I have published a background note to the various sections of the Taxing Wealth Report 2024 that will address issues relating to the administration of tax in the UK this morning:
Background
Many of the recommendations that will be made by the Taxing Wealth Report 2024 will relate to specific tax reforms required to remove the bias to wealth within the UK's existing tax system. I have already begun publishing these recommendations, and there are still quite a lot to come.
However, passing new legislation is not, in itself, sufficient to ensure that the bias within the UK tax system towards wealth is eliminated. There must, in addition, be reform to the administration of tax in the UK if this goal is to be achieved.
Discussion
There are a number of ways in which the administration of tax in the UK currently fails to address the bias to wealth within that system.
Firstly, HM Revenue and Customs are themselves underfunded to undertake the tasks demanded of them. This is an issue that needs investigation, and data to make the case for reform on this issue will be published as part of the Taxing Wealth Report 2024.
Secondly, and more importantly in the first instance, the identification of the scale of the bias towards wealth within the tax system requires that considerably enhanced methodologies be used with regard to identification of the UK tax gap and UK tax spillover effects. If you cannot properly identify the cause of a problem, its scale, and its impact, then you are ill-equipped to address it. The recommendations that will be made with regard to these two issues are intended to address significant current deficiencies in both of these areas.
Third, a tax system requires high-quality information if it is to be effective, fair and ethically appropriate. There are good reasons to think that such information is not available to HM Revenue & Customs at present, not least because of deficiencies in:
- Tax returns.
- The information made available to HM Revenue & Customs by companies and Companies House.
- Information exchange systems from banks and others who are in possession of data that would considerably ease HM Revenue and Customs' job when it comes to identifying those who are not declaring their appropriate tax liabilities.
Recommendations will be made on all these issues.
Finally, the current expectation that HM Revenue & Customs be the source of tax policy recommendations, policy enforcer and the appraiser of its own effectiveness in both these roles is inappropriate: it needs to be subject to better independent scrutiny. There will be recommendations on this issue as well.
Together, these streams of work form a significant part of the Taxing Wealth Report 2024.
Publication policy
My intention is that these issues will be addressed in parallel with the making of recommendations for individual tax changes. As a result, on some days there will be both recommendations for specific reforms and recommendations for the reform of tax administration, but I never intend that there be more than two posts on this theme in a day.
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Excellent – all joined up thinking like it should be.
Looks like the US wants to get more active on taxing wealth – by providing more funding to the IRS:
https://www.dailykos.com/stories/2023/9/11/2192261/-This-is-why-Republicans-want-to-defund-the-IRS
and, surprise, not surprise, Repubeicans are opposed. I am confident the vile-tories & their supporters will likewise perfer that HMRC is funded such that it is not too efficient in terms of going after the rich (ditto vile-liebore). The IRS prioritisation is interesting (extract from article)
The IRS is prioritizing what it calls “cases in the High Wealth, High Balance Due Taxpayer Field.” These are taxpayers with incomes over $1 million who owe more than $250,000 in back taxes. The IRS estimates that there are about 1,600 individuals in this category. There are other categories of taxpayers who will also be coming in for scrutiny:
Construction contractors who pay multiple subcontractors.
High-income earners who use foreign bank accounts.
Large transactions using digital currency.
Mike Parr wrote: ‘Looks like the US wants to get more active on taxing wealth – by providing more funding to the IRS’.
While sense has a chance of prevailing in the USA, Open Democracy is fearful of what is happening here.
Adam Ramsay asserts ‘In the battle of a general election, the cultural grip of the UK’s establishment is strong enough to override voters’ policy preferences. Actually doing the things voters want – *taxing the rich,* [emphasis added] renationalising key services and tackling the climate crisis – would mean taking on institutions powerful enough to take you down. Or, at least, that’s what many Labour strategists have effectively concluded, even if that’s not how they would express it.
[https://www.opendemocracy.net/en/labour-party-big-business-keir-starmer-lobbying-donations-ditch-progressive-policies/?utm_source=twitter&utm_medium=Social&utm_campaign=content_studio]
‘Because despite two-thirds of voters wanting the government to increase wealth taxes, shadow chancellor Rachel Reeves last month emphasised that she won’t. And although 63% of Brits think taxes on the rich are too low, Starmer has made clear that he doesn’t want to raise income tax for top earners, saying his driving principle is, rather, to lower taxes. Only 5% think the rich pay too much tax.
‘Meanwhile, Labour’s £28bn-a-year pledge to invest in a Green New Deal – a plan to boost the transition to a zero-carbon economy – has been cancelled by Reeves, who stressed a need for ‘fiscal discipline’. The policy has wide support among voters, particularly in key marginals in England’s North and Midlands. …
‘Also on the party’s scrapheap are popular plans for a publicly owned energy company and a tax hike on digital giants such as Facebook and Google, as well as pledges to replace Universal Credit and scrap the two-child benefit cap.’
“Corporate lobbyists have successfully pushed Keir Starmer’s party to ditch its progressive policies.” [https://twitter.com/openDemocracy/status/1701175567842787504?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet]
Hello Joe, very good points – showing that democracy – as in “the will of the people” has failed in the UK. UK governments & their policies have for perhaps 3 decades no longer reflected what people want. If you like, most current polit-sicko parties/incumbent gov have surrended not just narrative generation but also policy control to a small lobby group of vested interests/the rich. In turn this means that no political group has a coherent narrative that appeals to a wide part of the population – your numbers in terms of what the population want in a number of areas show this – conclusively.
At some point, somebody, somewhere will spot this. At some point somebody, somewhere will forge a narrative that appeals. It will be a very populist narrative, which will be needed to cut through the meeja blathe. There will also need to be somebody (or some group) that is mentally tough and ruthless (because the opposition is equally ruthless). Welcome to fascism-UK (or more likely IngFas – English Fascism). That is what is facing England.
Trojan Horse Unlimited (formerly the Labour Party) has become a joke party that can stare at misery and come up with nothing progressive whatsoever to stop it! It needs burying!
I can only agree.
But this is because it is the Tories – even when staring defeat in the face -who are still calling the shots.
This looks increasingly like how the Democrats work in the states who ride in on a wave of rejection and hope but end up being funded by the same bastards who funded the the lot they are getting rid of. And merely contain popular sentiment.
I mean what do you expect?
However, this is not unsolvable. All we have to do is change how political parties are funded and they should be funded by the public purse.
Private funding of political parties is corruption. It is a simple as that for me – obvious in fact.
Yes, PSR, ‘private funding of political parties is corruption.
While MEP for the Southwest, Molly Scott Cato refused to see people offering to give her something. She would have none of it.
My view is that anyone who has taken anything more than a hot drink and a snack for themselves or their party should be ineligible for public office.
Any public official who has already succumbed, should be sacked – without waiting for their ‘resignation’.
Also, at the last Euro elections, the Green Party was the most popular party in the South West.
Given the revulsion with both Labour and the Conservatives, if similar voting rules were in place for UK national elections, might Caroline Lucas be in line for being the next Prime Minister?
Orwell is coming true again. The Labour Party has become IngSoc the ruling party. His description of IngSoc in 1984 is quite apt. Blair has authoritarian tendencies too as we saw in his days in office.