Some neoliberal idiot has been spouting off about tax avoidance again, saying that it’s something to do with judgement.
Well, he’s right. But only by virtue of being completely and utterly wrong on every count.
Tax is a matter of judgement. The judgement of The State, that is.
Morality is really what tax is all about. And The State is the arbiter of moral principles.
The State has decreed that the most moral way of determining corporation tax liabilities for multi national groups occurs thus:
Firstly the company must conduct transfer pricing calculations to see what payments a group company must legally make. This is NOT what is morally due. The legal amount is there to tempt wicked companies to show themselves to be wicked.
Secondly, the employees of the company must decide how much more tax to pay than the legal amount to appease The State.
Thirdly, The State will decide whether it is appeased or not. If it is, it will take no further action. If it is not, it will send round a group of virtuous tax campaigners to scare the wicked multinational out of town.
Margaret Hodge understood this when she called for a boycott of evil Starbucks. She was taking a lead from the great American Socialist, Alphonse Capone.
This is a Courageous response by her.
Starbucks had paid exactly what was intended by the law which is completely morally repugnant and obscene behaviour. They were practically asking to be punished.
So, even when they offered up the amount they should have in the first place, they needed to be made an example.
Nobody insults the UK like that, making The State beg for the money that It is not legally entitled to. It expects multinationals to pay it without It having to ask for it.
Starbucks insulted The State and made it look foolish in front of all the other states.
But The State has made its point now, so next time there won’t be similar misunderstandings.
So, you see, although tax is a matter of judgement, it is simply a judgement of how much you want to risk upsetting The State.
Do what’s right, or we’ll send UK Uncut round. Capiche?