I share this, which has literally just been published. Due to time pressure this morning I have not even read it in full as yet, but the message is blunt and if true (which seems plausible to me), is the clearest indication that the assault on tax havens needs to continue and that increased focus on evasion (as I have ling argued) is required:
Incidentally, the idea that just three percent of taxes are evaded in Scandinavia seems very unlikely indeed.
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In a similar vein, it’s fairly well established that the wealthy are less generous in their donations to charity than poorer people, relatively speaking. In the tributes to Roger Moore who died last week, he told a story which perfectly captured this.
As a UNICEF ambassador, if he was flying BA, he would often walk through the plane to support the collections that BA make for UNICEF. As he described it, in Business class he’d get a few donations, in Economy lots of people would contribute, but in First Class they’d look out the window and ignore him. This is Roger Moore, a hugely famous and widely loved star
Whether it’s voluntary or mandatory payments, sadly the wealthy will only contribute to society when it’s made unavoidable. With honourable exceptions.
The evidence that this is the case is compelling
The exceptions are sometimes hard to describe as charitable
If you need to attract publicity for your donation is it charitable or conspicuous consumption?
The genuine exceptions are those who tend to avoid publicity. Working with a major chairy, one saw both types. As you say, the evidence to support the case is pretty compelling
@ Richard
Here is an interesting podcast about whether the rich are less generous than the poor:
http://freakonomics.com/podcast/rich-less-generous-than-poor/
There’s some interesting graphs with the report. It shows that in the range from 0 to 99% the biggest tax evaders are the poorest 10%. In other words the 0-10% evasion measure is higher than an interpolated measure for the 89-99%.
It’s only for that single percentile above 99% that the evasion rate turns seriously upwards.
From their small sample of outliers, Zucman and his colleagues appear to be onto something. The analysis of the Norwegian amnesty was interesting. It said this was an effective measure. Also interesting is the over-representation of foreign nationals.
Worth a read to the end.
Tonight…
No idea what your point is Warren? Why the focus on one particular statistic?
I read it to the end and it says that:
“we estimate that the top 0.01% of the wealth distribution–
a group that includes households with more than $40 million in net wealth–evades about 30%
of its personal income and wealth taxes (Figure 1). This is an order of magnitude more than
the average evasion rate of about 2%.”
Do you think this is good? Are you a supporter of the Scandinavian model of taxation?
My family used give around a £120 per adult (myself and my partner – both public sector workers) to charity on a yearly basis. I think together it was £240 per year for Cancer Research, Battersea dogs home and Shelter. We’d done this for years – as far back as the mid 1990’s – I even donated when I was a mature student from my grant and part-time work.
My partner still does but I stopped as of 2015. I tell people who ask me for funds that as long as the Tory chancellor keeps taking money off me, I will not donate.
I would like to see all people affected by the drop in wages go on a charity strike. I’m serious – I really am. So that the charities could then pass this message onto the Government.
The only people I donate to now is 38 Degrees and I tell other charities that I do this because 38 Degrees actually try to stop bad things from happening in the first place rather than dealing with the consequences of bad policy afterwards – which is what many charities do as far as I am concerned.
I recently had a debate with a cold caller from Cancer Research when I asked her how much time the charity put into highlighting the role of and campaigning against corporations who create toxic environments that actually contribute to cancer rates rising.
She couldn’t tell me.
Just so I do not come along as a totally heartless bastard, I do dip my hand in my pocket to contribute to charity drives at work.
But that is it for me. Sorry. I’ve lost something like £3500 in wages since 2010 through no fault of my own.
As for tax evasion, it is rife in all classes that I deal with – from cash in hand at the lower end to the trusts the more affluent members of my own family circle use.
We need more people to police the system. Those at the lower end have an excuse in that wages can be very low these days and any tax just seems like a burden.
I had to bite my tongue when a friend of ours (who earns more that my partner and I put together) and who had just yet again moved house to an even more expensive home was moaning about her taxes.
She totally failed to see that she had voluntarily over leveraged her finances and was now having buyer’s remorse because of the stupid prices in our housing market. It was not the tax system’s fault that she had to tighten her belt – she should not have bought a house with a dodgy roof (sure – she knocked down the asking price but she is left to fund the works now) and has a garden so big she now needs a motorised mower to mow it!
Interesting. But what about gift aid? I earn twice the median average full-time salary for the UK, and consequently have vastly more than I need, so I donate thousands to charity each year. Gift aid increases my donations by 25%. Now I don’t know how much you earn, whether you have plenty or are just about managing, or have too much month left at the end of the money, I also don’t know if you spend your money on a £500k house, a £40k car, two luxury holidays abroad a year and eating at restaurants every night, but this I do know, if you want to complain about high taxation, gift aid and force the chancellor to pay back the income tax! Of course most people in the UK don’t pay high amounts of tax, with the exception of the very poor on benefits, with the 41% taper of tax credits and 65% cut of housing benefit combined with income tax and National Insurance resulting in a marginal tax rate of 91% for those earning just £11k per year. In reality most people’s financial problems are not caused by high taxes, but by low wages that haven’t kept pace with inflation, and inflation indices that don’t reflect the true increase in the cost of living due to the under representating private rent.
While we live in a society that allows the richest to avoid paying tax, whilst benefitting from public services and infrastructure, including roads, railways, education, NHS, social care and benefits that subsidise poverty pay, I believe it is right that those who earn considerably more than average donate to charities that work with the poor, homeless and indebted, because after 38 years of neoliberal madness, giving too much to the rich, and cutting public services and the social safety net to give tax cuts to the rich (including people like me), those who can should donate what they can and live within their means. In my book the rich can get their luxuries once the poor get their necessities.
Given we now have three leaders of political parties who claim to be Christians (Theresa May, Tim Farron and Jonathon Bartley) I am surprised the need for the social safety net to look after the poor is not higher priority in the election debate. After all Christ said, “treat others the way you would like to be treated” (Matthew 7:12 paraphrased). And given the Tory’s stance on benefits and investment, despite the housing crisis, the increase in poverty and homelessness, the inability to pay for state schools while funding vanity projects of grammar and free schools, and pretending private schools are charities!, it makes May an easy target for attack since Tory policies don’t match her Christian beliefs. But given the shortfall in public finances, despite the supposive rise in GDP by £300bn (most of which is probably speculative caused by yet another house price bubble) they can’t ignore the need to raise taxes after 7 years of tax cuts to the richest and corporations (as well as rising the income tax threshold, which only affects those who already earn above the threshold), but Tories generally increase the tax burden on the poorest through VAT and NICs, while cutting the benefits that help the poorest cope with these higher taxes, rather than reversing the cuts on richest who can more than easily afford to pay, even if it means going without some luxuries. My view of charity giving is this: while my tax burden keeps decreasing, and this government keeps neglecting to look after the citizens of the UK that were elected to look after (when it is their financial incompetence and ideology that ensures the deficit is never reversed), mistreating the poor, sick, disabled and mentally ill, I will give some of my excess to charity because it forces the chancellor to dig into his pockets and give to those who are generally in need, instead of bankers, millionaires, oil barons and tax dodgers.
You found a great excuse. You know fine that your action/inaction is not going to have any effect at all on Government policy, but it will affect the charities you used to support.
Sorry, I really don’t think you’ve thought this through.
Even though tax evasion is by its very nature secretive and we have little evidence, it is obvious that massive tax evasion is going on among the very wealthy and super wealthy. If society is to be just and fair we must proceed on this assumption.
[…] have already noted the new research byAnnette Alstadsæter, Niels Johannesen and Gabriel Zucman on tax evasion in […]