine words produced by and possible associated deeds of parties, I’d argue the following is true:
– the only real aim of the Party that is HM Loyal Opposition is to become HM Government.
– the only real aim of the Party that is HM Government is to avoid becoming HM Loyal Opposition.
Nothing more, nothing less and so every policy, every statement weighed in that balance – or at least it has been in the past 40 years – and if each policy suits the majority of voters – well that’s it.
Each and every version HMG goes for it’s client groups and it hopes that it’s client groups carries enough votes to vote the ‘Other Mobs’ client groups.
Allan
utterly cynical but not, I think, correct.
I’m far from positive about politics but I can’t accept your caricature of it.
When Gordon Brown rescued the banks he must have known that probably doomed his premiership. He did it knowing that letting a bank go under would destroy the economy.
Revolting as it was, Blair’s invasion of Iraq was also extremely unpopular. If he’d only been interested in votes he wouldn’t have done it.
Cameron must know that the independence of Scotland would virtually guarantee the Tories re-election but he is doing his best to oppose it.
I think our system is horribly flawed & that one of the problems is, simply, the nature of our politicians, but not because they are corrupt & only interested in re-election. I think most of them are genuinely convinced they can make the world a better place. The problem is that these days they have so little real-life experience & spend their time being bullied by lobbyists & PR men inside a foul, Westminster “bubble”.
My first reform, to allow our representatives to taste the fresh air of freedom, would be to turn the Palace of Westminster over solely to tourists & move the seat of Government to Stoke, Sheffield or Ipswich.
I was brought up in Ipswich
But think Stoke or Sheffield would work better
Richard
are you agreeable to it (moving the capital) in principle?
Germany, Australia, USA, Netherlands, India, Brazil are all countries that have understood that having your seat of Government in one of your largest, most important, cities can only lead to grief.
I think the idea is curious and potentially valuable
‘’What I am in favour of is the responsible allocation and use of wealth in the interests of all in a society.’’
And that is your real unforgivable sin.
It is the exact opposite of what the conservative right stand for, in spite of their passionate their rhetoric.
All their moralising, arguments, pleading, logical conclusions and philosophical debates lead ultimately to the same conclusion, namely: an impassioned justification for selfishness and the defence of inherited privilege.
Again, not for the first time, I wonder if Mr. M, will let this go….
“It is the exact opposite of what the conservative right stand for, in spite of their passionate their rhetoric.”
You mean as opposed to members of the Labour Party – who when in government – were more than happy to see people get rich. I think the phrase was ‘relaxed’.
Perhaps the difference is that the ‘Righties’ aren’t as much hypocrites as those on the Left when it comes to cash and being successful or do you think a TU leader on a very good wage should be allowed to occupy social housing?
And I happen to think that the TU leader in question is fantastic at standing up for the members of the TU and also at keeping safety standards high…yet I don’t think that someone on a wage ‘north’ of £100k should be in social housing.
Notice I’m not criticising the wage level of the TU leader – that’s a matter for the TU leaders members and if they’ve voted the TU leader in, then clearly they know what he’s paid.
I’ve deliberately used the phrase TU leader so as not to personalise it or attempt to engage in a question about personalities.
Thank you for this, Richard. Far too often posts on this Blog on what are indeed moral issues (such as your recent post on who really benefits from Benefits) get, if not hijacked, then certainly obscured, by those who argue that you can’t have been right about £X billion, when the true figure is £X billion minus 2 or 3, distracting attention for the key issue, that £X billion minus 3 still leaves a hell of a lot more than e.g. the agreed £1.7 billion of fraudulent Welfare claims.
Jesus’s wonderful comment about those who “strain at a gnat, but swallow a camel” comes to mind, so thank you for re-stating the moral argument for justice, equality and fairness – an argument that our current Government has turned on its head, seeking to characterise social rapine and plunder as moral activities, and those who oppose them as social pathogens – the most obvious proponent of these warped views being the egregiously awful Iain Duncan Smith, with Gove a close second.
The world is a much better place for having you in it Richard.
Keep up the good fight!
Thank you
No, thank you!
You are being true to what gives you meaning in life-and it’s not making money.
What would it profit any of us, even if we gained the whole world and lost our own soul?
“and it’s not making money”
But he’s doing that nevertheless – judging by the accouts for the various companies Richard Murphy is a director of, he’s in the top 1% of earners in the UK.
You need some serious lessons in reading accounts
But it is true – I am a higher rate taxpayer – and argue I should pay more
Your problem with my doing so is?
Just tell us which companies you have been involved in then?
I am a member of Tax Research LLP and Finance for the Future LLP ( which is currently effectively dormant)
I am a director of the Fair Tax Campaign, a not for profit which has not paid me
I am becoming a director of the Fair Tax Mark Limited which may well not pay me for some time to come
That is it
My wife’s affairs are her business but she is a partner in Tax Research LLP, probably being significantly underpaid 1% of profits for her contribution
My funders are aware of what I earn
Looks like my comment got cut again.
I have no problem with you making money, and am sure what you are doing is legal. Likewise for your wife.
I do have a serious problem with you attacking the 1% for being rich, when given the numbers in your company accounts, you yourself are a member of the 1%.
I also have a problem that you attack tax avoiders, when you use LLP’s to avoid paying NICs, and the companies you own have paid out very minimal amounts of corporation tax – you pay out all profits first leaving little for copr tax.
You simply cannot play it both ways, and say it is bad, illegal or immoral for big corporations and rich taxpayers to act one way, then do exactl ythe saem thing yourself.
I choose to make my income known when I need not do so
I am honest about it
I am not in the 1% but so what if I was? Warren Buffett argues for wealth taxes
Are you saying he is disqualified from doing so?
Does having any particular level if income preclude argument against tax justice?
Your logic is as vamp Krupp as your philosophy
pS LLPs cannot pay corporation tax – acquainting yourself with some tax knowledge would help the credibility of your arguments
The companies of which I am a director are not for profits
That’s right, if in doubt play the man rather than the ball. Keep it up – it shows everyone the bankruptcy of your ideas!
How much do you think you should pay out of interest ? I thought you commented some time ago that there was effectively a mechanism with hmrc for those who wanted to pay more. Not sure if Starbucks went this route or not?
I would certainly uncap the national insurance I pay for a start
I see you’re increasingly attracting personal attack masquerading as argument these days. The trolls are here, Richard; you’re obviously hitting a few nerves! 🙂
They’re out all right
And being deleted too
when only a few are benefiting is a further sign of the malaise (should read ‘malice’…)
There is nothing moral about the current economy.
The parasites and I’m afraid that is what they are, at the top of society are sabotaging cynically and deliberately the attempts made to give equality of opportunity.
The campaign has been well orchestrated and insidious.
The myth of the wealth creator born out of trickle down economics is but one example.
Thank you for all that you’ve written.
Human history is littered with examples of why humankind does better when it acts collaboratively rather than selfishly and of how, when its prioritizes narrow self-interest, it ultimately fails.
And, if that evidence is not clear, it’s equally clear that those species that demonstrate superior intellectual skills, eg some corvids and parrots, act collaboratively, as evidenced by their demonstrable preference for living in groups.
I have personally experienced far too many large and small acts of kindness and support from giant “nobodies” not to believe in the power of collaboration.
Despite all this evidence, those at the financial peak of our societies, as a group, seek to maximise their hold over everyone and everything regardless of the damage they cause and those who would govern us, desperate to join the “elite”, pander to that club by issuing endless propaganda to set different groups against each other, using divide and rule as a means to preserve their, and their allies, interests’, power.
I could not agree more with you that the current state of play is morally bankrupt. What I do not understand is why no politician, of any shade, seems capable of understanding that bringing people together, that governing for the vast majority, is the only workable answer in the long run. Sure, that would upset the “elite” and involve a very substantial and difficult to combat backlash, but, in the long term interests of the vast majority, most particularly our children, this war, and war it will be, must surely be fought.
This is a fight for the survival of our democracy, for saving us from the imminent arrival of fascism, if it hasn’t, for all practical purposes, already arrived, and all the horrors history tells us it will bring. And you are playing a vital and leading role in that war, for which I thank you and in which you have my ongoing and committed support.
Tyler
“you pay out all profits first leaving little for copr tax”
If paid out as salary it will be taxed, if paid out as dividends it will be taxed.
You seem to be drawing an, entirely false, analogy, between the typical small Co & the large Plc.
Put simply, if you knew anything of business, you’d know this was a false analogy. You keep on criticising Richard, often in quite personal terms, because he opposes a “free market” but are you a businessman? From your posts I doubt it! I strongly suspect you’re just a desk-holder in a firm of solicitors, accountants or company formation agents who, essentially, parasite themselves on the rest of humanity.
A ‘free market’ might well be an improvement.
“If paid out as salary it will be taxed, if paid out as dividends it will be taxed.”
True, but you are missing the point. It is most tax efficient for all the money to be paid out as income, rather than leaving it in the company and it be subject to corp tax, before being drawn as income later.
Tax avoidance isn’t about paying no tax at all – it’s about paying the minimum. In this case, Richard Murphy is minimising his overall tax bill – and avoiding tax. Perfectly legally and sensibly I might add – just a tad hypocritically.
If you had any clue about tax it would help your case
As it is you reveal you have no clue at all
What is more you seem to think that the objective of a company should be tax maximisation – and that it should retain all income for a year before settling any payments out of its income, which to be kind, is a requirement contrary to all the known principles of accounting and which is utterly economically bizarre in its logic
Which is useful, as it does justify deletion of your comments
As somebody who regularly reads these blogs and works in the tax advisory sector, I find these blogs both interesting and disturbing at the same time. Personally, I find the concept of morality difficult to equate with the principle of taxation. For instance, it appears a consensual view on here that it is immoral to avoid tax but is it immoral to refuse to pay tax on a political belief, i.e. you disagree with what the tax revenue is being used for? How about a tax avoider who gifts all his tax free income to charity? Please ignore the legality of this, it is the moral argument in point here.
Might I point out that you have posted a profoundly moral statement?
You may think not, but it is. I might consider it amoral, but that does not stop it being moral. WHat you are saying is that tax is not communal. And, of course, you challenge democracy.
Why do you think it acceptable to dress up such morality as not being moral opinion?
Indeed – there is no morally neutral ground – that’s what makes life both difficult and interesting.
http://rt.com/shows/keiser-report/episode-558-max-keiser-585/
The top 1% use their vast wealth, either as wealthy individuals or as directors of (mainly?) multinationals, to lobby for changes to regulations that minimise the impact of the state on their families and businesses. The amount spent on lobbying is vast – that’s how they maintain a grip on the capitalist system and manoeuvre it to their advantage and the disadvantage of others.
In an earlier post where I looked at some of the ONS statistics that were being debated (http://alturl.com/tdvgn), I said that, the issue is not just tax, it’s disposable income. So, in the UK with a disposable income of £ 75,527 pa it’s hardly surprising that the top 10% are able to do a lot more to perpetuate and improve their economic advantage compared to the bottom 10% with their £ 9,028 pa disposable income.
Is this really the society that we want in the UK? Where social mobility is zero? Where an increasing proportion of the bottom 10% rely on food banks because the top 10% are not prepared to pay a greater proportion of their income to support the infrastructure on which we all rest? Do we really want to create a society for our children and our children’s children where we pass more beggars in the street, see more queues for soup kitchens, watch our health service deteriorate to US standards and see gated communities grow around us?
For me, it’s easy to say it’s a question of ideology — who brought me up and how I was educated and continued to educate myself, and where the moral framework lies. What’s at core is a fundamental question — what do I want to achieve in my lifetime? The reality is in our villages, towns and cities where people, who for whatever reason find themselves in the middle or the bottom of the economic ladder and who see and feel the unfairness that has grown around them.
The choice is always an individual one. Richard is saying has made his choice and he’s in it for a long and worthwhile haul. I share his ideas but cannot match his energy and zeal and would prefer that some of you to positively participate rather than obfuscate the issues.
Thanks
My feeling is there is a great deal of misunderstanding about tax, and accounts in different countries. The same with trusts. I support trusts, I think its great to leave the majority of my estate in a trust, instead of giving it to my children. Now many on here would suggest that this is wrong and say I am nasty. But I am not in any way. We must never force people down a life or path they don’t like. It will go wrong. I have my business and I don’t expect my children to follow. A trust works fine, I would prefer something more secure but its not possible.
However, Many people are now concerned to ask whether their planning arrangements are‘mainstream’ or would be regarded as ‘aggressive’ if they were subject to intense scrutiny.The difficulty in addressing these issues for private families is that public opinion doesnot overly concern itself with subtle nuances when it looks at family wealth structures.The automatic assumption that any cross-border planning is inherently suspicious or aggressive is hard to shake even if one is dealing with financial journalists from quite respectable newspapers.
I have bank accounts in the IOM. I use them when I travel. Its the cheapest way of having currency accounts, that I have found. I declare all the income on my tax return. I appreciate not everyone does declare, the same way not every one sticks to the speed limit. But that is life.
What a strange response to my question – “you challenge democracy”? My position is very different to yours in terms of morality and taxation (I personally see no moral obligation to pay the maximum amount of tax if one’s affairs can be structured in a legal manner to reduce the tax charge and what constitutes the “right” amount of tax is another question)however I find it interesting to debate, this being the point of these blogs? I do not challenge democracy but am asking a simple question:
If, as you say, there is a moral obligation to pay tax can there ever be a moral argument to not pay tax? For instance, government takes aggressive steps towards removing a particular group of persons from the UK and a taxpayer takes a strong view against this so refuses to pay tax as do not wish to subsidise?
Or do you take the view that morality only applies to raise tax receipts when the legal system fails?
I think I can only reiterate my previous answer
It appears to be that oh think morality lies only with an individual and that duty or responsibility to others carry no part of it
As a Quaker I know some who object to tax used to fund armed forces but I have never agreed with their campaign, nor will it achieve anything. As a Quaker I believe in finding as much consensus as I can. Democracy is an imperfect way of doing that
Of course its imperfections can exceptionally require a challenge in unconventional ways – it is flawed even if the best we can probably get. I have not yet seen a situation bar the poll tax where that could be justified with tax non-payment. The ‘bedroom tax’ might be another
What gross social injustice have you in mind? You do not say
No gross social injustice suffered by myself – more an academic question on how far morality can extend into taxation. On one hand taxation has to be defined so that taxpayers know that if they earn £x they will pay x tax. Equally, those advising on ways to save tax to their clients need to appreciate that aggressive avoidance will neither be tolerated by HMRC, the courts or the rest of society. I do not call this morality per se but rather the spirit of the law (which perhaps is dictated by the moral compass of society at the time towards taxation). Unfortunately at the moment, we find ourselves in an unhappy medium where those advising are still working on an outdated mindset that because technically you can avoid tax, you should whereas those pushing for more tax are arguing there is a “right” amount of tax which should be paid. Difficult issue to resolve!
Read the GAAR
What’s the difference between aggressive, sophisticated, clever, canny, tax avoidance by using schemes and knowledge of loopholes and the law?
Is it amoral for a person to set out their affairs so as not to pay the taxman any more than is strictly necessary? I’d say not otherwise HMG would allow the loopholes to remain in existence – and no govt. of any colour has really taken much action given that they all look at what each other is doing.
After all, from a moral viewpoint, why shouldn’t the individual take the opportunity to structure their affairs to legally reduce their tax bill when HMG is busy coming up with schemes to cut taxes for business (thus undercutting other nations) so that businesses will move to the UK?
Read the GAAR
Then realise that it will be updated – inevitably
Thomas1 — “I personally see no moral obligation to pay the maximum amount of tax if one’s affairs can be structured in a legal manner to reduce the tax charge” ….
The moral imperative depends upon mindset, by which I mean how we view the world by the time we have become young adults. From infancy we attempt to make sense of the world we are presented with. From highchair to armchair the key influences are parental, school and peer group. What we hear, see and try to make sense of creates mindset and it’s immensely difficult to change as we grow into mature adults. Ideology and morality are in that pot, and with it an inbuilt viewpoint of what democracy means and what we mean by fairness.
For me, in our version of democracy, the answer to the question “who will you vote for” is always “whoever I believe will curb the excess of capitalism”. That’s often a difficult choice when taken at face value. But every candidate arrives at the hustings with their individual mindset and that’s the starting point for how they view democracy, morality and fairness. What they go on to create through the process of democracy once they are in power reflects these three points.
As has been noted above they then have to balance their own values and that of the party against the reality of the democratic process, the life of the parliament and the next election.
The current Westminster incumbents have a collective mindset that strengthens the legal tools used to increase the excesses of capitalism. That’s not what I want because my mindset says that’s just not right. It’s not right for me or my children or my children’s children.
If one takes the view that government spending comes first through money creation at the Treasury or wherever and taxation comes second, the point of it being to reduce the amount of money in circulation to avoid inflation, it’s clearly unfair that any one group, particularly the richest, should be allowed to keep more of its earnings than any other. It means that to avoid inflation the other groups must be taxed much more than their fair share to compensate. That’s hardly moral…