The far-right are coming for tax

Posted on

I have published this video this evening. In it, I argue that far-right politicians hate government, or so they say. For decades they tried to deny it revenue by operating from offshore. Now, they're trying to deny funding to onshore tax authorities. In both cases, the aim is the same: they want to undermine the state by denying it the funding it needs.

The audio version of this video is here:

The transcript is:


The far right are coming for tax. I make the claim very deliberately, because I'm quite sure it's true.

Let's be clear who I mean the far right are in this case. The far right are those political parties who are built in the mould of Donald Trump's Republican Party. They do, of course, have fans in the UK. There are UK political parties who appear to adopt almost every policy that the Republicans do. And therefore, whatever I'm saying here will probably apply in the UK at some time, even if it doesn't already.

And when I say the far right are coming for tax, what I'm referring to is the fact that it seems that the Republican Party in the USA is doing its very best to defund what is called the IRS, which is the Internal Revenue Service in the USA, which over here we call HM Revenue and Customs. It's their tax authority, at a federal level, which collects money to fund the US central government.

Now, what are they doing? In essence, they're doing two things.

One is, they're reducing the powers of the IRS, wherever they can.

And two, perhaps more importantly, they're trying to deny it money. Plain straightforwardly, what they're trying to do is reduce the capacity of the IRS to collect the money that is owing to it.

And in particular, again, in two ways.

Firstly, they're trying to prevent it computerising most of its records. Absolutely incredibly, vast quantities of the records of the IRS in the USA are still manual on the basis that there's nothing else to put them on because the computer systems that have been funded for the IRS to use are simply not up to the job.

Secondly, the Republicans are trying to deny the right of the IRS to undertake the audits of the wealthy in the USA. who, in particular, are the most likely to defraud it of significant amounts of money.

I'm not saying they are necessarily the biggest number of fraudsters. What we know is that in the USA, nearly half of all self-employed people do not declare all their income. Ample surveys suggest that. But, of course, the wealthy have more money, and therefore the losses when they evade taxes are bigger. And the USA has a peculiar tax system which works on the basis of audit.

Audit means that you are called in to have your tax affairs torn to shreds by the IRS to determine whether or not you made a complete disclosure. And these processes are random, in many cases, and extremely tough so that everybody else lives in fear that they will be subject to audit and therefore will comply.

But the number of audits is going down. And the financing for audits is reducing, and the reason why seems to be glaringly obvious. The Republicans are trying to ensure that the Federal Government does not have the resources it needs to deliver the services that the people of the USA want.

I think we can be fairly sure that at some point the same thing will begin to happen here as well.

The point is, is that if they can't kill the beast, as they call it, by draining the swamp, as they describe it, what they will do instead is deny the beast the resources it needs to deliver the service that people require from it, and what that service needs is money. They aren't going to give the IRS the funds to collect the tax that will keep the US government functioning.

This is deliberate policy. It's not an accident. It can't be. It's done by design and the intention is to denude the US government of cash. Wait for it, it may well happen here, and when it does, we will see a crisis enveloping the government. And we will see increasing inequality, and both of these are the deliberate desires of those who are promoting this policy.

This is one of the most cynical attacks on the basis of democratic government that I can think of. It started with the offshore world, which always existed for this purpose. Now it's gone onshore, and it's very much taking place in Washington DC.

Expect it here soon. This is a very disturbing trend within the political agenda.


Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:

There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.

You can subscribe to this blog's daily email here.

And if you would like to support this blog you can, here:

  • Richard Murphy

    Read more about me

  • Support This Site

    If you like what I do please support me on Ko-fi using credit or debit card or PayPal

  • Archives

  • Categories

  • Taxing wealth report 2024

  • Newsletter signup

    Get a daily email of my blog posts.

    Please wait...

    Thank you for sign up!

  • Podcast

  • Follow me

    LinkedIn

    LinkedIn

    Mastodon

    @RichardJMurphy

    BlueSky

    @richardjmurphy.bsky.social