David Aaronovitch asked a good question in the Times this morning. It's behind a paywall so I won't quote exactly but the essence was simply "what would happen if everyone did a Jimmy Carr and did not pay their tax"?
No NHS.
No education.
No pensions.
No social services (and wait until you or a relative need them - and then see what you think)
No defence.
No law and order.
And on and on.
Society would fail.
That's what happen when people free-ride.
That's why tax avoidance is immoral. Free-riding is cheating the rest of society. At cost to us all.
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If the amount of tax we are all legally obliged to pay is insufficient to pay for the business of governing our nation, then at least one of three things is true:
1) The funds would be sufficient were not the State so inefficient/corrupt/incompetent
2) The funds are insufficient and therefore the tax rules are poorly written
3) The State is trying to do stuff it shouldn’t be doing
Regardless which is true I don’t think relying on charitable donation of tax revenue to the State is a sensible response.
No, that’s not true
Tax rates are not high enough has not been taken into account
Sorry – your logic is just wrong
I discounted that because your article says we have a problem with tax avoidance.
Which of course indicates tax rates are already too high.
For the tax avoider 1% tax is too high
Your logic is still wrong
Not according to the Treasury.
In an article in the Guardian about tax avoidance they quote official Treasury figures showing that of the 10,000 UK taxpayers earning between £1m and £5m,10% pay between 30% and 40% in tax and 5% only pay between 20% and 30% tax.
So some tax avoiders are clearly happy to pay much more than 1%.
But you just said tax avoiders consider 1% too much.
Care to recant your ridiculous assumption?
It was not a ridiculous assumption: as evidence form the corporate world and tax havens like Jersey shows, people will avoid any tax if they can
It was the point I was making
And only a pedant would not understand it
You’re quite the cynic.
I actually think that rich people tend to be pretty generous if you don’t try and force them.
Rich people will contribute to charity most generously if left alone, but of course you presumably object to that as tax avoidance too.
You’d rather the State take their money and redistribute it on the basis that the State knows best where that money is needed?
Which brings us back to your diatribe about the State spending money monitoring Facebook instead of whatever pet project you personally would prefer the money was spent on.
Ah, that’s why Victorian England was so good for the poor was it – because the rich were so good at looking after them?
Charity failed
That’s why we have – and must continue to have – a welfar state funded by progressive taxation
“I actually think that rich people tend to be pretty generous if you don’t try and force them.
Rich people will contribute to charity most generously if left alone, but of course you presumably object to that as tax avoidance too.”
Might I suggest you read some Dickens. Novels tend to become long lasting classics when they say something universal about human nature which registers with their readers..
Indeed
In response to Ivor..
1. Is this perhaps largely due to the fact that it allows the very wealthy elite to protect their vested interests?
2. Having studied them for years, I can tell you that the rules are by and large well written – it is just that the wealthy elite see 1) above – pay specialists (tax advisers) large sums of money to devote their lives to getting around them (tax avoidance) to not only protect but also add to their wealth!
3. Do you mean by this provide for example the NHS, state pensions and benefits, a police service – military forces to defend the realm? Of course the wealthy elite don’t require any of this??
I think History shows us time and time again the consequences of oppression whether direct or indirect of the majority by a wealthy elite….
But don’t you see, tax is for the little people; and so long as the little people provide enough to keep things shambling inadequately along, as they do, then no worries, really….
What I found interesting was that the response from Carr’s advisers was along the lines that he had done nothing “wrong or illegal”. When will these people understand that the distinction between right and wrong is not the same as between legal and illegal.
Very elegantly put Stephen.
Indeed.
I second you Stuart
Well said.
All we have to do now is get everyone to agree what comprises “immoral” tax avoidance.
Otherwise how will people know how much they should pay?
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.
Tax avoidance is seeking to pay tax in the wrong place, at the wrong time or reporting transactions in ways that conflict with their economic substance.
The Vodafone case (amongst others) suggest your definition of “wrong” is actually quite difficult to pin down.
The only recourse is to the law (or to a nice private negotiation over lunch, which I bet delights you no end 😉
Which brings us back to the “I don’t care if it’s legal, it’s UNFAIR (in my personal opinion)” problem, no?
Er, pardon?
You’re saying there was substance in Luxembourg?
Really?
And there’s the problem.
I say there is economic substance (because I wear a black hat)
You disagree (because you wear a white hat)
Without laws to guide us, whose opinion is used when it’s time to imprison someone?
Anyway, you’ve diverted me from my point which was not “Vodafone paid the right taxes” but was instead “Tax laws are sufficiently ambiguous to make LEGALITY difficult to confirm, let alone MORALITY (on which everyone has a different opinion)
The oiginal commentator (Stephen?) clearly thinks it’s immoral for Jimmy Carr to avoid tax.
I don’t.
Whose opinion shall we use when the time comes to prosecute him?
The opinion that accords with the facts
Not the sophistry to which you are resoring which adds nothing to debate
“The oiginal commentator (Stephen?) clearly thinks it’s immoral for Jimmy Carr to avoid tax.
I don’t.”
You raise a genuine point that people have different views as to what constitute moral behaviour. The thing is that in a democracy/civil society you have a chance for society to form a consensus view as to what that is – and in some cases it will chose to legislate and in others it will seek to use other means to express its disapproval.
I have a pretty good idea that most people will be nearer my view that rich individuals paying 1% tax while ordinary working people on lower incomes pay considerably more is highly immoral – and given that the tax advice industry fails to recognise this or advise its clients accordingly, I suspect they would be pretty supportive of anti avoidance legislation proposed by Richard. You are of course free to argue for a different view provided that you also accept the obligations that come with living in a democratic society.
I would have thought it was pretty straight forward. If you create a corporate or business structure for the sole purpose of not paying tax, (as opposed to achieving some business end such as market share, R&D, investment) then that’s wrong, unethical, immoral, whatever you wish to call it…even if it may be legal.
Ethical business is a subject taught in some business schools, but perhaps the concept of not cheating the tax man is being missed out. If we all follow Ivor’s line of thinking, we’ll all be doing our best to work around the tax system – then we end up with a situation like Greece and Italy. Perhaps this is what the elite – the corporations, the bankers – want. A collapse of government so that they can take its place. Those who can’t afford to pay their ‘services’ or are excess to the system, can go and beg for charity…or drop dead in the streets as they do in many third world countries. Welcome to the new Feudalism.
The idea is to change the law, Ivor. Why can’t you face the facts – your tired old 1920s thinking has failed. The wealthy are paying tax at lower rates than those on lower income and wealth levels. Your way of doing things has failed so move out of the way and let’s try something different.
By the way, it’s not just about saying the state knowing better. We live in a democracy. The government is elected by the people – I think your view is the rich know better than the unwashed!
“The opinion that accords with the facts”
What FACTS?
The only facts available here are that Jimmy Carr has done nothing illegal.
Your claim that what he has done is “immoral” is not a FACT, nor is there any data you could sensibly supply that could convert your assertion into fact.
You and your “supporters” think his behaviour is immoral.
Me and my “supporters” don’t.
Those are facts.
The facts relate to how the deal was structured and the economic substance it represented
The avoidance arises when they do not agree
It’s not hard to tell the difference unless you turn a blind eye as you are
Please do not waste my time again as a result
You’ve decided not to publish any of my other comments, which of course is fine – it’s your blog.
You are of course a coward for having done so, but hey ho.
I won’t comment here again – I now understand that this is essentially a forum for deranged Lefties to vehemently agree with each other.
Good day to you.
I advised you that you were wasting my time and under the moderation rule would be blocked for trolling
I did what I said
And will continue to do so
That’s not cowardice – it’s called editorial freedom to keep nonsense off the site
Just heard you on Radio 4. I thought you gave a decent account of yourself. I would suggest that Jimmy White concentrates on snooker or whatever he does.
On the basis that I am making up the shortfall in tax revenue for the likes of Gary Barlow and his merry men, then I’m sure he’ll have no problems with me downloading his music for free on the internet then?
Errm?
So Gxxx Bxxxxx avoids tax on his income,and you`d avoid VAT on the purchase of music media by downloading?! Plus it`s illegal anyway-but I`m sure you really don`t 😉
I would like to see what the Jersey goverment would do if the top 20 employers over here set up K2 type schemes in the Cayman Islands so there staff could reduce their income tax and social security payments.
Would Geoff Cook, Senator Gorst et al, keep schtum and shrug their shoulders like they have this week?
Or would the find it morally repugnant and a threat to the islands finances and legislate or take action against it?
In my mind they would have no option but to take action, our defecit is big enough as it is so they could not afford to ignore it and lose the income. Which just about sums up my view of these schemes, if you’re not happy for it to be done to you how can you condone or promote doing it to others, it stinks.
Genuine question – will any of the tax advisers/HMRC employess be covered by the whistleblowing legislation if they disclsose the names of all those involved in K2 and similar schemes in the public interest? What do they have to do to afford themselves such protection?
Very unlikely
See http://www.direct.gov.uk/en/Employment/ResolvingWorkplaceDisputes/Whistleblowingintheworkplace/DG_10026552
Whistle blowing requires considerable courage and an end to your career
“In order to have reached the peak level of power it currently enjoys, the ruling class has had to inflict growing threats, sabotage and pain on the underlying population”
http://www.zerohedge.com/news/chart-scares-1-most
It’s really good to see The Times “outing” tax avoiders and also good to see a sensible comment from David Aaronovitch. I wonder if Rupert Murdoch knows that his flagship UK broadsheet is producing good journalism for the first time in years? I’m amazed he let this stuff make it into the newspaper.
Quoting Ivor – Rich people will contribute to charity most generously if left alone, but of course you presumably object to that as tax avoidance too.
You’d rather the State take their money and redistribute it on the basis that the State knows best where that money is needed?
Who then goes on to say – The oiginal commentator (Stephen?) clearly thinks it’s immoral for Jimmy Carr to avoid tax.
I don’t.
Whose opinion shall we use when the time comes to prosecute him?
This second from Ivor completely destroys his first. He accept that morality is subjective and there is no accepted definition of right and wrong, yet he also thinks that this subjective approach to morality doesn’t apply to “the rich”, having previously stated that they (i.e. all of them) will be “generous” – for which read “the rich” (whoever they are) do infact have an absolute morality which the rest of society are to accept on faith as being benevolent.
Sorry mate, that just doesn’t fly. The welfare of this country and its general citizenry is too big and important a matter to be left to the whim of the few. As Mr Cameron rightly says*, “We are all in this together” (although that’s currently an aspiration rather than a statement of fact) so we ALL need to be in it. That means democratic rule by an elected body mandated by the people, not a reliance upon the goodwill of a privileged few, which is directed where they see fit (by dint of giving to their chosen charities) rather than where it’s actually needed (as can only be achieved through central taxation).
As I said, morality is subjective and there are no absolutes, so I won’t say what I think of the morality of Ivor’s position.
*Even a stopped clock tells the right time twice a day
I found this on Peak Perfomance’s website – the company which advised Jimmy Carr
http://www.peakperformance.uk.com/source/documents/Peak-Performance-Service-Standards.pdf
If they or Ivor think what they did was “ethical” then it really just demonstrates how extreme and out of touch they are with modern standards.
I also found this post on their blog quite interesting
http://peakbusinessperformance.blogspot.co.uk/2010/05/whats-real.html
Clearly their seminars covered the presentation of the “loans”.