“The difference between tax avoidance and tax evasion is the thickness of a prison wall” – Denis Healey
We have a new war on benefit fraud, thanks to The Sun and David Cameron. What would we do without them?
Benefit fraud is, of course, A Bad Thing, but what I find most objectionable is the belief of many members of the public, fed by a constant pushing from government and the press, that the entire welfare budget is a massive slush fund paying out to every lazy, conniving shyster under the sun (or worse, it’s all being paid out to “teh assileum seekus!”). For a start, benefit fraud takes up 1% of the welfare budget. That’s right. 1 piddling, naffing per cent. True, that’s £5.2bn, which is quite a large sum of money if not put in context, but still. 1%. Not really worth the acres of hectoring column inches this war is going to provoke, is it?
I don’t mind people debating welfare, but the problem is that so much talk on it tends to be ill-informed prattle, usually revolving around the fact that all people on Job Seekers Allowance are lazy. To which the only sensible reply is to count to ten, make a cup of tea and quote Mark Steel at them:
What a curious economic century we must have had. The population must have gone through a period of laziness at the end of the 19th century, then felt a sudden spurt of energy and got jobs. Until the 1930s, when they got lazy again. Then they perked up around 1938, which was handy as it was just in time for the war. This was fine until 1980, when everyone changed their mind and decided to stay in bed all day, which makes sense as this coincides with the invention of the duvet.
Of course, the 15,000 people expected to lose their jobs at the Ministry of Justice are just lazy as well.
Instead, I get angry about tax avoidance, which costs the Treasury fifteen times more than benefit fraud. Quite why the richest in society feel the need to reduce their tax bill so that the burden for public services gets shouldered disproportionately more by the middle and lower-earning workers, I’m not quite sure. It’s probably something to do with their selfishness and greed. In fact, I agree with this raving communist. Who do you reckon said this:
The subjects of the country ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities
Well done economics buffs, that was – of course – Adam Smith. Bear that in mind next time you see a report from the Adam Smith Institute saying we should privatise oxygen, or get babies to work so that they can pay for their own child benefit payments.
Now, let’s talk about a random businessmen – Sir Philip Green, say. Here is a Nick Cohen column from 2006, before he had gone completely, utterly barmy:
in the spring, the BBC’s Money Programme calculated that Green and his family had ‘saved themselves’ £300m [actually £285m – Cory] from their £1.2bn salary by living for a part of the year in Monaco, whose residents don’t pay income tax.
Of course, one person’s tax break is another person’s tax burden. The £300m the Green family ‘saved themselves’ must be paid by people who earn considerably less than £1.2bn a year or £1.2m a year or even £120,000 a year.
Standing up for such paupers used to be the point of a Labour government. Even if it could not force the likes of Green to pay their fair share, it retained the power to shun them and make it clear that those who don’t contribute towards their country can’t expect their country to be grateful.
Even that modest defiance of the plutocrats is beyond Labour now. Yesterday, the Queen announced her birthday honours and high on her list was Green, who received a knighthood for ‘services to the retail industry’.
If I were in the Inland Revenue, I would fret about the moment when the little people who stupidly still pay taxes realise that the state is treating them like fools. It insists that they must hand over their earnings on pain of punishment by the courts, while inviting Philip Green to Buckingham Palace to be honoured by the Queen.
Richard Murphy makes a wonderful point here:
let’s put Green’s side of this. He said “no tax was avoided because none was due”. An interesting argument from a retailer but which means I hope in future he does not mention the word ‘save’ when promoting his regular sales because there will be no saving over the original price during such events since that original price is not due during the sale and, therefore the comparison cannot be made. Which just shows how disengenuous is his argument about tax saving because it is obviously contrary to current usage of English.
You will be pleased to know that our esteemed coalition are taking serious steps to stop Philip Green’s tax avoidance.
Sir Philip Green, the billionaire owner of high-street chains including Topshop and Dorothy Perkins, has been enlisted by the government to carry out an external review of its drive to cut public spending.
The entrepreneur’s audit of government spending will run alongside the coalition’s major review currently under way to start cutting the £155bn deficit.
Welcome to 21st century Britain, a country where if you cheat the system out of thousands of pounds, you’ll be called “freeloading scum”, but if you really screw the system and evade paying £285m worth of tax you’ll be heralded by governments and asked to run the country.