Nick Clegg has said this morning on Radio 4, and as now reported in the Guardian, that the Liberal Democrats intend to remain at the forefront of the battle against excessive executive pay, and wants the budget to contain measures to clamp down on tax avoidance.
He said:
he was determined to target the "wealthy elite or large businesses that can pay an army of tax accountants that can get out of paying their fair share of tax. They treat paying tax as an optional extra in which they can pick and choose the taxes they pay." It left millions of hardworking families angered, he said.
But all he referred to as an answer was Graham Aaranson's general anti-avoidance principle - and that is only intended to tackle the most egregious of cases.
He's got to do a lot, lot better than that to close the tax gap of £95 billion.
If the Coalition is serious about this issue it should e talking to the Tax Justice Network now.
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One thing that has not registered is the scale of the tax avoidance that exists. When even one of our local jobbing builders is running around in a Guernsey registered car and has his company based there but uses local self employed labour it tells its own story. And why are so many of his refurbished properties standing empty?
£95 billion avoidance and evasion combined – and still they deny it
Richard, we all know this is hot air but at least you and others have got the subject onto the agenda. Got to just keep on keeping on.
Thanks, and agreed
It would be interesting to apply the Aaronson principles and draft law to tax avoidance over the last five years and predict what the outcome would have been.
How much money lost to avoidance have been saved?
Could any tax avoidance affect by the law have been re-designed to avoid it and work as planned?
Could such a law actually have cost money, by encouraging the use of schemes that purported to comply with the law?
It’s doubtful that any answers to these questions would be convincing. So that leaves us either regarding avoidance as acceptable or criminalizing it. Criminalizing it, by stealth of course, would make most sense.
I regret to say the Aaronson principle would have saved little
Some of us wanted something much tougher
I don’t think Nick Clegg was ever suggesting that anti-avoidance measures would be sufficient to fill the entire black hole. He was rather saying that it was the right thing to do. A moral argument, not an economic one necessarily.
Then he shouldn’t suggest in any way it will – and he did
Johnathon –
If you’re right, then that rather suggests that Nick Clegg is aware of the need for measures which will successfully and effectively counter tax avoidance, but will not take steps to put any such measures in place, preferring instead to introduce a fairly toothless General Anti Avoidance Principle.
He might as well have said “I know there’s a problem… but I’m not going to do anything about it. But aren’t I an angel for recognising the issue?”
To which I might respond “No, you’re a pointless, stuffed shirt who’s wasted the only period in ‘government’ that your lot are going to get this side of Judgement Day”.
We need a more courageous brand of politician… if only someone would cry out for such courage… perhaps in a book or something? What would such a book be called, I wonder? 🙂