Oxford’s tax gap deniers

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There's a letter in today's Guardian from Prof Mike Devereux of the Oxford Centre for Business Taxation. In it he claims that:

Zoe Williams (G2, 23 September) claims that taxation has “a curious void where its academics should be”, and that Richard Murphy is “by a mile, the major thinker”. Both claims are far wide of the mark.

I made the first claim: I think it's true. I did not make the second, and would not: I was a little surprised by it. I think the third is open to debate.

Mike continues:

There is a wealth of serious academic work on taxation from the world’s leading universities.

Not on the tax gap there is not Mike and that was what I was saying. And as if evidence was needed the letter added:

Murphy’s own contributions are often highly questionable.

I hope Mike takes a slightly more broad-minded with students who wish to consider counter-arguments to his views. His evidence to support his claim is:

To take one important example mentioned in the article, the “tax gap” is a dubious concept that requires a comparison of actual tax revenues with what HMRC calls the “amount of tax that should, in theory, be collected”. It is hard to reconcile Murphy’s estimate of a gap of £122bn with such a definition, and it is wishful thinking to believe that anything like such sums could be collected if only HMRC were tougher, or if companies were more ethical.

I added the emphasis, because it is important. I think we can presume as a consequence of what Mike Devereux is saying that he thinks:

1) We cannot work out how much tax should be collected in the economy, so that

2) There is no such thing as the tax gap, which means  by implication that

3) There can, therefore, be no such thing as tax avoidance or tax evasion, and

4) Even if there were such things there is nothing we can do about them, so that

5) Any number I cared to offer on this issue must be wrong, meaning by implication that

6) HMRC are wrong to also suggest any such number, which means that

7) HMRC are also mistaken to consider this 'dubious' concept, and

8) Action taken to address it will be futile.

This is an opinion largely reinforced by Devereux's conclusion, which is:

If Jeremy Corbyn wants to raise significantly more tax revenue, then he will have to raise taxes, and not just rely on preventing evasion and avoidance.

That does seem rather specific: it seems to me that to link the claim to Jeremy Corbyn (which I would not do) is quite erroneous: Mike could have substituted the name George Osborne for Jeremy Corbyn and there would have been no change at all in the sense of what was being said, so I think we can safely conclude that the letter is about politics, and not debate in that case.

And this is, perhaps not surprising. The Oxford Centre for Business Taxation is heavily sponsored by large companies, whose behaviour Mike appears to defend in his letter, and whose behaviour I have heard Jeremy Corbyn criticise. And Mike is a known friend of the cause of those companies. In 2012 he wrote an article for the FT entitled

The best reform of corporation tax would be its abolition

So, let's loop right back to the beginning of Mike's letter where he said:

Zoe Williams (G2, 23 September) claims that taxation has “a curious void where its academics should be”

and

There is a wealth of serious academic work on taxation from the world’s leading universities.

Not that I can see Mike.

I can see denial of there being an issue to address.

I can see political opinion.

I can see a link being made to the interests of large corporations who happen to be your department's sponsors when I have made clear that they are only a small part of the tax gap issue.

And I can even see an ad hominem.

But what I do not see is the evidence of the serious academic research on the issue. And that's what Zoe Williams reported.