Correcting tax gaps

I must admit I have not the time or energy to make several posts about the tax gap and say why I think it is a load of rubbish.

I do, however, have the expertise to spot a pack of sophistry when I see it. Therefore I will try to summarise briefly why HMRC’s numbers are wrong.

Basically it boils down to the fact that HMRC only calculate the tax that is lost on the basis of what the law is as intended by Parliament. They deploy no metadoublethink whatsoever to look beyond that methodology to assume that The State has a moral obligation to collect as much tax as possible to turn evil private sector money into good public sector money.

So, any meaningful tax gap should be calculated on what the law should be.

This means that you have to ignore the democratically established laws and their actual wording and assume that the law is a perfect enactment of the Will of A Perfect State, a term I use to refer to The State that displays Perfect Courage and levies tax at the highest possible rate on wealth, income and genetic privilege.

You also need to ignore any behavioural shifts as a result of Perfect Courage. You also need to accept the moral ambiguity of taxing the shadow economy perfectly, ie taxing slave traders, drug smugglers and pimps. These individuals would revert to legitimate activity in A Perfect State. You can never ignore the effect of behavioural changes under A Perfect State.

This calculation is referred to as the Perfect Expectation Gap and is basically GDP.

However, people tend to find this number a bit scary. So rather than cite GDP, I produce something called the Imperfect Expectation Gap.

This means that I, being an example of a Citizen of Courage, choose which legal principles are retained in calculating the expectation gap, and which are discarded. Because I am the living embodiment of A State of Courage, I may make these decisions independently of democracy, but knowing that A Perfect Democracy would validate my decisions.

For you neoliberals who haven’t followed my impeccable logic, yes, that means that I am morally right so I can decide what the law ought to be in determining the tax gap.

You see that HMRC have mentioned none of these things, so they cannot possibly be correct.

Also, they have revised their estimates from previous years. Why? They are suggesting that in order to understand this year’s number you need a comparison from a previous year which is calculated on the same basis.

This suggests that HMRC are willing to change their numbers in order to reflect changes in methodologies which may be more accurate, but more misleading because they are measuring the wrong thing in the first place!

Oh dear, what a mess. I will have another look later but it is so obviously wrong I probably won’t even bother producing my own figures using my methods from previous years.

This would just embarrass HMRC. And probably me a little bit.

Even a tax expert such as myself wearies from being right all of the time.


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