It is a quiet news day (other than dull news about the state of the UK economy improving, blah blah blah) so I’m going to take some snippets of stories that I’ve read, misrepresent their data and conclusions, and then use this to logically support the conclusions that I have drawn up prior to reading the article.
HM Revenue & Customs (HMRC) stepped up its crackdown on tax evasion on Tuesday, publishing its second list of “deliberate tax defaulters” on its website.
The list includes 15 names owing more than £25,000 in tax, including two pub landlords and a kebab shop owner.
Now I’m the last to deny that tax evasion is an issue. It is a £221tn issue in the UK according to my widely acclaimed “expectation gap” methodology.
But isn’t it odd that the multinational corporations we all now know, due to the well-reasoned arguments of individuals such as myself, cost the UK quadrillions in lost tax didn’t top the list?
Keep asking why that is, and then note that the board of HMRC is dominated by people from big business. This is not because HMRC is a large organisation and they require people with experience of managing large organisations. No. These people are obviously agents of The Private Sector sent to destroy HMRC from within.
The only alternative explanation is that none of the big businesses being discussed in the media are actually deliberate defaulters. Which is unthinkable.
I also note that Google, Amazon and Starbucks are not listed on any sex offender registers.
This table has just been published by the OECD and shows the “tax wedge” taken from employment earnings for all 34 OECD countries:
The OECD say of this:
Note then that this “wedge” includes employer’s national insurance – which most people do not appreciate is paid on their behalf. Because they are not tax experts and don’t realise that the tax burden is higher than they think. Which is besides the point, but I should point out that I noticed this because I am in fact a tax expert.
I’m not suggesting for a second that many of our taxes in this country are levied in stealthy ways in order to disguise the true level of taxation. Oh no.
The UK is at 32.3%, well down the list.
Of course, that may also be why we have such a high deficit: we are undertaxing high earnings in particular. That is the logical conclusion even though this table is based the tax raised from an average earner. I can draw this conclusion because it is the conclusion that I expected to draw before I read the article.
But there’s no case for saying we’re overtaxed, most especially at high rates. That’s for sure. So this table, even though it doesn’t claim to say anything about the overall tax rate on the entire population (it just shows the tax rate on an average earner), fails miserably to show that high earners will react to high tax.
It appears I have once again disproved the Laffer Curve.
The CBI issued a statement on its seven new tax principles last week. As with most things said by big business on tax these need unpacking to work out what they really mean. Here’s my interpretation. For most people, this would simply illustrate the prejudices of the person doing the interpreting, but because I am never wrong, you can take this as fact:
1. UK businesses should only engage in reasonable tax planning that is aligned with commercial and economic activity and does not lead to an abusive result.
Means: Don’t get caught by the 0.01% of tax planning covered by the General Anti-Abuse Rule and you’ll get away with almost anything. That’s the General Anti-Abuse Rule that I claimed had finished the argument that tax avoidance is legal. It didn’t, but I was completely correct at the time, and I still am.
2. UK businesses may respond to tax incentives and exemptions
Means: Play the system for all its worth and lobby for more concessions continually. This doesn’t mean that they should let themselves be incentivised by reliefs designed to encourage research and development, encourage employee share ownership, green investment and so on.
Yes, I know I say that one of the virtues of tax is to encourage people to do what we want, but we don’t want to encourage them to actually reduce their tax liability, just do the thing we want them to do. To think otherwise is neoliberal sophistry.
3. UK businesses should interpret the relevant tax laws in a reasonable way consistent with a relationship of “co-operative compliance” with HMRC.
Means: Sweetheart deals work, so keep up the sweet talk.
In reality, tax campaigners such as me want businesses to actively frustrate HMRC and cause them to waste their resources. Because HMRC should have limitless resources within a State of Courage and this would just increase employment. The fact we don’t have a State of Courage or limitless resources is besides the point.
4. In international matters, UK businesses should follow the terms of the UK’s Double Taxation Treaties and relevant OECD guidelines in dealing with such issues as transfer pricing and establishing taxable presence, and should engage constructively in international dialogue on the review of global tax rules and the need for any changes.
Means: Google, Amazon and Starbucks played by the intention of these rules. You just go ahead and do the same and in the meantime the CBI will spend a great deal lobbying against any change in the rules.
In a State of Courage, businesses would simply break the law to do whatever they considered moral at any given moment in time. That’s what I said that Barclays and HSBC should do and I stick by that. Even though it might appear to be incredibly unethical to suggest that businesses should actively seek to break the law.
5. UK businesses should be open and transparent with HMRC about their tax affairs and provide all relevant information that is necessary for HMRC to review possible tax risks.
Means: Stick to the existing rules and lobby like fury against country-by-country reporting which would create more sets of numbers with discrepancies in them, which would allow me to sell more books about tax avoidance still without having to actually do any proper research.
6. They should work collaboratively with HMRC to achieve early agreement on disputed issues and certainty on a real-time basis, wherever possible
Means: Keep working at those nice cosy relationships with HMRC.
Of course, a State of Courage would alienate these businesses and take every opportunity to ignore them. Until it was time to tell them what tax is due, of course.
7. Firm should seek to increase public understanding in the tax system in order to build public trust in that system, and, to that end:
They should consider how best to explain more fully to the public their economic contribution and taxes paid in the UK
This could include an explanation of their policy for tax management, and the governance process which applies to tax decisions, together with some details of the amount and type of taxes paid
To call these principles is absurd. I have shown in irrefutable logical fashion above that they’re actually an argument for keeping the status quo of multinational corporation tax abuse.
Wasn’t it St Augustine who said “God grant me chastity, but not yet”? I very strongly suspect that in similar style the CBI are asking for tax reform, but not yet. Well, I imagine they don’t want tax reform at all actually. So the quote is completely irrelevant.
But I do like to quote theological sources. It helps me appear to be a man of morals.