I've not been a regular user of the spoken word on this blog, but I thought I might give it a try.
Treat this discussion of why naming and shaming individuals who use tax arrangements helps deliver tax justice as an experiment, and let me know if you are interested in more, and what on.
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One of my problems with you – there are a few to be honest – is the double standards you employ, quite shamelessly. Naming and shaming is clearly something you like, you did it to chris Moyles. When it’s your political friends, however, you take quite the opposite view.
So, if you don’t mind, I won’t help you here; it’s a morality thing for me!
I did not name and shame Moyles – others did – and I commented on it for all the reasons that I note in the post
As for the dual standard – that is a figment of your imagination, but much of what you say is
I will happily name companies
Is naming and shaming people and companies who comply completely with the tax law any better than the lynch mobs who thought a number of indivdulas were paedophiles and so took the law into their own hands.,
The only foundation that you and others have for naming these people is that you don’t like what they are doing. They are not in conflict with the law, yet, and if they were it is up to HMRC to take action. It is no more than acting as a vigilante.
If your claim is true it is odd owe many of them now owe tax or are under investigation because the might
Would the EU be looking at IT companies, Starbucks and Amazon without naming and shaming? I don’t think so
In which case you comments are wholly out of order and utterly inappropriate
The EU does not impose tax, you should know that. They are investigating whether or not there has been inappropriate state subsidies offered.
Perhaps you could elaborate on just how many laws have been changed through the naming and shaming initiative?
What law is likely to be changed as result of the rather ironic attack on Nandos Chicken by the Guardian?
Let’s start with the whole OECD BEPS process, shall we?
its precisely because those in power won’t take action that naming and shaming is necessary.
if the authorities refuse to act in the public’s interest then the only solution is give the public the power to take action themselves. anyone who feels strongly about tax avoidance can then adapt their behavior accordingly; no longer eating at Nandos, stopping going to see Micheal Caine’s films or buying Arctic Monkeys records, etc.
Only those with something to hide are scared of transparency.
“Only those with something to hide are scared of transparency.”
Err, why should any individuals tax records be open for inspection by the public?
I haven’t said they should be
And re Michael Meacher’s bill: that was his bit, not mine, for the record
Well then, why don’t you take this belated opportunity to discuss Ken Livingstone’s tax affairs?
What is there to say?
He used an arrangement the government has tacitly given up opposing
I have been forced to change position on it as a result
I cant read / listen to this in my office as everyone will think that I am a lefty loser or socialist idiot.
I recognise that audio does create problems….
Are you in the right office?
That’s exactly my point! Your firends: legal, move along. People you don’t like, oh what’s the phrase? Too many people hide behind the the defence that it is legal.
As I say, it’s a morality thing for me, either it is right or wrong. For you though, it depends on who it is.
So obviously untrue it is absurd, as I have proved in the case of the Guardian
Please don’t call again
You are just a time waster
Not untrue at all. You have barely criticised the Guardian, so you haven’t “proved” anything. In fact if I recall you defended the Guardian to the hilt, saying what it did was perfectly legal.
Similarly with Livingstone.
Absolutely wrong
http://www.taxresearch.org.uk/Blog/2008/03/07/the-guardian-is-wriggling/
Please do not waste my time again
You will be deleted
One criticism in all these years is minimal given the number of times those providing comments have raised it on your blog.
I have little doubt that if the articles had come from certain other papers / groups you would, whilst also criticising the individuals in question as you have, have raised the hypocrisy of the paper/group tarring others as tax dodgers.
Find the number of times I have attacked the Mail
Probably once as well
Stop playing fantasy paranoia is my suggestion
Richard
Your link was to a 2008 posting. I’m sure Chris Howker was referring to the more recent use of SSE by the Guardian group which was contemporaneous with Vodafone’s use of SSE.
I recall you using Vodafone as a terrible example but barely (if at all) referring to the Guardian. I’m confident you could provide a link to an article from you condemning the Guardian in similar terms to those used for Vodafone.
As for Ken Livingstone, you could hardly be expected to criticise him for paying dividends to save on NIC when you have done the same yourself in the past. I’ve often thought you would set a courageous example if you followed Starbuck’s lead and pay tax (employer’s NIC in your case) which would have been due if the ‘spirit’ of tax law had been followed.
You can’t condemn SSE because there is no way round it
There is no charging provision
I have not condemned Vodafone for it
I am not sure they have used it
If I paid the NIC I avoided by paying dividends the Revenue would need to work out how to cash a cheque for £0.00
This is your last comment
The problem that I see with naming and shaming is that it would involve naming persons whose tax arrangements are subjectively “wrong” as they are presumably not illegal and not objectively wrong.
Could it leave the namer and shamer potentially open to a claim for libel?
If they get it wrong, yes
But there are ways of saying things
“…there are ways of saying things”
Absolutely: you could avoid a libel charge by naming someone in such a way that the substance of what you say is shaming, but the form is not.
Ha Ha
Richard, many of the poor have been named as a cause of the country’s economic difficulties ( benefits bill) and induced to feel shame. The number of comments one sees on newspaper threads about the ‘idle poor’, ‘choosing not to work’ ( a phrase used by Duncan Smith on the Andrew Marr programme). Many of those who are unemployed report a rise in critical comments and the tabloids run a constant diet of ‘scrounger’ stories.
It would be good to see some acknowledgement of that from some of your critics.
I agree
if i had a pound for every time someone tried to equate what is right or wrong with what is within the law on this blog i’d owe the taxman a small fortune.
just because it’s legal doesn’t mean it’s right. as for who should judge what’s right and wrong; let the public decide by putting it all out in the open.
i sometimes wonder whether many of the comments on here are a deliberate effort at engaging Richard in semantics as a way of drawing him away from the important work he is doing.
I am sure you are spot on with your last comment
Thanks
and the uncertainty would harm the UK as a place to do business
There is no uncertainty
The requirement is to pay tax due
That is certain and it was not
Everyone knows where they stand now
Richard, given the cumlatively very large and regular sums you have received from the Joseph Rowntree Foundation, don’t you think the Spirit of the Law obliges you to acknowledge the source as income and pay tax on it, with backdated interest?
????
I have always paid tax on that income
There is uncertainty where the tax due is based on subjective opinion rather than the law
It will always be so
But companies need not exploit it
Mr. M., you wrote “The requirement is to pay tax due…” and thus haven’t the companies done just that if they’ve not broken any laws?
It’s just that I’m not 100% certain how companies can be said to be breaking the law if they pay what they owe according to the laws in force as enacted by the HoCs.
No one says they’re breaking laws
I am saying they are breaking the spirit of the law
And their social contract
Really? Always? Because the Tax Research LLP accounts have contained statements such as “which the JRF and HMRC have agreed is not chargeable” and “for which no services were given” and describe it as a grant.
It is a grant
It is not VATable
No services are supplied
And in some situations such grants are not taxed
I have always declared it for income tax
I always told JRCT I would
I can’t understand the fuss….you got a grant and told everyone about it. Hardly seems that much of a big deal.
It isn’t
And I voluntarily put the accounts on public record
Thanks
What a great idea!
Can I take the opportunity to ‘name and shame’ one of the biggest tax avoidance schemes I know of? A lot of local councils have been running schemes to avoid paying landfill tax by offering taxpayers the opportunity to recycle their garbage, a series of entirely artificial business transactions for which there is no economic need, and which would not otherwise ever be run as a ‘for profit’ business.
They even admit their aim is to avoid paying landfill tax in their advertising literature! Subtle, they are not!
So can I look forward to you condemning all the ‘recyclers’ who have taken advantage of this massive nation-wide tax avoidance scheme? After all, we should all be paying our fair share of landfill tax, and not leaving the whole burden on those who don’t recycle.
Thank you.
Can you give examples?
Mr. M.,
There’s this:
“Landfill tax goes up by £8 a tonne every year and for 2011 alone, our taxation costs were around £400,000. If everyone does their bit we can change this.”
(https://www.nelincs.gov.uk/news/2012/apr/changes-recycling-waste-services/)
Seems to sort of uphold the argument – ‘up recycling and avoid taxes’.
Oh for heaven’s sake – if that is the argument it’s time you stopped being stupid
The ideal and fill tax take is zero – precisely because we want yo reduced waste
The tax is designed to induce behavioural change, not collect revenue
Very politely, this is ridiculous
Very politely, I’m disappointed.
Tax avoidance schemes are fine if the avoidance involves you doing something we want you to do, but not otherwise? What sort of principle is that?
Anyway, I disagree. I think they *are* designed to raise revenue. Moral taxes can be raised higher without strong public protest, and taxes on things people find hard to avoid or give up can be raised without people avoiding them. The ideal landfill tax take is a huuuge pile of money that nobody can complain about you taking without making themselves look bad!
If you wanted to reduce landfill, you would just ban landfill.
But now of course people will argue that tax havens are just another form of incentive tax, setting tax levels to encourage or discourage a desired behaviour (i.e. to move businesses and employment to one’s country) and by your own principle to be encouraged. What’s the point in setting low taxes to attract business, they will argue, if you then turn round and hit them with high taxes and drive them away? Tax havens set the taxes as they do to induce behavioural change, and thereby increase revenue. The same with tax breaks and allowances.
If you think tax avoidance schemes are allowable when they get people to do what you want, it’s hard to argue consistently about the schemes that get them to do what somebody else wants. Very disappointing.
Very politely, I am disappointed to.
You appear to have very little understanding of why tax is charged. As I have argued, often, there are five good reasons:
1) Raising revenue
2) Repricing goods and services
3) Redistribution
4) Raising representation within the social contract and democratic processes
5) Reorganising the economy
If you think that tax is all about raising revenue then you are bound to get your analysis wrong, as you do.
In addition, you appear to have very little understanding of what tax avoidance might be. Tax avoidance is not reducing a tax bill. If tax law encourages a person to behave in a certain way that results in their tax paid being reduced, then the resulting tax saving is tax compliant behaviour. It is not, cannot and never will be tax avoidance, because it is completely in agreement with the law.
Tax avoidance is the process where a person seeks to achieve a tax saving in a way that has not been anticipated by those creating the law.
Your analysis belongs to another century.
“As I have argued, often, there are five good reasons”
Which of these five covers the landfill tax?
“In addition, you appear to have very little understanding of what tax avoidance might be. Tax avoidance is not reducing a tax bill.”
It seems, then, to be an unfortunate choice of terminology. Plain English would be better.
“If tax law encourages a person to behave in a certain way that results in their tax paid being reduced, then the resulting tax saving is tax compliant behaviour. It is not, cannot and never will be tax avoidance, because it is completely in agreement with the law.”
That sound more like a description of tax evasion.
“Tax avoidance is the process where a person seeks to achieve a tax saving in a way that has not been anticipated by those creating the law.”
I don’t think so. Legislators have a choice between using financial incentives and using regulation. They use regulation when they can anticipate and bound the range of specific behaviours they want to allow/disallow. They use financial incentives for those cases where they cannot – where they wish to allow people room for creativity in how they achieve the desired effect, (or where they have no jurisdiction to regulate). The entire point of using financial incentives is to encourage behaviour that the legislators have *not* anticipated or have no moral right to control.
Tax avoidance is avoiding liability for tax. That’s either a legitimate motive for a behaviour or it isn’t. If you allow its moral legitimacy when it happens to be convenient, it is legitimised generally.
If the moral principle you want to promote is that people should do what the government wants them to, then take that as your principle. People should recycle because the government wants them to, irrespective of whether they get any financial advantage. In fact, getting a financial advantage at the expense of government revenues morally compromises their decision. People should want to pay more tax. So you ought to charge higher taxes for recycling so that the good people can do is reinforced – higher taxes *and* obedience to the State. It’s like offering people stolen goods if they do what you want: you put good people in an awkward position of deciding which is the worse wrong, and you dilute the message on the wrongness of taking the incentive.
You can, if you like, argue that since many people *do* think it is morally legitimate to reduce their own contribution to the government’s revenues as much as possible, and you’re not allowed to forbid them doing so, then it’s a pragmatic way of partially achieving the intended effect. But that doesn’t make it *right*. It doesn’t mean you shouldn’t speak out against it.
Everyone who believes in the right of the State should seek to *maximise* their own contribution. Do the things the government is trying to encourage, but then pay the tax anyway. If you’ve paid all the tax required by law, but find you’ve got more than you need to survive on, then pay all the extra to the government. The principle is set out clearly in Matthew 19:21 – “Jesus said unto him, If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me.”
“But when the young man heard that saying, he went away sorrowful: for he had great possessions.”
Thank you for your comment.
Unfortunately it clear is that you are not engaged in any form of meaningful exchange from which any advance in understanding might result: you have simply rejected the suggestions I have made and substituted terms that make no sense in any informed debate on these issues
As such I will not be responding further.
Hmm… I wonder where in economic litterature you can draw the line between the design of taxes to affect behaviour and to raise revenue, with regards to economic effects. It reminds me of the internet meme here: http://memegenerator.net/instance/26201568: If cigarette tax reduce smoking, does income tax reduce working?
In fact, many governments openly state that typically pigou taxes are revenue raisers, which they would have to replace if not in place.
Most Pigou taxes – http://en.wikipedia.org/wiki/Pigovian_tax – are an addictive items
Is landfill addictive?
And please don’t ask me for economic literature. I refer you to a recent answer to Tim Worstall
The fact that pigou taxes are often on on addictive substances, are also why they are efficient revenue raisers, inelastic demand and all that, which also applies to some of the other excise-type tax objects like fuel. My own government (Norway), frequently admits in their own budget documents that taxes on cigarettes, alcohol, cars/fuel, are both meant to reduce consumption (ciggies and drink), and to raise revenue, or so called “fiscal excises”. I quite like this honesty, and it also leads us to the conclusion that the morality surrounding taxes is limited to the need of the state to raise funds (ignoring the MMT view), and on the taxpayers to pay what is legally due. Noone would be as silly as to say that avoiding to smoke is tax avoidance, without tongue in cheek, but it still reduces the funds available to the state, which would need to be raised elsewhere.
You ignore the reduced spend that would result from cutting smoking, I think
Howard Reed is better able to comment than me on that, but I think it might be significant. Smoker’s don’t tent o have cheap healthcare
That´s a separate argument. Smokers have fewer care-home days as well. The point is that tax policy is different in time and jurisdiction, and governments do tax certain items with the sole intent of raising revenue. The morality surrounding legal adjustments in behaviour of taxpayers to either corporation taxes, cigarette taxes, VAT and so on, is then grey, at best. I find the only consistent moral view of tax is on what people do not create, but get benefits from, and on externalities which would imply land value tax and severance/pigou taxes.