Skip to main content

Tax schmax

I'm always surprised how many otherwise intelligent people respond emotionally rather than logically to news stories about tax. We hear them moaning about celebrities' tax avoidance schemes, and boycotting Amazon and Starbucks because of their immoral attitude to taxation. Fair enough, but let's take a step back.

How many people write to HMRC saying 'Actually, it's immoral for me to just pay the 20p in the pound I am legally obliged to pay, could I pay 30p instead? That way we'd have a better NHS etc.'? Not a lot, I suspect. But when companies and individuals employ tax avoidance, all too often people say 'Why aren't they paying more? It's immoral? That's money that should be going to the NHS etc.' However, just like the 20p in the pound PAYE, all they are doing is paying the minimum the tax system requires them to pay. (Gary Barlow's scheme failed to do this legally, hence the problems he is having.)

Rather than whinging about the corporations and rich individuals that do this, we should be pressing for a root and branch modification of the tax laws. Firstly, they're ridiculously complex (including all that silliness over whether a Jaffa Cake is a cake or a biscuit) and secondly they have far too many loopholes. The simpler the system, the fewer the loopholes.

This would be relatively easy to do for the Gary Barlows of this world - the problem with doing it for Starbucks, Amazon etc. is that what the moral argument seems to require is that corporation tax on money earned must be paid to the tax authority of the country in which the purchaser lives. And although in principle we could do this unilaterally we are almost certainly not allowed to by the EU. So it would require an overhaul of EU law, not just UK law... and we all know how easy that is.

It also would get quite complicated to administer. For example, I have a UK-based company. I pay UK corporation tax on all my earnings, even if I'm selling something to, say, someone in America. But if this kind of rule was applied, I suppose I would pay less UK corporation tax, and also pay some tax in America. And every other country where my books etc. are sold. Which would get pretty messy.

Nevertheless the principle is clear. We might like to have corporate scapegoats like Starbucks and Amazon to boo and hiss at, but they will comply with whatever laws are available - we just have to make sure our tax laws make sense. It's the politicians we should be complaining about (just for a change), not the tax avoiders. When it comes down to it, we're all tax avoiders, it's just that for the majority who pay their tax by PAYE the avoidance is done for them automatically by the system.

Comments

Popular posts from this blog

Why I hate opera

If I'm honest, the title of this post is an exaggeration to make a point. I don't really hate opera. There are a couple of operas - notably Monteverdi's Incoranazione di Poppea and Purcell's Dido & Aeneas - that I quite like. But what I do find truly sickening is the reverence with which opera is treated, as if it were some particularly great art form. Nowhere was this more obvious than in ITV's recent gut-wrenchingly awful series Pop Star to Opera Star , where the likes of Alan Tichmarsh treated the real opera singers as if they were fragile pieces on Antiques Roadshow, and the music as if it were a gift of the gods. In my opinion - and I know not everyone agrees - opera is: Mediocre music Melodramatic plots Amateurishly hammy acting A forced and unpleasant singing style Ridiculously over-supported by public funds I won't even bother to go into any detail on the plots and the acting - this is just self-evident. But the other aspects need some ex

Is 5x3 the same as 3x5?

The Internet has gone mildly bonkers over a child in America who was marked down in a test because when asked to work out 5x3 by repeated addition he/she used 5+5+5 instead of 3+3+3+3+3. Those who support the teacher say that 5x3 means 'five lots of 3' where the complainants say that 'times' is commutative (reversible) so the distinction is meaningless as 5x3 and 3x5 are indistinguishable. It's certainly true that not all mathematical operations are commutative. I think we are all comfortable that 5-3 is not the same as 3-5.  However. This not true of multiplication (of numbers). And so if there is to be any distinction, it has to be in the use of English to interpret the 'x' sign. Unfortunately, even here there is no logical way of coming up with a definitive answer. I suspect most primary school teachers would expands 'times' as 'lots of' as mentioned above. So we get 5 x 3 as '5 lots of 3'. Unfortunately that only wor

Which idiot came up with percentage-based gradient signs

Rant warning: the contents of this post could sound like something produced by UKIP. I wish to make it clear that I do not in any way support or endorse that political party. In fact it gives me the creeps. Once upon a time, the signs for a steep hill on British roads displayed the gradient in a simple, easy-to-understand form. If the hill went up, say, one yard for every three yards forward it said '1 in 3'. Then some bureaucrat came along and decided that it would be a good idea to state the slope as a percentage. So now the sign for (say) a 1 in 10 slope says 10% (I think). That 'I think' is because the percentage-based slope is so unnatural. There are two ways we conventionally measure slopes. Either on X/Y coordiates (as in 1 in 4) or using degrees - say at a 15° angle. We don't measure them in percentages. It's easy to visualize a 1 in 3 slope, or a 30 degree angle. Much less obvious what a 33.333 recurring percent slope is. And what's a 100% slope