From the Daily Mail this morning:
The Big Four accountancy firms are the greatest threat to democracy on the planet because of their activities in helping companies avoid tax, according to a leading campaigner.
Richard Murphy of Tax Research UK said PwC KPMG, Deloitte and Ernst & Young are a menace to the democratic process due to their schemes to help large companies such as Vodafone, Apple and Amazon to deprive government coffers.
‘The biggest threat to global democracy is not North Korea, it is the Big Four accountancy firms. The threat is that they undermine the revenues that elected governments expect to receive,' he said.
‘If you undermine government revenues, then you deny them the chance to fulfil their democratic mandate and the electorate gets fed up. It is fair to say that many FTSE 100 companies use Luxembourg for group financing. I wish I could tell you how much revenue is lost to the UK exchequer as a result. Work based on IMF data suggests there are more flows through Luxembourg than any other financial centre in the world.'
Yes, I did say that. And I think it's true.
If you want the one consistent thread that holds tax abuse, tax havens and the companies that dominate the globalised world who seek to avoid their tax obligations then it's the Big 4.
And the result of their actions is that they endorse tax abuse - and the consequences of that are now apparent as state after state faces deficits with the cost being loaded on the poorest in society.
And yes - that is accountant's fault. Democracy is now at risk. And they have played a big part in that by proactively seeking to undermine it.
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A strong valid point that is well made. We need a loophole catch all in tax statutes that prohibits the use of any device that undermines the legislators intent for tax. But we also need to acknowledge that the UK tax rates must come down after the financial emergency. With marginal rate of tax on income standing at 70% (c20% of which is employment tax) we have reached a level that deters work and investement. The net ffect is a tax loss. I am certain of this because I have personall evidence. I have cut my work down to three days a week. To work an extra day the tax take means I wouldn’t start earning money for myself until 2.30 in the afternoon. You could say that I don’t have the moral right to deprive the state of its share of the value of my labour so I should be sent a bill for the tax on the work I choose not to do – but that’s not very democratic. Much better to set tax at levels that incentivise people like me and employers who can choose to locate my type of work in lower tax economies. I am an anti poverty campaigner. I pay my tax. I oppose tax avoidance but I also oppose high tax regimes because they deter economic activity and therefore reduce the tax take. I spent five years working for a Swedish company in the 1990s and I was astonished at how the average Swede 1) was so unwilling to work extra hours and 2) evaded tax. Far from being an egalitarian Utopia it was a nation living through a crisis of hypocrisy bred by excessive tax. My former boss became a tax exile on the day he sold the company – like so many other Swedes in his position – do high tax created two losers. He did not reinvest his wealth in a new start-up in Sweden so the Swedish state lost out and he lost out because he had the means to escape a high tax economy -,which effectively divorced him from hus friends and family. A lower level of high tax would have avoided both theses losses.
Respectfully, real evidence simply does not suppoirt your case
Philosophically you cannot get an ought from an is – but that’s what you’re trying to do
And the evidence of Laffer effects is that they don’t exist at current tax rates
Mr. Murphy
So what you are saying is that the most important aspect of democracy is taxation? Nice.
In addition to that, you also say that everything the state does is by default a good thing, because it only does the “will of the people”. Nice.
All the wars, all the bailouts, all the corruption, all the bureaucratic waste…that’s all just the will of the people.
As a tax consultant, I must say that it is comforting and encouraging to see that this is the intellectual level of our critics. Mindless, spineless worship of the state. All money belongs to the state and the bureaucrats of HMRC should have full discretion to decide how much the subjects will be allowed to keep. The more money taken from the private sector and given to the state the better.
Well, that is your position. My position is that taxation is theft and the more I can help people and business to lesser the state sanctioned looting, the better.
Respectfully – your interpretation of my position is pure fantasy
I feel sorry for your clients if you research or understand tax as poorly as you have researched and understood my position
Please trying reading The Courageous State
Or alternatively – think before you ink as my teachers used to say