{"id":21296,"date":"2013-06-21T14:28:22","date_gmt":"2013-06-21T13:28:22","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=21296"},"modified":"2013-06-21T14:28:22","modified_gmt":"2013-06-21T13:28:22","slug":"the-tax-professions-cure-for-corporation-tax-abuse-is-abolish-the-tax","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2013\/06\/21\/the-tax-professions-cure-for-corporation-tax-abuse-is-abolish-the-tax\/","title":{"rendered":"The tax profession&#8217;s cure for corporation tax abuse is abolish the tax"},"content":{"rendered":"<p>Taxation magazine has done little to cover itself in glory during recent tax debates, most notably when its editor, Mike Truman, wrote an article branding\u00a0Margaret\u00a0Hodge '<a href=\"http:\/\/www.taxation.co.uk\/taxation\/Articles\/2013\/02\/06\/53361\/tax-prat-year\" target=\"_blank\">Tax Prat of the Year<\/a>'.<\/p>\n<p>Now Truman <a href=\"http:\/\/www.taxation.co.uk\/taxation\/Articles\/2013\/06\/19\/309351\/modest-proposal\" target=\"_blank\">has published an article<\/a> by a 'partner in tax practice' using the\u00a0pseudonym\u00a0'Samuel Johnson' under the title 'A modest proposal' and subtitled 'A radical new approach to address high-profile tax avoidance'. Unfortunately the whole article, which could be by Truman for all we know, is not\u00a0available in full on line but I have read it all. The summary of key points reads like this:<\/p>\n<ul>\n<li>Google says it pays taxes legally due.<\/li>\n<li>Radical alternatives to test this commitment.<\/li>\n<li>Abolish corporation tax for some or all companies.<\/li>\n<li>Recover the lost tax by increasing VAT or NIC, possibly selectively.<\/li>\n<\/ul>\n<p>So let's look at this Truman endorsed view. What it says is that it will be impossible to create a tax system in the UK\u00a0that will ensure large companies pay at the same rate as their smaller, nationally based competitors. This, of course is untrue. We could have a differential in the tax rate for large business so it pays at a\u00a0nominal\u00a0rate at least 10% more than small business, as we did for decades. That\u00a0might\u00a0work. So too would unitary\u00a0taxation\u00a0work. But the author ignores these obvious points, making assertion instead.<\/p>\n<p>He then offers his own solutions. The first is to abolish corporation tax altogether, but realises that this may be hard to stomach. So he then offers an alternative, which is just to abolish it for large companies. Oddly, he suggests a unitary formula basis for deciding which companies are large for this purpose. His claim is that the resulting gap would be\u00a0derisory\u00a0(which is not true: <a href=\"http:\/\/www.hmrc.gov.uk\/statistics\/ct-receipts\/corporation-tax-statistics.pdf\" target=\"_blank\">the most basic of research would prove that<\/a>). But he has a solution, which is to increase VAT by a few percentage points or add to employer's national insurance.<\/p>\n<p>Now this could all be tongue in cheek, but I really do not think so: the slightly flippant style of the article really does cover serious intent - and given that it is anonymised one\u00a0that\u00a0we can only\u00a0presume\u00a0Taxation endorses so it\u00a0cannot\u00a0attribute the\u00a0views\u00a0to anyone else. All of which means that Truman is now publishing the view that tax avoidance by big business is solved by abolishing their tax obligations\u00a0which\u00a0are then shifted onto ordinary people through regressive\u00a0consumption\u00a0taxes and by\u00a0increasing\u00a0taxes that will reduce real wage rates.<\/p>\n<p>I think we learn rather a lot about Truman, his organisation and the tax profession as a result,\u00a0including\u00a0its happiness with opacity given the anonymity it affords to the\u00a0author\u00a0of\u00a0this\u00a0piece. \u00a0No wonder Truman doesn't like the Fair Tax Mark with its focus on paying tax, \u00a0tax\u00a0justice, opposing tax havens and their low tax regimes and\u00a0transparency. It would appear he's happy to promote the polar opposite<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Taxation magazine has done little to cover itself in glory during recent tax debates, most notably when its editor, Mike Truman, wrote an article branding\u00a0Margaret\u00a0Hodge<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2013\/06\/21\/the-tax-professions-cure-for-corporation-tax-abuse-is-abolish-the-tax\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67,26,16,10],"tags":[],"class_list":["post-21296","post","type-post","status-publish","format-standard","hentry","category-accountancy","category-accounting","category-ethics","category-tax-avoidance"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/21296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=21296"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/21296\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=21296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=21296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=21296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}