There was a lot of publicity yesterday about a new BBC documentary on the Welsh town of Crickhowel opposing tax haven abuse by way of its traders apparently seeking to take advantage of that same abuse as a form of supposed mass (on a small scale) civil disobedience to protest about the actions of major retailers and others who reduce their tax liabilities by taking advantage of tax haven arrangements.
Quite a lot of journalists phoned me during yesterday, firstly either assuming I was advising the protestors or the BBC programme and secondly assuming I endorsed their protest. I had to tell the journalists in question that neither was true.
For the record, I was asked to advise on this programme and refused to do so for three reasons.
First, I do not approve of tax haven abuse whoever does it, or why.
Second, I felt the plan outlined to me by the production company created quite unreasonable tax risk for those taking part that I could never advise anyone to take, especially as it was wholly unnecessary.
Third, I think that this protest is akin to protesting about street crime by going out to do some street crime: the logic behind it is, to be candid, quite bizarre. If the programme succeeds in its aim it will prove all retailers could be abusing the tax system at considerable cost to society. If it fails some traders may face unwarranted increased tax risk, cost and potential adviser's fees to sort out a mess they have created solely to appear on television, and 15 minutes of fame is not, in my opinion, worth that.
I would have much preferred the whole town turn on tax avoidance, the traders join the Fair Tax Mark or sign the Fair Tax Pledge, and the people of the town say they would not trade with those who did not. That woukd have been a positive story. As it is, this story seems wholly negative and not a little irresponsible by the BBC and the production company. And tax is too important to me for such irresponsibility.
That opinion of mine is also reported by the Independent here and is roundly criticised by the Independent's business editor, Jim Armitage, here. Armitage claims I have totally missed the point but the concedes that he has no idea how the village is claiming to move offshore, and quotes an unnamed tax adviser who shares that bemusement.
And that is my point, a stunt that does not work and which puts people at real risk is not a stunt worth doing. And nor is copying abuse a way to end abuse: it's not even that anyone needs to provide publicity to make it clear that this abuse is happening; we all already know that. It will take a great deal to make me change my mind. This is not good protest, it is just looks like poor television to me.
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I’m afraid to say that I agree with Jim Armitrage. I believe you missed the bigger point. The protest or “stunt” should boost rather detract from initiatives like the Fair Tax Mark and I can’t see what can be gained by alienating the very people we want to embrace them. The last thing those of us that recognise your unique role in this issue would like to see if tax cheating companies citing you on this matter the same way Aaronson did on his toothless GAAR.
I have made my position clear that I do not think undertaking an abuse helps end it
Ethically I cannot condone this
Wow! Stern words, persuasive argument, well-merited criticism of the BBC and even of the Crickhowell traders: you’ve once again won me over to your argument by persuasive evidential and principled reasoning.
However, I still feel the story had merit, (which is why I flagged it up to you, though I’m sure you had already noticed it, in your thorough sweep of the news), because, at least in the stated views of one of the participants in the “fix”, it contains a clear vindication of one of your key arguments about our tax system, namely:
A) that small businesses not only pay their tax, and pay it in full, but WANT to do so, because they see the worth and utility in doing so;
B) they therefore feel angry at the ” freeloader” big companies that fail to pay their fair share, yet still ask for all the benefits, and more, of trading in the UK;
C) accordingly, all they ask is that there ve a level playing field, so that SME’s may cease to be done over and screwed, and that every person and business entity should pay fair tax, implicitly in your definition of the right amount, and noore or less, at the right time.
The actual outworks of the story may stink (and thanks for the tutorial on it), but that inner motivation and message strikes me as worth highlighting.
I have just taken part in a discussion on BBC Wales on this
From that it sounds like they are not going to do any scheme at all
I think they are simply going to say they have found out they can’t and make clear that is unfair
That is a long way from what the article implies and what the production company told me they wanted to do when they approached me
That would be an acceptable course of action, but still spun badly
Clearly, the town is not seriously contemplating abuse. Their objective is to present their scheme to HMRC knowing full well that it will be rejected, in which case they would have highlighted the unfairness and injustice of the status quo. Moreover their protest will highlight the fundamental point (often blithely ignored by apologists of tax abuse) that in theory we can engage in tax avoidance and if we did there would be no tax to fund public services. In my view, it’s a brilliant and welcome addition to the tax justice campaign.
That is not what the report implied
That is also not what the production company told me they planned to do
I have just taken part in a discussion with one of the four main people involved: she agreed with my concerns and said she would take them on board
If the aim is to show a dual standard I am happy: but people must not be put at risk in doing so
The aim is a race to the top, not the bottom
Of course the press will report it in whatever way they consider will attract the maximum interest and for the production company that’s a win-win. I read the Independent report and it was clear on what they had done.
And what I have learned this morning is that it is not at all clear that what has been done what this report suggests
They are nowhere near going offshore
They might never do so
They have no proper advice according to someone taking part
It’s all actually much more about angry discussion
The ‘turning of the tables’ that I thought was extremely valid was the Occupy Wall Street ‘Rolling Jubilee’ project to buy up unpaid debt at Vulture fund rates… and then just cancel it.
‘By purchasing the debt at knockdown prices the group has managed to free $14,734,569.87 of personal debt, mainly medical debt, spending only $400,000.’
http://www.theguardian.com/world/2013/nov/12/occupy-wall-street-activists-15m-personal-debt
My LibDem friend emailed me a link to the article in the Independent yesterday. This tells me that something useful may come out of this initiative, however flawed it might be in other respects. I consider my LibDem friend a belwether of sorts. If he gets the message, then the message is penetrating areas it needs to go. He also opposed Trident renewal, which he never mentioned until Corbyn outed it.
In the world of any publicity is good publicity, I suppose this has helped to raise the public debate a bit more, even if the merits of the programme are questionable. Highlighting the absurdity or perhaps obscenity of a situation in the minds of the general public is ultimately what politicians really fear.
Clearly it is not the best solution as Richard correctly explains and it would be inappropriate to suggest otherwise in formal circles, but in (class) war you can be sure that the rules of the Geneva Convention are rarely upheld when there are only ever two possible outcomes.
Rolling Jubilee is another good example of how the nonsense of the debt based financial system can be turned on itself without breaking any laws. Just think how many people’s misery has been relieved for such a relatively small cost. How about establishing a UK based charity to achieve the same, there might be one but I haven’t heard of it. Perhaps the Independent would like to run a story about it!!
http://rollingjubilee.org/
I suspect based on discussions today that the programme will not develop in anything like the way current reports suggest
This article was misplaced hype
I’ve often wondered how much debt could be cleared and burden lifted if the individuals in debt were offered the same rates as the vulture funds or even slightly above those rates or even a regulation that if a debt is sold on you must be informed at what price so you can negotiate settlement with the new owner.
Any TV programme exposing tax abuse is worthwhile in my book. It would of course be much better if they gave public intellectuals like you space to explain the real issues but as the BBC does nothing other than broadcast neo-liberal propaganda that will not happen.