The latest tax scandal is part of an ongoing trend. MP's were corrupted by expenses, journalism by hacking, bankers by greed. Now the tax system is being corrupted by politicians and civil servants who have lost faith in the right, and even the duty of the state to tax.
The ramifications are enormous in each case. We've lost faith in politics, the press an finance. If we lose faith in the justice if the tax system the consequences are even bigger though. Once we fail to collect tax - and as my work on the tax gap, often dismissed by those very same politicians now seen to be signing off dodgy tax deals with their civil servants, has shown, we fail to collect at least £95 billion a year - then we undermin government itself and it's ability to supply the essential services our society needs.
But it's more than that: failure to collect tax properly undermines trust and creates level playing fields between the honest and dishonest. Then we destroy the basis fir honest business and in turn for investment, job creation, growth and prosperity.
A sound economy requires a strong, and enforced, ax system.
The party that embraces that is pro-business, pro-growth and pro-fairness.
Whatever it's past Labour has to embrace this now.
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If this is true, then there should be no shadow economy – people would not trust each other and, in the absence of the state would refuse to trade. Instead, as you have previously pointed out, in 2007 this stood at 13.5% of the total UK economy (i.e. 27%, more than a quarter, of the portion of the economy not accounted for by government spending) and was growing.
I regret that I do not follow your argument
I have no clue if you are agreeing or disagreeing with me
I have argued this for years. Yes trust, or put it in other words Taxpayer compliant culture
is the basis for an efficient tax system. Even a draconian tax administration will fail without this for there are plenty of countries with strict legislation who don’t raise much tax.
If, as you say, you need a strong tax system for trade to take place, and that in the absence of government regulation there cannot be trade, then please explain how exactly we have such a large black market, which is not only unregulated by government but participation in which is punished if discovered. Jobs and livelihoods exist in drug dealing and prostitution, and the only thing preventing cash-in-hand businesses from expansion is the risk of discovery. It is perfectly possible – even necessary (from the participants’ viewpoints) – for arms to be traded to gangs on trust rather than in a regulated and taxed market. Is this any clearer?
Are you suggesting you think that a market regulated by fear, abuse, and the degradation and even death of many who participate is an alternative to fair, open, honest, regulated, accountable trade undertaken on the basis of strong regulation promoted by government and paid for by taxation?
If so then the right is even more depraved than I thought.
I am, candidly, staggered by the callousness of your supposed argument. No wonder I did not appreciate what you meant – perhaps I was simply repulsed by the idea that someone could compare these scenarios and treat them as equivalent.
Ed: This comment was deleted as it was offensive to common decency
I am sorry that my post here was found to be “offensive to common decency”. I did not feel that it was so, but I will respect your ownership of this website and therefore your control of what goes up. If I may put my argument in a general context, removed from any particular examples that I suspect were the cause of offence: if the black market is really so bad – “regulated by fear, abuse and the degradation and even death of many who participate” – then why does 27% of the Private Sector choose it over the government taxed and regulated market? Obviously some of this is because the goods and service being trades are illegal, but this surely cannot account for the entire black market.
Because the failure to regulate has created a criminogenic environment that has to be tackled, urgently, and can only be done by strong government if a level playing field, essential for fair competition (even Friedman said so) is to be restored
You may well argue that government regulation would ensure a level playing field, but lack of this cannot in itself actively cause a violent and criminal environment. If you are arguing that the state of nature is violence, then we are unlikely ever to agree as I believe that two people can work for mutual benefit without coercion, and will happily defend this claim if this is indeed the root of our debate. If you believe that there is another external influence (or indeed, more than one influence) causing this criminogenic environment to exist for a disaffected portion of the population, then I would like to know what it is. I would then suggest that, rather than increasing taxation, we aim to deal with these factors directly. If it is the breakdown of families, then we should aim to tackle this. If it is gangs, then perhaps we could aim to reduce the proliferation thereof by encouraging the young to find meaningful employment. If it is drugs, then perhaps we should aim to reduce the degree to which they are consumed. These policies might incidentally require extra revenue to be raised, but this is a far cry from the idea that taxation is intrinsically good.
I agree with you that many people grow up in an environment conducive to a criminal attitude, though I have my own reason as to why it persists. I hope that you would at least agree that high income tax rates do, at some point, begin to obstruct economic growth. Assuming that this is the case, the high marginal tax rates on legitimate income due to withdrawal of benefits alongside the requirement to pay income tax and national insurance – I have personally known people on marginal rates of over 90% – are going to dissuade people from working in taxable areas, and it is a simple fact that you do not pay tax on the proceeds of crimes against the law. In this case, you should either be reducing benefits or cutting taxes (or indeed, both).
I disagree with your opening sentence, and therefore your basis for all that follows.
Of course the absence of government creates a criminogenic environment in large populations – mob rule then becomes the alternative.
And because you’re wasting my time denying that I am closing this correspondence.
how long have these deals been around for in the civil service – you keep championing labour, but were these deals done under their watch or is this this a new thing since the con-lib coalition?
I’ve never championed New Labour
And I suspect some were done in their time
If so I’d condemn that just as readily
I’m not party blind. For a start, I’m not a party member. I’m a social democrat who proposes social democratic policy and supports it where it can be found
50% VAT, no PAYE, keep CT, raise benefits. Let’s see how many people try to wriggle out of that. Also make VAT returns monthly and all businesses register. Keep it simple.
And there’s the ultimate definition of a tax system to squeeze the middle if ever I saw one
Regrettably such simplistic thinking has only one consequence – injustice