The pedants are already out in force seeking to attack The Courageous State. One of the unexpected challenges relates to the fact that the book is on sale on Amazon. The Kindle edition is on sale now at £7.15 and the book will be there in the next few days, just as soon as they have physical supplies.
Why the challenge? As one commentator said on the blog this morning:
I'm a supporter of what you're trying to do but this time your two-faced hypocritical attitude stinks. Not only do Amazon use tax havens but they also use LVCR through the Channel Islands thus making thousands of people poorer. If by selling your book through Amazon is not supporting companies using tax havens, I don't know what is. Shame on you! Now post this if you dare?
Another on Twitter reads:
Inspired by your pragmatism, I shall keep using BVI and IOM subsidiaries whilst praying for someone to shut them down
Well, to the first commentator, if you think I wouldn't dare post that you underestimate my courage, by a very long way.
Second, and more importantly, I really do think those making such comments really do show a profound misunderstanding of what I say, and what I propose.
The simple fact is I could, I suppose, become a monk and live wholly self sufficiently in some remote place to try to avoid all the harm tax havens cause. And no one would notice. And nor would it help. I would not change a thing.
I do seek to change things. Indeed, I can fairly claim I have. Many in the Crown Dependencies will more than readily testify to the impact I have had on them and their economies. The latest such impact is active involvement in and support for the campaign to end Channel Islands' VAT abuse - which is another campaign now successfully concluding.
These changes, and many others would not be possible without using a computer - supplied I know via offshore entities, using software supplied in the same way, powered by electricity supplied by companies who use offshore, and on, and on and on in all aspects of my life.
I could sweat about this stuff and devote all my effort to trying to avoid companies relating to offshore but as Action Aid have shown, using my methodology, in the modern economy that is going to be very hard indeed.
So I have to make another choice. I sek to be tax compliant. Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes. Selling books and Kindle editions through Amazon is tax compliant on my part. My refusal to sell through these media would reduce the chance of my message being heard. And it would make no difference to Amazon at all. If I thought it would I'd do things differently, but I know it won't - and meaningless gestures don't get us far. So given I'm compliant, I move on and instead devote my effort to changing the system, not the minutiae within it.
And that is fundamentally different from the hopelessly hypocritical position of the Twitter commentator (who is hiding behind a pseudonym , of course). He is consciously choosing to be non tax compliant. I'm not. I'm being completely tax compliant - and am at the same time making it harder for companies like Amazon to abuse.
In the messt real world in which we all live that's the best I can do. You can call me a hypocrite if you like. But since I never claimed to be a saint I'm really not sure how that helps you. But systemically opposing tax abuse by major corporations will change things.
No doubt those raising the question would like me to spend my time worrying about the small stuff. Well, bad luck: we'll continue changing the system. That's much more important, and we're good at it.
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Indeed Richard.
It’s the same old argument that gets deployed against commentators of the left who earn decent money. The cry goes up from the right (usually) of ‘hypocrite! You’ve got money, how dare you demand that people like yourself should contribute more to society through taxation!’
There’s no hypocrisy involved at all. There’s no way any of us aren’t totally enmeshed within this avoidance and slave-trade culture. I’m typing this on a computer that was probably made by someone paid a disgracefully small amount of money. Would I still like the computer? Of course, but trying to change things so that the person who made it gets paid a fair wage (even if this means that I can’t afford a new computer as often as I would like) is entirely morally and logically consistent.
It’s a weak-minded argument, and if that’s the best they’re throwing at you, it’s probably a good sign. Haven’t read the Courageous state yet, looking forward to it.
LVCR is relevant, there is no VAT on books…
So even if Amazon where to choose to ship from outside the EU there is no change to the UK VAT take…
Anyway, I’ve ordered mine from the UK reseller. I’ve no idea whether they have offshore subsidiaries though – but it would be completely impossible for me to check this out prior to purchase.
Will the profits of the book being going into The Tax Gap Limited? (ho ho ho) Or Fiscal Responsibility Limited? (ho ho ho) Or Fulcrum Publishing? And will those profits be taken as divis? And will some of those divis be going to the missus?
Or you are going to be “courageous” and reflect the commercial reality that you as an individual have created the work and pay tax at 40% on the whole lot plus 8% NIC?
The profits will go to Tax Research LLP and be taxed at my full marginal rate – which is fully tax compliant, of course
And some will as a result be allocated to my wife – who as the preface notes, made a massive time contribution to the writing of the book
And for your information – having filed accounts both Fulcrum Publishing and Fiscal responsibility are now being dissolved and The Tax Gap Limited will be following suit in due course, which no doubt will upset you a lot
Surely the contribution of your wife should be recognised through remuneration rather than profit share. It is more appropriate to see her as an employee as her duties would have been far more secretarial, e.g. typing or proofreading. The “expertise” I assume comes from you and you alone – she is not a tax researcher or political economist. So you are saving employer’s NIC @ 12.8% and she is paying a lower rate of NIC.
She is a GP
The government thinks she’s capable of running the NHS – an issue on which she has very clear and very well formed opinion, which I value and trust
She typed, in the sense you suggest, not a word. She proof read not a word. She delivered very clear expertise, commentary and powerful insight – all of which I acknowledge my debt for in the book. They’re exactly the things a partner in the commercial sense does
Please do not be so sexist and stereotypical in your thinking. It does not become you.
And 1% on this may be enough for a curry…..so same tax rate and no NIC (which she pays in full in her own right anyway). Shall we get real here?
I was wondering if the book was going to be on Amazon ever since I hit the ‘pre-order’ button. I assumed it wasn’t but I do agree with what you’ve said above and it’s a healthy perspective to have (otherwise we’d go mad trying to avoid everything ‘unethical’).
From the other perspective though, I’m interested about what you think about buying from Amazon. If everyone avoided this and instead paid a few more £ and bought your book and others from other suppliers, wouldn’t this have the desired affect? Or does boycotting not work at all? Or is it better to put that energy towards influencing the situation ‘at the top’ rather than getting 50million people to each take independent action?
I try wherever possible to buy from book shops
Toppings in Ely is my favourite – but try the Book Hive in Norwich too
And in Cambridge try Plurabelle
I’m not saying individual action does not work – sometimes it’s incredibly important, especially when coordinated. What I am saying is we’re all constrained (a theme of the book) and have to make choices and make compromises (another theme). This is one I have to make in the light of the evidence I have on effectiveness of my efforts
RIchard –
Are you going to be holding a book signing at “local” bookstores
Isle of Man and Jersey on your road-tour list? 😉
Would be fun if they were
A tour is getting under way
No invites from there – yet!
It’s just the same silly “if you drink coffee you can’t protest” argument made by the same silly liberal individualist ethical consumerists who think that their “consumer choice” has an effect on the world and that then can change it by not going to Starbucks, or whatever.
You’re right, of course, but whilst people who campaign against ‘the system’ still must be allowed to live in it, it’s reasonable enough for others to make sure they are aware of the benefits they get from it and.. yeah.. maybe sometimes question how their actions and their words hang together. So have a coffee, but perhaps avoid getting it from Starbucks.. which is such a shimmering beacon of globalised corporate bland. Where there is a choice, peole should stick to their principles.. and sometimes make a sacrifice or two (because if someone really does think that Rupert Murdoch is the antichrist, then I think they really should cancel their Sky subscription).
Having said all of that, my biggest ‘issue’ with anti-corporate protesters walking around with Starbucks (apart from their obvious poor taste in coffee) is that, irrespective of whether or not it’s an OK thing to do, they miss the blindingly obvious fact that it can and will be used to undermine their credibility. With such a poor grasp of basic PR, they’re never going to achieve anything.
Oh… and consumers do make a difference, by the way… as long as enough of them care enough to do something. Belittle those who make their ethical choices if you want… but the very fact that I can (probably) buy an organic hemp coat hanger is evidence that consumers have made a choice.. and it’s all denting the profits of those people who make coat hangers out of ancient mahogany and intensively-farmed kitten fur.
I’m not for a moment saying choices don’t matter
They do and I try to make ethical choices
But as other commentators are also saying – you’re setting false standards for assessment to suggest protest itself should not happen when the reality is engagement with the real world is inevitable, and sometimes also the basis for effecting change
You’d have made great Pharisees!
And so yes – the book will stay on sale on Amazon. The good of having nit available there outdoes the current harm.
Richard
I have no ‘issue’ with your book being on Amazon. Your reasoning for that is perfectly sound.
But I do think that people who speak out on issues have a duty to consider their own actions and choices, and how they fit with their words. That’s not unreasonable, is it? As much as it’s daft for people to dismiss any protestor with the temerity to own a mobile phone, it’s equally daft for people to say that it’s ok for someone to call on others to change the world, but make no effort to adress one’s own contribution to the problem.
And I really do think I am addressing the problem
And let’s be clear – I couldn’t stop Amazon selling this book if I tried – or at least, no publisher would have published it if I had tried
So shall we stop being really rather silly?
I walk my talk as far as it is possible to do – but never, ever claim to be a saint or to be a man who cannot err, because of course I can, and think James from Durham and others have eloquently explained what those complaining are really trying to do
Richard
Please understand, I am absolutely not being critical of you here. I posted in response to Jon’s insinuation that these individual choices don’t matter at all – so it’s rather directed at the wider debate, not the fluff about where people can buy your book.
And I wouldn’t write for magazines like Ethical Consumer if I did not think choices matter
They do
But this one seems very low indeed on the scale of priorities
I have a method of buying books on Amazon, I put a book in my wish list and wait until the price goes below £1 then I buy them.
And I bet you buy your coffee at Starbucks you evil fellow. Tim W will be watching!
Do you know – I have in my time – but I confess, as rarely as possible – because I really like real caffs that also serve bacon sarnies
Since Amazon is almost a Monolpoly/Monopsony hardly surprising Richard has no option but to be on sale on Amazon. Selling the book via this route has an ironic justice about it as Amazon are spreading the message that will ultimately undermine them. How is that bad ?
“Please do not be so sexist and stereotypical in your thinking. It does not become you.”
OK I admit I don’t know her exact duties, and you seem reluctant to reveal them. But it is unlikely they concerned political economy.
The question is this: if she had not been your spouse, would you have taken her into partnership or would she have been an employee. I think we know the answer.
So I stand by my suggestion she should more properly be an employee, and that you are indulging in aggressive tax planning.
And the difference is not 1% – the 12.8% is 12.8% that an employer pays on wages.
Final comment on this issue
As a GP (and therefore qualified to run the NHS according to this government, as well as, of course, having substantial experience in managing within the public sector) as well as being a person with qualifications in ethics and philosophy plus some knowledge of politics, management, psychology, human motivation, mental health, and much more she contributed to a whole range of issues addressed in the book – which you clearly haven’t read or you’d know, for example, that all these issues are addressed.
And would I have taken her into partnership? Yes. As I have others currently and in the past. Not least because she is taking significant financial risk on the book, which she has helped fund.
And the 1% is the profit she makes massively understates her contribution. But as we both pay the same tax rate and both pay maximum NIC no tax is avoided, at all.
Or in other words, all you have said is both wrong, and based on both ignorance and prejudice, which makes it rather unedifying.
I won’t expect an apology, but one is due
Richard: an excellent argument as to why she should probably have been a co-author. Physically putting pen to paper isn’t required for that.
Publishers don’t like co-authored books
That’s the reality
And it’s indisputable I did more of the work
Ian, F, as I understand it, partnership profits is passive income — effectively the return from your interests in the partnership. A bit like a dividend in relation to a company. This is unearned or passive income in the sense it is completely irrelevant how much work the partner does — it is simply the entitlement as agreed with the other partners.
In this case, it really doesn’t matter whether Dr/Mrs Murphy did any of the work, or whether her entitlement is 1% or 99% or whether the work was done by her husband or an arms length employee or the Archbishop of Canterbury. It’s irrelevant.
But you very clearly show you do not understand what you are talking about
Partnership income is earned income and HMRC certainly do now (and always have) taken considerable interest in such issues, especially between related parties
So very politely, what you wrote was complete drivel – said for the sake of any reader who might be foolish enough to believe you
I have a confession to make. I’ll be buying from Amazon – so I don’t have to pay Jersey GST of 5%, which is levied on pretty well everything (well, apart from swimming pool repairs, marine diesel for your super-yacht, or anything connected to offshore financial businesses).
I think my conscience will not be troubled by the 70p-odd the States don’t collect as a result.
“Selling books and Kindle editions through Amazon is tax compliant on my part.”
Unless I’ve much misunderstood your argument over the years, ‘tax compliant’ can still be profoundly immoral. That’s why tax lawyers make out like bandits, ensuring that their clients stay a fraction of a mm on the right side of the letter of the law while blowing a big hole through the spirit.
Your argument is identically shifty to those employed by corporate tax ‘optimisers’.
Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.
Try using a tax haven and being tax compliant by that definition
You’re completely wrong – couldn’t be more so in fact
I stress though – I am being tax compliant
I’m not saying Amazon are
But I’ve covered that point already
RichardT
Your argument is used repeatedly in the R-wing press & it is simply silly. It can be distilled to;
“If you use any of the products or services that are produced by a capitalist economy then it ill becomes you to criticise that capitalist economy”
So, we could likewise have said to any activist in Eastern Europe before 1992
“If you use any of the products or services that are produced by a communist economy then it ill becomes you to criticise that communist economy”
Are you really saying that ???
Tell me the old old story, you guys on the right! The thinking is essentislly that unless you are a completre saint, you may not make any critique of the established order. Now the fact is that saints are very very thin on the ground although I have met one or two in my life. The idea is simply to block off all debate because rightwingers are really a bit uncomfortable with debate.
Yes, that’s exactly what people on the right think.
People like that exist on the left too, y’know. For example, by taking the direct opposite line on this issue.. effectively saying that folk can protest about whatever they like and never have to pay regard to how they behave as individuals.
OR, do none of these people exist? Does nobody hold these absurd extreme views? Are these just the result of people taking valid arguments/discussions to absolute logical conclusions, far divorced from what anyone actually thinks, because *neither* side wants to have a proper debate.. as mud slinging is so much more fun?
As I’ve said somewhere above, people who see thing wrong in the world, and call on others to fix them, should consider the choices they make as individuals – both in terms of whether their actions contribute to the problems they’re trying to fix, or whether their actions damage the credibility of their arguments.