One of the\u00a0perpetual\u00a0obsessions of the right wing of politics is law and order. It is they argue the fundamental duty of the state to defend the citizen, and even more\u00a0importantly, their\u00a0property\u00a0from all assaults from\u00a0criminal\u00a0wrong-doers. And I have to say I see a lot of good reason for thinking that true.<\/p>\n
But they drop that demand when it comes to tax. On Friday I published research with the\u00a0Tax Justice Network<\/a> and the Tackling Tax Havens web site detailing tax evasion in 145\u00a0countries,\u00a0including\u00a0the UK. The UK, I suggested, loses \u00a369.9bn a year as a result. I never once suggested it could recover all that: clearly it could not. No tax system is fool proof against crime. But it is very obvious we could do a great deal more - and I suggested that stopping sacking tax inspectors was the first and obvious step in the process.<\/p>\n What has the reaction been? Tim Worstall, that\u00a0perennial\u00a0spokesperson\u00a0for all that is bizarre in right wing thinking, has given one response. He has said<\/a> , quoting my paper:<\/p>\n we can see that the average tax as percentage of GDP in European countries is 38.9%. Let us imagine that the sensitivity of currently untaxed activities to taxation is 40%. So, we go off and collect, on the next \u00a310 billion of economic activity, our 38.9%. We get \u00a33.89 billion in tax revenue.<\/p>\n Well, actually, no we don\u2019t. For by taxing it we\u2019ve reduced that economic activity by 40%. So, when taxed, there\u2019s only \u00a36 billion in activity. We actually get \u00a32.33 billion in revenue. But economic activity has fallen by \u00a34 billion.<\/p>\n We\u2019re poorer overall.<\/p>\n We\u2019d be better off just not worrying about what those criminal bastards, the tax dodgers, are doing over there in the last 10-15% of the economy. We\u2019re made richer by ignoring it.<\/p><\/blockquote>\n Let's be explicit about what he's saying here: he's\u00a0explicitly\u00a0condoning\u00a0crime. He's saying we should simply allow it. He says we're better off for this criminal conduct.<\/p>\n It's an astonishing argument. It's like\u00a0arguing\u00a0we\u00a0would be better off if looting were allowed - which would certainly increase the\u00a0consumption\u00a0of some. Because let's be clear - that's what tax evasion is akin to. It's looting. It's looting from those who are honest and pay to support those who act criminally and will not pay.<\/p>\n And what would happen if Worstall was right? Well, of course, the tax system would fail,\u00a0rapidly, as it\u00a0already\u00a0is when it comes to small businesses, where as I have shown well over half of all small companies already fail to submit tax returns each year<\/a>. So we'd rapidly descend to the point where Greece is. Where the welfare state would fail (as no doubt Worstall wants), where criminality was normal, where trust failed as everyone was fiddling and honesty was but a memory, and where business itself also collapses becasue in that environemnt the incentive to invest, produce or even work fails. You might just as well be criminal. That seems to be what Worstall wants.<\/p>\n