The following data comes from polling done last week by Unison and reported yesterday by the TUC:
The questions gave respondents the opportunity to choose betwen the kind of argument, one a union might put and one the government would put. That can be a good polling technique as it means that you are not trying to devise a neutral non-leading question, but are giving people the choice between two clearly partial statements.
There were fascinating answers on the Big Society (59% think it's a cover for cuts) and cuts themselves (56% think they'll cause recession) but I concentrate on tax. The sample was of 2,720 people:
| Some people and companies can legally avoid paying some taxes because of the ‘loop holes’ which exist in the tax system. Some say that the Government should close the loop holes in the tax system to ensure that companies and individuals pay more tax. Others say that closing the loop holes will effectively mean a tax increase on some individuals and companies which may reduce the amount of economic investment in Britain and threaten the economic recovery. | Total | Con | Lab | Lib Dem |
| Do you think the Government should or should not close the tax loop holes? | ||||
| The Government should close the tax loopholes | 79 | 80 | 84 | 82 |
| The Government should not close the tax loopholes | 8 | 11 | 6 | 8 |
87% had an opinion.
79% agree with the arguments that I and the Tax Justice Network, the TUC, PCS and others have been making.
It's time for action.
How can the total people that think government should close loopholes (79%) be less than the each of the responses recorded for each group of voters?
@Richard Howells
I suspect because it is corrected for ‘don’t knows’ and ‘others’
That’s not really surprising is it though? Most people don’t know much about tax, and as a practitioner when I talk to people I generally get the comment “I bet you don’t pay much tax do you?”, when as it happens I’m on PAYE the same as everyone else. What I find is that there’s a great suspicion that the tax code is riddled with clever “wheezes” that a savvy or wealthy person can use to get round tax, whereas in fact it just isn’t the case.
I remember a tax lecture I gave to a group of divorce lawyers last year, and at one stage I mention that “of course” a UK resident person was taxable on his worldwide income. There was a ripple of shock in the room, people got their blackberries out, they tentatively raised questions at the break about “clients” with Spanish holiday rentals or Jersey bank accounts. And these were supposed to be qualified business people!
“Most people don’t know much about tax…”, is a fact as Adam says, and it is an amazing fact since being taxed is an experience common to millions. Similarly, who knows much about economic rent, and how it can be an element of ‘profit’? What is so difficult to understand about gross receipts, current and anciliary expenses, depreciation, capital recovery, and a net cash flow, AND to decide which of those 5 items should be taxed? We got to turn the lights on in the economics department!
What’s also of interest here, Richard, is the party political distribution of people supporting the ‘close the tax loop holes’ position. Pretty much even across the board which shows how out of touch our political masters are. But that doesn’t surpise me. If you’ve been watching the series on Whitehall on BBC4 the episode last night which focused on minister’s private offices and therefore their political advisors said it all really: Cameron, Clegg, Osborne, both Milibands, Ed Balls (and so the list went on) all pretty much straight out of an elite university and into politics. So how can we expect them to know anything about what real people think.
‘Loopholes’ is a knowingly emotive word, associated with shady misdeeds and clever skullduggery. I would be interested in whether there would have been any difference if the word ‘allowances’ had been used instead.
@Ivan Horrocks
Precisely
It’s why there’s an ideas, policy and connectivity vacuum
@Lee T
They weren’t being asked about closing allowances – which are tax compliant
They were being asked about closing loopholes – which are tax avoidance
Please understand the difference
It’s not hard
Unless it’s deliberately ignoring the reality
@Richard Murphy
Loopholes are compliant, they’re just not generally supposed to be. And I do understand the difference, I just see it in shades of grey rather than black and white. Acknowledging that tax laws are something of a labyrinth is quite the opposite of ‘ignoring the reality’.
Incidentally, I think I have figured out the apparent contradictions between ministers’ explanations of the tax gap, explored in the previous thread (now closed, hence commenting here) on tax avoidance vs evasion.
As you’ll recall, there was general puzzlement over the government’s statement in last week’s HMT tax strategy document that one sixth of the tax gap was avoidance and one sixth of it was evasion, begging the question as to what the other two thirds could be.
The answer appears to lie buried in the appendix to the 2010 HMT paper on “Measuring Tax Gaps”, where Figure A1 provides a breakdown of “The behaviours driving the net UK tax gap”.
This lists evasion and avoidance as 17.5% of the total each, matching the figures given by both Gauke and Osborne if you assume that Osborne’s figure of £14bn was meant to be a total of both.
However, they then list a series of other categories, many of which would generally be considered (certainly by me as a member of the public rather than financial expert) to be other forms of avoidance or evasion.
For example, “legal interpretation” is listed as 15%. Surely just another description of avoidance given that it is on the basis that all of it is money that parliament *intended* to be legally payable as tax.
On the other hand, “failure to take reasonable care”, also listed as being 15% of the total tax take, is surely just another description for tax evasion. Certainly, that is how I suspect the taxman would treat it if finding me negligent when I did my self assessment form.
So, that’s up to pretty much a third of the tax gap for evasion and another third for avoidance now, i.e. £14bn EACH rather than combined.
But it goes on – 12.5% of the tax gap is “criminal attacks” and another 7.5% is the “hidden economy”. So surely that’s another fifth of the tax gap that’s really just tax evasion?
We then come to two small final categories – “non-payment” and “error”. These terms are not explained anywhere in the document that I can find.
“Non-payment” means bad debts (presumably therefore the govt thinks these amount to c£3bn pa – you think rather more I believe?!) which is interesting because it seems to mean that the government are including bad debts in the “official” c£40bn tax gap estimate. I suppose you might also categorise this as evasion by another name though.
“Error” appears to mean error on the part of HMRC, which I suppose is legitimate third category – though the fact that the govt is losing in excess of £3bn per annum due to its own errors perhaps amounts to a solid case for investing more in HMRC in itself.
At any rate the very rough 2:1 ratio of evasion to avoidance isn’t wildly different to your proportions (though the total amount is much lower of course) once you factor this in but it’s pretty clear that when ministers are quoting £7bn for each they are using a fair degree of sophistry compared to the normal understanding of those terms.
In fact, it seems from their own figures and explanations thereof that the total amount lost to evasion is about £22bn and avoidance is actually in the region of £14bn after all, once you account for the bizarre use of terminology.
@Nick
Entirely agreed – you have only to read their tabel to come to that conclusion
Their logic is absurd – and semantics to duck the issue
It would be so much better if they tackled the problem
@Richard Murphy
I have looked for this in the past, and not found it (searching this site for ‘tax gap’ returns rather a lot of results), so excuse me for asking.. but have you prepared an equivalent table to analyse your view of the tax gap?
One thing that Nick’s narrative of the HMRC analysis does is back up a point I like to make, that the gap is by no means all about rich people and big business (I’ve not noticed that being said here, but it’s willfully thrown around by a number of campaigners and commentators – not least UKUncut and, in his generally good piece today, Johann Hari).
The HMRC paper does a good job of saying who’s not paying the right amount of tax – but they’re only counting £40bn, who’s not paying the other £80bn? To what extent would simply closing the tax gap (leaving aside the redistributive nature of appropriate spending of that money) be regressive? And is it really right that anti-cuts campaigners insinuate that the whole deficit could be pretty-much eliminated if only big business and wealthy individuals paid tax at the headline rates?