I suspect few will be interested in proceedings in a committee room of the Scottish Parliament this morning, but I have come a long way and hope to get my say in on the foundations of Scottish taxation.
It will be good to present alongside Alex Cobham of the Tax Justice Network.
The advantage of submissions being presented in advance is that you get some chance to see what others are thinking. As a result I am sorry to note that the Chartered Institute of Taxation believe no new thinking on the subject of tax management has been required since Adam Smith wrote in 1776. The submission they make is technical, uninspired and implicitly condones a Scottish tax framework that affords no social or political role to tax. That seems to me to entirely miss the point on almost every issue under discussion.
The Scottish chartered accountants are a little more enlightened but I worry that they, like so many tax professionals, focus almost entirely on tax as a technical issue. They dedicate just four lines of their submission to tax in the fiscal framework and decline an opinion despite having earlier commented quite explicitly on their concern about govnment profligacy, without noting evidence to support the worry they have. When it is so obvious that tax is a key component of macroeconomic and social policy and these professional institutes have a public interest mandate to justify their privileged positions I think it negligent of them to only represent business and technical interests when it comes to tax. A more enlightened appraoch should be implicit in their work, but is not. It will be interesting to see if the hearing supports my concern.
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I think this shows just how inculcated the idea of tax as an ‘oppression’ on the individual really is in contemporary society.
Jonathan Freedland wrote a great article about Ayn Rand in the Guardian recently – her ideas seem as strong as ever.
Randian philosophy is centred on the supremacy of the individual – the world revolves around the person, not the community or State. Even though we know that sapiens as a species are successful because our ability to work together creatively.
I expect this to get worse to be honest. Lower wages/higher debt plus less effective public services means that the argument for tax is being constantly undermined.
Also, those who are over leveraged in the quest for assets and early retirement tend to avoid tax because they would not be able to speculate otherwise (they would have less money). So without wishing to sound superior, none of this is a surprise to me.
Agreed
Good article by Freedland
There are many Scots who now take an interest in such Committees. As far as I know, they don’t have viewing figures but, if they did, you might be surprised.
I’ll check my hair then!
Is this really an issue of perspective? Tax professionals – those involved in the nitty-gritty business of advising real people and businesses about how the current tax system affects them – see tax as a technical matter. And a professor of political economy – interested in the broad sweep of tax policy – sees tax as a macroeconomic matter.
Which of the four principles that the Scottish government has identified to underpin Scottish tax policy do you object to? Would you want tax to bear no relation to the ability to pay, to be uncertain, inconvenient, and difficult to collect? Certainty – the law being accessible, intelligible, clear and predictable – is an essential element of the rule of law.
It seems to me that you are not saying that any of these four principles is bad, of itself; just that they are not enough, and that tax is also an act with political and economic implications. But surely those are matters for economists and politicians, not tax professionals. That said, tax professionals should try to step back occasionally and tell the wood from the trees.
You criticize the CIOT for referring to Adam Smith, but your submission does too. Like yours, the CIOT’s submission also refers to other important principles, including the need to translate policy into legislation without unintended consequences (the TJN refers to such spillovers), the need for simplicity and clarity, and a minimum of bureaucracy.
Perhaps worth adding that some of these submissions are supplemental to earlier submissions listed here: http://www.parliament.scot/parliamentarybusiness/CurrentCommittees/100253.aspx
The Adam Smith principles have serious difficulties inherent in them: see what LAex Cobham has to say on certainty, for example
Also note that we do not have equity at present
And then think about whether efficiency is contrary to social justice
Three (as I noted) may (I stress, may) be goals for tax admin, but they’re nowhere near principles. At best they’re operational goals
And yes, tax professionals who talk in public about how tax systems should be managed should know this or they are failing in their charitable duty to educate appropriately on tax and are instead supplying political misinformation
Your reading of the submissions and my own is hard to reconcile. I will put that down to your politics, not objectivity
We don’t have equity, that is certainly true; but has any human society ever had true equity?
I’m not sure you know my politics. And as far as I am aware the CIOT has no espoused political views either. Perhaps lawyers and accountants are intrinsically conservative (with a small c) but many would subscribe to progressive or liberal ideals too.
I can guess your politics
I have read 230 comments by you
Gosh, you are keeping a list. I hope you are not checking it twice.
The aft ware does it
I wouldn’t dream of doing it
I have a life (of sorts!)
[…] It is all too obvious that each of these would be conflicted in offering advice: first because they do not think tax is an economic and social issue and second by the interests of the large businesses that dominate their concerns. It would be a […]