Taxation by moral blackmail? Huh?

[jacey]

Is it just me?

The BBC news this morning said the Jimmy Carr had agreed to cease using LEGAL tax avoidance schemes to reduce his tax bill because HM government is saying that to LEGALLY avoid paying tax is morally reprehensible.

But surely the law is the law. When I was on a business course many years ago it was the accepted theory that you use every legal trick in the book to avoid paying taxes because - well - they're LEGAL. The mantra was that 'tax avoidance is legal, tax evasion is not'. People pay accountants to find legal ways of reducing their tax bill.

I'm sorry, but if there's a tax loophole the government doesn't like, they should plug it - legally.

I know Jimmy Carr is probably pretty wealthy, and that those of us who are not sometimes really like the idea of a wealthy person being forced to part with money, but if the law applies to one person, it applies to all.

I want to know how the government has the right to name and shame people who are not actually breaking the law. When has the government agreed to set aside the law of the land in order to take a decision which was morally right?

I'd like to see the government looking at a low income family and saying: "Ah, Mr and Mrs Smith, I see that we took £2,556.78 from you in tax last year and that having paid this your five children had to wear shoes that were too small for them because you couldn't afford new ones. We agree that we had the law on our side, but we feel it was morally wrong to take this money from you, so we're giving it back."

Yeah, right!

Comments

[charlieallery.livejournal.com]

I have to say I'm with you on this one. Though I'm not sure it's the government doing the naming and shaming so much as the media - after all, he was part of a scheme that a lot of people were using, but he's probably the only name that people would recognise, so that's who the papers reported on. Reporting on people you've never heard of is a non-story.

And of course, somehow, because people have paid to be entertained by him, they seem to think that gives them a right to be outraged by what he's done with the money he's earned. It's not like he's a public servant whose wages come out of our taxes in the first place. I'm just wondering if anyone will dare to look at what the F1 drivers do with the money they're paid - though most of them are resident in Monaco or the Isle of Man and so have reduced tax bills.

As you say, part of paying for an accountant, rather than just hoarding receipts for yourself, is having them find legal ways to save you money. I do wonder if he could have sued for defamation, given that he hadn't broken the law. Oh dear, we really do hate people with money here, don't we? No wonder they all live elsewhere.

[birdsedge.livejournal.com]

It may be the media who stirred it all up but the comments from Con and Leb Dem politicians is pretty inflammatory:

David Cameron said in an interview with ITV News: "Some of these schemes we have seen are quite frankly morally wrong."

The Liberal Democrats' deputy leader, Simon Hughes, said it was "completely unacceptable" for stars to avoid paying proper rates of tax." (Note he didn't say it was wrong for others to avoid tax!)

In his Budget speech in March, Chancellor George Osborne described illegal tax evasion and legal but aggressive tax avoidance as "morally repugnant".

And for once a bit of common sense from Ed Miliband who said: "I'm not in favour of tax avoidance obviously, but I don't think it is for politicians to lecture people about morality. I think what the politicians need to do is - if the wrong thing is happening - change the law."

[jhetley.livejournal.com]

No, it's not just you. But governments like to be bullies. That's their business model . . .

[heleninwales.livejournal.com]

If the government is bullying anyone, it's bullying the low paid and people on benefits. But it isn't the government in this case, it's the media. I have to say that the scheme sounded dodgy to me, something to do with giving yourself a loan instead of paying yourself wages. But obviously I don't know full details and it ought to be a loophole that could be easily plugged by a change in the law. It would be easy enough to say that if the loan is never repaid (which presumably it isn't in these cases), then tax becomes due.

[caper-est.livejournal.com]

Yes, our dear rulers bully poor people as a matter of course. But there is always plenty of bullying left to go round! In particular, there is always plenty of bullying available for some random upstart who thinks he is getting big enough to try on the privileges of his masters.

Tax loopholes, like terribly exclusive little restaurants, lose all their charm when every brash bastard with a few bob to rub together starts to find out about them. This one will presently be closed as a national scandal, and another accidentally opened up in a less vulgarly notorious location.

[cmcmck.livejournal.com]

I wouldn't mind the moral outrage quite so much if I didn't know that Cameron and all his wealthy friends (not to mention all his friends in the media) will be pulling exactly the same dirty tricks to avoid paying their share by employing clever accountants.

It's called hypocrisy in the trade........................

[birdsedge.livejournal.com]

If the loopholes are there and it's legal to use them then the public has no right to be morally outraged - except at the govenment for creating the loopholes in the first place.

Jimmy Carr can keep his money for all I care. Let's face it, if he voluntarily pays more money than he needs to do it's hardly likely to reduce our tax bill, is it?

[charlieallery.livejournal.com]

Quite right, they'll just say oh, look, more money in the budget, what can we do with that?

[birdsedge.livejournal.com]

And then give themselves a bonus.

[cmcmck.livejournal.com]

It gets worse.

Apparently Gary Barlow of the band Take That has been up to the same thing- he's a mate of Cameron's and darling David has refused to condemn him.

Cameron is now being accused of croneyism (hardly novel for a Tory) and the political grandstanding will doubtless now commence.

Sigh :o/

[green-knight.livejournal.com]

The existence or non-existence of a legal code that allows people with lots of money to pay less tax than people on minimum wage is one issue - but the choice of people to use those tax loopholes and ask people on lower incomes to subsidize the public services they use is another, and I feel that people *do* have a right to be outraged about this - just because something is legal does not make it morally right.

And you can make a case for people who legally circumvent the tax system and reinvest the money into causes they feel are more relevant - a philantropical system - even though that has other problems, too - but at least those people are putting the money back into society _somehow_.

[birdsedge.livejournal.com]

I wrote a long response to this and then lost it when BB came in with a question and I hit the wrong button. Duh, but basically it was a rant to the effect that since the government deals with us on the basis of the law is the law, then why should anyone be surprised when individuals deal with the government on the same basis?

I abhor what has turned into a media witch hunt. I abhor the dual standards applied by Conservative and Lib-Dem politicians in fuelling that witch hunt.

I abhor David Cameron's application of double standards depending on whether the person in question is Carr (immoral, burn him!) or Barlow (It wouldn't be right for me to comment).

Charlie's right, we really do hate rich people in this country, don't we? Is it jealousy?

If we put morality above the law of the land then it would be nice to see it being applied in the opposite direction - from the government to the people.

[green-knight.livejournal.com]

I agree with all of your points re: singling out people (I don't see David Cameron condemning his father or offering to put a good chunk of his own money into public services) but just because the government is run by rich people who like to give other rich people tax breaks doesn't make it _right_ for rich people to pay less tax than poor people pay.

And I don't think this country 'hates rich people' - but many people get rich by exploiting others, and that is not something most people can - or should -feel comfortable about.

[cmcmck.livejournal.com]

This, absolutely and I feel I have a right to at least some moral outrage at such rank hypocrisy. I was born on a council prefab estate and my grandads were colliers- a job that killed them both comparatively young even though the pit didn't. I flunked school at 15 and got an education via a uni grant.

Would I get that opportunity today? I doubt it. Government is far too busy seeing to their own needs and those of their wealthy friends.

And people still wonder why I'm a Socialist.

[green-knight.livejournal.com]

In a system where a) everybody gets a share of the good things and b) it's possible through sheer hard work and a spot of luck to move up the ladder, rich people aren't a problem. But in a system where they use their power to exploit others - pay them a pittance, hire-and-fire-and oppress their workforce (I'm sure you've seen the Independent article about call centre workers who get assigned four minutes a day toilet breaks... and the people who *support* this system) - well, then there Is A Problem.

I found a letter from my grandmother's (rich) employer saying 'times are hard, everybody is struggling, I'm giving you a raise'. That completely knocked me for six because I cannot IMAGINE any rich person in today's economy to even consider this.

[birdsedge.livejournal.com]

Absolutely, cmcmck. I was incensed by the removal of student grants with virtually no warning (my daughter was the first year to miss out!) and the subsequent application of student fees. My children - now in their 30s - still have their student loans around their necks

[birdsedge.livejournal.com]

Green Knight, exploitation is not what I'm talking about. You aleady know my views on that, especially if you followed my Zulu posts of 2010.

What I'm talking about is putting people in the pillory who have not broken the law and letting our senior politicians selectively throw rotten tomatoes at the ones they do not count as personal friends.

[green-knight.livejournal.com]

The politicians should remain silent - that's very much a case of 'casting the first stone', and in any case, it's unprofessional for them to comment on individual cases. The tax-paying public, on the other hand, has a right to point out that it's not right for rich people to pay less taxes than poor people have to pay.

And as I said, just because an unjust law exist does not mean that keeping within that law is an ethical act. It's the politicians' duty to close those loopholes (much less for them to use them - cough, expenses and employing family members and getting paid for years' wage for a couple of hours work.

The only acceptable thing for a politician to say when it is pointed out that certain members of society elect not to pull their weight is 'we will try and fix this.' They're *very* quick when it comes to the little guys, but not so quick when it comes to their cronies.

[birdsedge.livejournal.com]

I find it difficult to differentiate the tax paying public's protest from a media witch hunt when this is expressed by vilifying an individual on the frint page of the broadsheet press. The public has been worked up to an indignant frenzy by the media and seems more incensed than when Ken Dodd was actually brought to trial for tax evasion - though later acquitted.

The figures don't matter. The law does. We'll have to agree to differ on that point, but it seems we agree on the unprofessionalism of the politicians who comment inappropriately.

[green-knight.livejournal.com]

I didn't see the media frenzy, so I don't know how bad it was. There's a line I'm not certain how to balance. On the one hand, I feel that public figures ought to be scrutinized more closely than ordinary citizens - hence when David 'rant against broken families' Cameron leaves his daughter at the pub, that's worth reporting, whereas if Jane and Joe Bloggs had misscheduled picking up theirs, it's not.

On the other hand, letting celebrity culture - whatever you report - drown out actual news (like the whole GCSE/O-level mess is a Very Bad Thing indeed, and focussing on one particular person instead of the thousands of possible targets is not fair on a purely personal basis.

[birdsedge.livejournal.com]

The BBC news on Radio4 this evening had as a postscript to a report on the Jimmy Carr affair a question that asked if politicians' tax returns should be made public. Oh no, was the (hasty) governmental reply. Some things should be kept private. You wouldn't want your tax return shoving through your neighbour's letterbox, would you?

Yeah, right!

[the-magician.livejournal.com]

I guess the point is that tax laws are very complex and it's possible to use something that was set up for a positive social purpose (say, deferring tax to help fund the UK film industry) as a way of laundering money and then retiring the funds overseas so that any profits made by the films that would have required taxation are now tax free ...

So the "morally reprehensible" tax avoidance is where someone uses a tax break not for the primary purpose, but just to avoid paying taxes.

So, for example: setting up a business for yourself, getting any pay paid to the company and only paying yourself a salary of £1/month ... but then closing the company down after six months and paying yourself £30,000 "redundancy" so that it comes in tax free ...
... that has probably been made illegal ... but you can see that the whole thing was set up not for a real purpose except to avoid tax.

The Gary Barlow situation may be a little different, it's hard to tell yet, as the money was paid into some sort of music related plan, and it may have an actual use rather than just being a tax-laundering operation.

[birdsedge.livejournal.com]

Yahbut, yeahbut... whether they are being used in the way initially intended they are still (currently) LEGAL. So the government should close these particular loopholes if they don't want anyone to use them. If the problem is a badly written piece of legislation then it needs fixing.

Maybe only the boys in the rich club (which obviously excludes Jimmy Carr and Gary Barlow) can use these loopholes with anonymity. Maybe the government doesn't want to close the loopholes because some of their financial supporters would be affected.

I dunno, it just all smells funny to me.

[birdsedge.livejournal.com]

It's no use blaming the horse for straying out if the open stable door. That's the nature of horses and it's no use trying to change that. But just because one horse has bolted doesn't mean you shouldn't close the bloody door to prevent the rest from getting out.