I note that Mallen Baker, the man whose article I responded to when writing The Ethics of Tax avoidance on Friday features in the Observer this morning repeating his really bizarre argument that:
In most developed societies, companies have the right — as do individuals — to arrange their affairs in such a manner as to minimise the amount of tax they pay. It is legal, even honourable. After all, a company that goes bankrupt because it paid more in tax than it needed to would be neither responsible nor competent.
One observation: no company has ever gone bust by paying too much corporation tax. By definition income is available to pay it if it is due.
One question: since when was it honourable to get round the law?
If this is the standard the opposition in this debate has reached they are in trouble.
PS I guess disclosure requires that I note I appear in the same article
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I thought the same thing myself when I read the article today.
You need to explain what you mean by “get round the law”.
Mallen Brown wrote:
“.. a company that goes bankrupt because it paid more in tax than it needed to would be neither responsible nor competent.”
Same applies to a government that doesn’t collect enough tax.
@John White
You need to explain what you mean by “get round the law”.
Really? It’s quite simple and is basically the difference between obeying the letter of the law and the spirit of the law.
Moving your savings into an ISA, as a method of receiving tax free savings income is tax avoidance, but is within the spirit of the law as that is what an ISA was designed for.
Using transfer pricing to move your income in the form of royalties to a subsidiary company in a country with low taxation is not within the spirit of the law, and is an attempt of nothing more than to “get round the law”.
I hope this explains it for you, and gives you an idea of why one is moral and acceptable, and one is not.
More than that, attempts to get round the law are also an attempt to subvert democracy itself. UK governments have, and are, ceding power to large corporations at an alarming rate, usually in the name of “competitiveness” or some similar mantra. I fear we are moving to a “corporate state”. There will soon be no point in voting because the laws of this country are either being made by business as a consequence of lobbying and continuous threats of relocation, or business will be allowed to ignore laws by a legislature and judiciary intent on creating a “business friendly” environment. Vodafone’s concession on its corporate tax liability is a case in point. These companies have no obligation to the public interest, just to their shareholders.
@Adam Hehir
Bang on
I’m doing a much longer version of this for the morning – but you’ve got it
It is so logical it’s hard to see why some don’t get it
Could it be wilful blindness? I find any other interpretation hard to find
@Adam Hehir
Adam, I guess the problem is that we all have different morals. Surely it is better for the law to state what it right and what is wrong, to avoid any doubt?
@Greg
Respectfully only someone form the political extremes could believe that possible
Democrats could not
Doubt, the ability to change one’s mind and the search for ethical living are at the core of democracy
But not libertarian neoliberalism
Sorry Richard, but I don’t really understand your point?
Surely evereyone has different views on ethics. Take abortion for example. Many people view this to be ethically wrong, and yet many don’t. It’s not for me to state which is right or wrong (in fact is there a right or wrong here?), so surely we need the guidance of the law?
@Greg
Extraordinary
You argue for tax havens and then the state should say when you wipe your bottom
What sort of abandonment of all responsibility do you represent
Or is this relativism descending to nihilism?
@Adam Hehir
What do you see as the difference between the written law, precedent, intention of the legislature and the spirit of the law.
@Richard Murphy
You let yourself down with such comments.
You continue to dodge the point that what one person finds morally acceptable another doesn’t. And therefore everyone has a different view of “the spirit of the law”.
So what is so wrong with expecting the law to define the tax rules? We live in society that thrives on tax evasion (nevermind avoidance) so surely the law should be clear and precise and not offer loopholes to the “unethical”. I can’t see why you have such an objection to that.
@Greg
I don’t let my self down
I show the poverty – and extremism – in your thinking
That’s the reality
@JayPee
Adam may of course reply if he wishes
But like Greg you show your poverty of thinking and the extremism of your view
Let’s use a little analogy. I drive along a road with a 30mph limit. I don’t have to drive at 30. Sometimes it may be wise to stop. It could be dangerous not to stop. Or it could simply be right to do 10 mph. But you say such judgement is not allowed. You say 30 is permitted so 30 shall be done. And a child who steps out dies. Legal you say. Try telling that to the judge if you took no steps to stop.
Judgement is the bedrock of society
You show time after time you despise the exercise of judgement
Most of us are wise enough to do so
Your question reveals your lack of wisdom
Not really, you just skirt around the issue. Hopefully Adam or some of the other commentators on this thread will provide some comment. I think it’s a major part of the whole issue, especially when considering the tax gap and how to narrow it.
@Greg
I’m not skirting round the issue
I’m hitting it head on
But you are wilfully blind….
And I can’t solve that
In your own little world of neoliberalism all is certain
Out here in reality it isn’t
But you refuse to engage with the real world
No doubt why you’re stuck in a tax haven
@Richard Murphy
Not sure i’d use the word “stuck”. Life is pretty good here.
Anyway, it seems fromone of your other posts that you’ve stopped the “skirting” and put an asnwer together. Thanks.