Topic: The Tax avoidance thread. Why should Jimmy Carr apologise?

[muyuu]

Until they are reviled by the people paying their wages, then they might just think twice about it.  The key here is for the general populace to make it clear that it is morally unacceptable.  Then we no longer need to wait for the government to close loopholes they are probably exploiting themselves we just need a few investigative journalists to expose the schemes and those in them.

The responsibility lies entirely on legislators and law enforcement. People cannot be subject to a witch-hunt for using legal means to pay as little tax as they can. It's not a voluntary charity scheme, it's a legal obligation. No more and no less.

[stevedo]

The responsibility lies entirely on legislators and law enforcement. People cannot be subject to a witch-hunt for using legal means to pay as little tax as they can. It's not a voluntary charity scheme, it's a legal obligation. No more and no less.

Of course people can question the morality of a decision taken, be it currently legal or not. Apartheid?

As Spike said, Do The Right Thing.

[pantbash]

The places I mentioned before are already full of such people, and the higher the burden the more people join them.
They don't vacate their job. They continue doing it from abroad and this income simply goes elsewhere.

Then stop that income flowing out. Sanction the tax havens if you have to.

One has to be rational about these matters not emotional. Just because you want to say "go away, I don't love you any more" that doesn't help the lesser medical attention you can afford, the worse social services, pensions and so on. There are real, tough compromises to be made. Not saying it cannot be done better, just pointing out that it cannot be taken to an extreme simply based on one's particular sense of morality, when there are objective things at stake.

Suggesting a little more equality in society is now dismissed as emotional handwringing?
All I want from the current tax system is for the richer not to have an advantage over the general populace when it come to the proportion of their income going to the state. That is not an extreme request.

[Millie]

I, for one, have no problem paying due taxes but there are a number of things that get up my nose e.g.

1. as I understand it, anyone visiting the UK gets free healthcare which has resulted in some people actually planning their holidays to 'go sick' and receive expensive healthcare, paid for the UK tax paying public.  If this is true, it outrageous primarily because it would be so simple to stop e.g. you must be an UK resident before you receive free healthcare. If not, get some travel insurance!

2.  I also understand that we've been giving loans to overseas students, some of whom, having received their education, have gone home and not paid back the loan. Again, may be an urban myth but, if its true, well, I'm gobsmacked.

Please tell me I'm wrong, as I'd feel a whole lot better about paying 81% tax (61% direct + 20% indirect on anything I buy)! 

Regarding the NHS  - the following is off the official NHS website

Treatment which is always free of charge

Some hospital treatment is free of charge for everyone who needs it, regardless of how long they have been or intend to stay in the UK. This is:-

treatment for accidents and emergencies as an outpatient in a hospital’s accident and emergency department. Emergency treatment in a walk-in centre is also free of charge (England and Wales only). However, if you are referred to an outpatient clinic or admitted to hospital from an accident and emergency department, you will be charged
compulsory psychiatric treatment
In England and Scotland, compulsory treatment under a court order
treatment for certain communicable diseases, such as tuberculosis, cholera, food poisoning, malaria, meningitis and pandemic influenza. Testing for the HIV virus and counselling following a test are both free of charge, but any necessary subsequent treatment and medicines may have to be paid for
family planning services

So people can't just come over here and receive expensive treatment on a whim

[Veinticinco de Mayo]

The responsibility lies entirely on legislators and law enforcement. People cannot be subject to a witch-hunt for using legal means to pay as little tax as they can. It's not a voluntary charity scheme, it's a legal obligation. No more and no less.

Of course they can be subject to public pressure

As consumers we have a right to expect the companies to whom we give our custom to behave in an ethical manner.  If they do not then we can boycott them and campaign for others to do likewise.  It has forced changes in corporate policy on many other things such as child labour, the environment, sustainable fishing, animal welfare etc.  There is absolutely no reason why similar moral pressure cannot be brought to bear on taxation and persuading companies that it is right for them to contribute to the societies in which they operate and on which they depend for their profits and shareholder returns.

Similarly celebrities and those in the public eye are well aware that slips in judgement can be hugely detrimental to their careers. As Jimmy Carr has discovered that may include their hypocrisy on tax avoidance. 

[Veinticinco de Mayo]

Of course people can question the morality of a decision taken, be it currently legal or not. Apartheid?

As Spike said, Do The Right Thing.

Another excellent example.  How many student accounts did Barclays lose in to my generation of undergrads?

[muyuu]

The responsibility lies entirely on legislators and law enforcement. People cannot be subject to a witch-hunt for using legal means to pay as little tax as they can. It's not a voluntary charity scheme, it's a legal obligation. No more and no less.

Of course people can question the morality of a decision taken, be it currently legal or not. Apartheid?

As Spike said, Do The Right Thing.

You confused me with that reply. Surely the responsibility for apartheid was on legislators and not on people living under it?

[RojoLeón]

http://harryshearer.com/article/?auid=jyC4W45985z9r6H

This is a transcript of an interview (interviewed by Homer Simpson!) that highlights some of the less savoury reasons behind off shore tax havens. Maybe they need a rethink..

HARRY SHEARER INTERVIEWS DAVID CAY JOHNSTON

HARRY SHEARER:  This is Le Show, and it's not tax season, but on the other hand it's always tax season, and I can imagine that that has several people reaching for their dials. But don't do that. A gentleman who has been making taxes and the games played with them comprehensible to mortals like me for many years, going back to his days as the tax writer – he didn't write the tax law, he wrote about it for the New York Times – is now unveiled as a columnist for Reuters, and I wanted to catch up with him because he's an expert on something that's been catching my eye more and more. David Cay Johnston, welcome to Le Show.                                                                                             

DAVID CAY JOHNSTON:  Well, thank you for having me on.

HARRY SHEARER:  My pleasure. And the subject that I wanted to tackle with you, and it's complex but you're good at making the complex comprehensible, is this whole idea of offshoring, which you've written about. Can you explain in less than half an hour what offshoring is?

DAVID CAY JOHNSTON:  It's actually quite simple conceptually. What you do, if you're a business, is you take your expenses here in the United States and then you arrange to collect your profits in a place like the Cayman Islands, Panama, Bermuda, where you will not be taxed on them.

A simple example of that is the Viagra tablet. They sell for about $18 each now, and there's a huge profit in that.

Well, when the researchers at Pfizer were working on what became Viagra, it was intended to be a heart drug, a cardiovascular drug, and some of the male researchers noticed an unusual property. The Pfizer corporation immediately packaged up the information it had at the time, which wasn't worth very much because it was still experimental, and Pfizer America sold it to Pfizer Switzerland, which in turn licensed it to Pfizer Lichtenstein, and every time somebody buys one of these $18 tablets now, the cost of manufacturing them is a tax deduction in the United States and the royalty paid on it for the ownership of the intellectual property is tax-free, collected by Pfizer in its Lichtenstein pocket.

The result is, they pay very little tax, they build up all this money offshore, and you and I have a heavier tax burden.

HARRY SHEARER:  I've grasped that sort of basic scenario. But then does that money forever live in Lichtenstein?

DAVID CAY JOHNSTON:  Well, seven years ago Congress passed something called the American Jobs Creation Act.

HARRY SHEARER:  Well what could be wrong with that?

DAVID CAY JOHNSTON:  Right. With a name like that, how could you not be in favor of it, right? And right now there is a proposed new American Jobs Creation Act. And it said, if you have offshore profits, you may repatriate them to the United States and instead of paying the 35% corporate tax, you only have to pay 5¼%.

The biggest beneficiary of this law back then was Pfizer. And Pfizer saved 11 billion dollars in taxes.

And what happened the day after they repatriated this money for very little tax? They started firing people. And they kept firing people until they fired 40,000 people. I'm not sure that they're through firing people at Pfizer. Now, not all companies did this, but they got 1/3 of the benefits and it was clearly an American jobs destruction program.

So the new bill, like the old one, actually doesn't require you to create jobs, despite its title. You can do all sorts of things with the money. You can use it to finance buybacks of your company stock. And executives, of course, like that because if there's less stock out there and the company is buying it, it tends to push up the price of the stock, and that means their stock options are worth more money – all thanks to the generosity of you and I as taxpayers.

HARRY SHEARER:  Now, about a year ago there was a piece I think in the Washington Post that went into some detail on this, and I gather this is related to what we're talking about. The Double Irish with a Dutch Sandwich?

DAVID CAY JOHNSTON:  (laughs) Harry, there's an enormous number of devices out there. I wrote about ones many years ago. Peter Whoriskey at the Washington Post wrote about some of these. But there's a couple of simple basic concepts. You take advantage of tax treaties.

So, I'll give you one example:  An American corporation – I hope I can remember the name of it, that I wrote about years ago – legally moved its headquarters to Bermuda. All they did was rent a mailbox in Bermuda and they pay the Bermuda government $26,000 a year for the privilege of on paper being a Bermuda company. Nobody works there. They have a mailbox. And they pay some local lawyers very nicely. In order to get money to Bermuda, they take advantage of a tax treaty in Barbados, another British island down in the Caribbean. And lo and behold, to take advantage of that tax treaty, once a year the directors of the company must fly to Barbados and hold a meeting.

HARRY SHEARER:  Oh the poor things!

DAVID CAY JOHNSTON:  And as we all know, that's one of the worst possible places in the world to want to go, say, in the middle of January when your company's headquartered in the Northeast.

HARRY SHEARER:  Yeah.

DAVID CAY JOHNSTON:  And they pay effectively a 1% tax on their profits.

HARRY SHEARER:  Wow. But now this Double Irish with a Dutch Sandwich – Google and a lot of companies who are heavy with intellectual property were domiciling their IP property in Ireland? And then somehow moving it – paying an affiliate in the Netherlands and then went back to Ireland and then ended up in one of the Caribbean islands – was that sort of – ?

DAVID CAY JOHNSTON:  Correct. And the Dutch and Dutch banks and German banks like Deutschebank and Swiss banks are all very big players in this.

Harry, here's the fundamental difference between now and when you and I were little children, in terms of taxing businesses. When you and I were born, America was a country of big manufacturing enterprises. There were automobile factories and television factories, and in Southern California where you and I grew up big huge agricultural organizations that had oranges and whatnot.

HARRY SHEARER:  And aerospace factories.

DAVID CAY JOHNSTON:  Oh yes, aerospace. LA was forever and maybe still is the real center of the American war business. And when a company has a big factory, you can tax that company. It can't get up and move. That's when we made things like that.

But today in America what we principally manufacture are numbers. That's what a software is. It's an algorithm. It's a series of numbers. CDs. All sorts of things are numbers.

The other thing we manufacture are molecules. That's what the drugs we get are.

Well, the ownership of those things, and in the case of the numbers, the representation of them, you can move outside of the U.S. with a push of a button.

And so our tax system still operates as if we lived in a national industrial wage economy, when we now live in a global digital services world. And we need to have a fundamental reform of our tax system.

HARRY SHEARER:  You mean like the kinds of meetings that we've been watching in recent weeks between Democrats and Republicans to craft a fundamental reform of our tax system?

DAVID CAY JOHNSTON:  First of all, there's no way to fundamentally reform the tax system the way they're doing that. It's an enormous project that will take a number of years to work out. That's a game of chicken.

HARRY SHEARER:  Well, chickens got to eat too. We'll be back with more of our interview with David Cay Johnston moments from now, here on Le Show.

* * * *

HARRY SHEARER:  Now let's return to our conversation with tax expert David Cay Johnston.

Let's get back to offshoring. If the repatriation bills didn't pass – and I'm not enough of a naïf to think they won't pass this time, as they did last time – but if the companies can't repatriate their profits from, you know, poor old Bermuda or Cayman Islands, are they able to assert operational use of the money, even though it's never been repatriated in the United States?

DAVID CAY JOHNSTON:  It's a little complicated. If you have 100 billion dollars in your offshore account, you can't go to your bankers in America and say, "Loan us $100 billion here and we'll pledge that as collateral." That's what you do when you buy your house, right? Let me live in this house and I'll pledge the house as collateral through a mortgage.

But, when you go to your banker and you say, "Look, we need to borrow some money, and by the way, you know perfectly well we have 100 billion dollars sitting over there in this tax haven, and we need to borrow 50 billion dollars to do X or Y, you can get the loan on pretty good terms. So they certainly have access to this money.

HARRY SHEARER:  Well, let me just pursue that for a second. If it's so simple to just rent a mailbox and have a subsidiary in Bermuda if you had the telephone number or the e-mail address of a Bermudan lawyer, why couldn't, you know, Jim's Drug Store do that?

DAVID CAY JOHNSTON:  Well, because in order to do that you've got to have, first of all, enough scale to afford the costs of it. Many of the tax shelter devices that I've exposed over the years, and they literally have totaled many hundreds of billions of dollars on a 10-year basis – in theory you and I could go do, but to do it you really have to have a huge amount of money. I mean, some of them come with, for example, a million-dollar up-front fee just for an opinion letter from a lawyer that will keep you from going to prison if the government finds out about it.

HARRY SHEARER:  That's an expensive Get Out of Jail Free card, in other words.

DAVID CAY JOHNSTON:  Exactly.

HARRY SHEARER:  So the table stakes are high is what you're saying.

DAVID CAY JOHNSTON:  Absolutely. This is not the $2 table at Binion's in Vegas. This is the $5,000 or $50,000 private room at Wynn.

HARRY SHEARER:  Yeah, this is the baccarat table upstairs at Wynn.

DAVID CAY JOHNSTON:  Yes.

HARRY SHEARER:  So do companies get any other benefits from this offshore apparatus that extends around the world, other than tax benefits? Is it just basically done for tax dodging?

DAVID CAY JOHNSTON:  It is basically a tax benefit. And the real problem these companies face, Harry, is this:  They can't use that money to buy back their stock. And that's what they want to do.

One of the big stories in America that's very important to understand about why your investments are what they are and what's happening to wealth and income is that many, many companies are using most of their profits to buy back their stock, and then they issue to executives an amount of stock equal to what they bought back, and it's a way to pump up executive pay, and it damages all the rest of the investors over a long period of time.

In the case of Pfizer, where they spent their tax savings and their repatriated money almost exclusively to buy back their stock, it didn't work. The price of Pfizer has continued to fall, and I think now it's about half what it was when that Jobs Creation Act, that I call the Jobs Destruction Act, was passed seven years ago.

HARRY SHEARER:  You're saying Pfizer needs Viagra for its stock price?

DAVID CAY JOHNSTON:  It's exactly – ! That's very good, I wish I'd thought of that, Harry. That's why you're a comedian and I'm an investigative reporter. They need Viagra for their stock.

HARRY SHEARER:  But do they get any kind of regulatory benefit from offshoring?

DAVID CAY JOHNSTON:  Not really. I mean, one of the challenges I think we face is that corporations in the modern world have become so incredibly complex. What you see as the New York Times or CBS or General Motors – a company with that brand name – in fact internally is hundreds and in some cases thousands of separate little companies. Every corporate jet is its own corporation.

HARRY SHEARER:  (laughs) With its own board of directors?

DAVID CAY JOHNSTON:  That's – (laughs) well, technically yes.

HARRY SHEARER:  Yeah.

DAVID CAY JOHNSTON:  That they're internal executives, and...

So these structures, which are all designed to limit liability and limit taxes and are a full employment program for corporate lawyers – regulators really, I believe, you can't expect government-grade regulators to truly understand these things. And the IRS actually admitted, I don't know, in response to some story I wrote when I was at the New York Times, that Enron was so complicated, just that company, Enron, that they really didn't understand what was going on inside Enron.

HARRY SHEARER:  Well that's the same thing we heard during the financial crisis, that regulators just couldn't keep up with the complexity of derivatives and of CDOs and CDSs and the pyramid of debt that was being built. Isn't that sort of – ?

DAVID CAY JOHNSTON:  Exactly. And the few people who did get it, like Brooksley Born, of course, were immediately slapped down by politicians and told, you know, "Stay out of this, this isn't your business." When in fact that's exactly the point of regulation.

HARRY SHEARER:  Yeah. So it is a jobs creation act for corporate lawyers?

DAVID CAY JOHNSTON:  Oh, yes. In fact, all of the tax law changes we're making, for the last 30 years we've had this incredible growing remake of the tax code. Every year you may only hear about a few stories in the news – there are thousands of changes being made in the tax law, often to benefit one individual or handful or a small industry or to gain an advantage for one industry against another, and many of them, they don't have a label on them. If you read the thing you would never know what it means unless somebody tips somebody like me off to what it is and shows you how to walk through it. And so that's why we have this just terrible, indefensible mess of a tax code.

HARRY SHEARER:  And whom did you anger when you were in school that you inherited the job of reading all this stuff and trying to figure it out?

DAVID CAY JOHNSTON:  (laughs) I actually asked for this, Harry. I was, you know, 30 years ago I was the guy at the LA Times who remade the reputation of the LAPD and revealed the worldwide spying they were doing and the brutality and the failure to solve a lot of crimes, but I started to become interested in wealthy people and taxes because of two scandals in California.

One of them was the Hiltons. Conrad Hilton left his fortune to the starving children of the earth, and I exposed how his son Barron arranged to divert the money to himself, and he ultimately got about 2/3 of it.

And then the Keck brothers, as in the Keck telescope, made this deal with then candidate for governor Deukmejian, who was attorney general and who was supposed to be the guardian of charitable trusts, to get a million dollars a year in what I called anti-pauper insurance, anti-poverty insurance, from their father's charitable fund.

And that's when my eyes sort of opened up to, you know, there's more to this tax system than what I've been hearing.

HARRY SHEARER:  Than – more to taxes than form 1040.

DAVID CAY JOHNSTON:  And, and – yeah. And what comes out of your paycheck. And I began to realize that, you know, there are people who are getting rich off this, and what is it? It's taken me 20 years, and I assure you there's no small number of detractors out there who will tell you I have no idea what I'm doing.

HARRY SHEARER:  But you do have a Pulitzer Prize to show for it, right?

DAVID CAY JOHNSTON:  I do, and I also have an unusual distinction. I am not a lawyer. In fact, I'm not a college graduate, though I have a college education including graduate school, but I am a professor of law and a professor of graduate accounting at Syracuse University.

HARRY SHEARER:  Wow. Without ever having graduated from college.

DAVID CAY JOHNSTON:  Yeah. I have a college education –

HARRY SHEARER:  Yeah, I understand.

DAVID CAY JOHNSTON:  – I went to the University of Chicago graduate school but never got a diploma because I never stayed in one college long enough.

HARRY SHEARER:  You and Sarah Palin!

DAVID CAY JOHNSTON:  Yep. Not somebody I particularly identify with, I'm sorry.

HARRY SHEARER:  You're not usually lumped in with her, but there you go.

David, anything more we need to know about this, this offshoring, that I haven't been smart enough to ask you about, in terms of how it works or whom it benefits and whom it hurts?

DAVID CAY JOHNSTON:  Well, here's the other thing I think people should think about, about offshoring. The techniques that are used by wealthy Americans and large corporations offshore are the very same techniques that not nice people who want to blow people up and kill people and undertake revolutions, and people who are in the drug business, as with the incredible explosion, epidemic of murder and violence we're seeing right across the border in Mexico – they use the same techniques.

So we should be thinking about international flows of money in terms not just of tax and tax avoidance and tax evasion, but in terms of stability, in terms of avoiding war and death and conflict, and having a regulatory regime that serves the interests of stability, democracy, and the liberties of the people.

HARRY SHEARER:  Thank you so much. I've read you for years and you've done the impossible, which is make me understand this stuff, and I wanted to share that gift with the audience today and it's really a treat to talk to you.

DAVID CAY JOHNSTON:  Well, thank you, Harry, very much for having me on.

HARRY SHEARER:  Appreciate it.

[stevedo]

You confused me with that reply. Surely the responsibility for apartheid was on legislators and not on people living under it?

As VdM alluded to, companies that wrung their hands whilst making plenty of cash from South Africa at that time suddenly found that saying It's The Law didn't cut it with their customers.

[muyuu]

As VdM alluded to, companies that wrung their hands whilst making plenty of cash from South Africa at that time suddenly found that saying It's The Law didn't cut it with their customers.

Oh. OK.

Still, I can agree that the apartheid was a criminal regime, but I cannot see how using legal means to pay "only" 1.4 million in personal income tax alone, can be Universally considered a crime, or even morally wrong.

[Jagged Princess]

No. You pay the tax you're legally required to, Jimmy Carr was paying the tax he was legally required to.

Sorry Dava, this is the first opportunity I’ve had to respond, so here goes ….

Jimmy Carr as you quite rightly pointed out did pay the tax he was legally obliged to but only in so far as using an off-shore account.  Had he been taxed on the same basis as the rest of us mere mortals, he’d have paid a considerably higher percentage.
 

I think using 'morals' as a basis of law is a very, very silly idea.

Morals can and do have an effect in Law, one example off the top of my head, the hated Poll Tax, we all know the outcome of that. 

[BIGdavalad]

Jimmy Carr as you quite rightly pointed out did pay the tax he was legally obliged to but only in so far as using an off-shore account.  Had he been taxed on the same basis as the rest of us mere mortals, he’d have paid a considerably higher percentage.

He was taxed on the same basis as us mere mortals. He didn't take advantage of some strange laws that only rich people get to use - there's nothing stopping anyone from doing the same things if they can afford to pay an accountant to organise them for them.

Have you ever bought anything in the duty free when you're on holiday? Been on a booze cruise? Bought anything off Amazon?

Morals can and do have an effect in Law, one example off the top of my head, the hated Poll Tax, we all know the outcome of that. 

That was nothing to do with morals and everything to do with the fact that it was pretty much unenforceable.

[Veinticinco de Mayo]

Oh. OK.

Still, I can agree that the apartheid was a criminal regime, but I cannot see how using legal means to pay "only" 1.4 million in personal income tax alone, can be Universally considered a crime, or even morally wrong.

Morality is human, and thus ever changing.  If we decide that aggressive tax evasion is unethical then it becomes so.  You've just made the point yourself by calling apartheid a criminal regime. It clearly was not, it was the legitimate legal regime in South Africa.  Yet gradually the rest of the world came to see it is as immoral and criminal. 

I am suggesting that the same thing needs to happen, and is happening with aggressive tax avoidance and that as with South Africa we do not need to rely on the politicians. This is a change that we can bring about ourselves through public pressure (or a series of witchhunts as I am sure you would characterise it).

Your time is up and we are coming to get you.

[Veinticinco de Mayo]

He was taxed on the same basis as us mere mortals. He didn't take advantage of some strange laws that only rich people get to use - there's nothing stopping anyone from doing the same things if they can afford to pay an accountant to organise them for them.

Have you ever bought anything in the duty free when you're on holiday? Been on a booze cruise? Bought anything off Amazon?

That was nothing to do with morals and everything to do with the fact that it was pretty much unenforceable.

That's rubbish Dava.  There is no way if you are an average Joe on PAYE that you can use the loopholes that Carr used.  Your tax is deducted at source.  In fact you inadvertently defeated your own argument "He didn't take advantage of some strange laws that only rich people get to use"  because they can do the same thing "if they can afford to pay an accountant to organise them for them". Did you even read that back to yourself?

[BIGdavalad]

Accountants don't cost all that much. I know a lot of lads who've left the Army and started companies (number of employees, one) because they then pay less tax when they get a job (sorry, their company wins a contract) and none of them are earning anything like Jimmy Carr must be. Anyone who's not on PAYE can employ any legal tax avoiding dodge they or their financial advice can think of.

Anyone who's ever bought a duty free has avoided UK taxes, anyone who's gone on a booze cruise has avoided UK taxes, anyone who uses Amazon is benefiting from lower prices which are possible, in part, because Amazon probably pays less UK tax than I do.

[Veinticinco de Mayo]

Duty Free - Dava you are getting desperate lad

[weebroalan]

The hypocrisy in here is unreal - how many people have paid 'cash in hand' for a job?

How many people have done a job for 'cash in hand'

How many people have been straight on the phone to HMRC when they've messed up their tax in the individuals favour - or have you waited until HMRC contact you?

How many people have bought knock off DVDs, music, fags, alcohol?

How many people have downloaded music, films etc from the net illegally?

How many people have copied their mates CDs?

All of the above have broken the law and evaded tax - Jimmy Carr only avoided tax.

Tax evasion is illegal but tax avoidance is legal.

Tax avoidance is about implementing schemes to pay as little tax as legally possible - in simple terms it is making sure you have an accountant that understands how to deduct all your tax allowable expenses from your sources of income so you 'avoid' paying as much tax as you can.

The problem here is the law - the law needs to be changed, plain and simple

[BIGdavalad]

Duty Free - Dava you are getting desperate lad

No it's not. It's buying something available in the UK but not having to pay UK tax on it. It's avoiding tax, only apparently it's an acceptable way of doing it.

[-Q-]

If you live in Iran? Yes.

  Quite staggered by this response.

[muyuu]

The hypocrisy in here is unreal - how many people have paid 'cash in hand' for a job?

How many people have done a job for 'cash in hand'

How many people have been straight on the phone to HMRC when they've messed up their tax in the individuals favour - or have you waited until HMRC contact you?

How many people have bought knock off DVDs, music, fags, alcohol?

How many people have downloaded music, films etc from the net illegally?

How many people have copied their mates CDs?

All of the above have broken the law and evaded tax - Jimmy Carr only avoided tax.

Tax evasion is illegal but tax avoidance is legal.

Tax avoidance is about implementing schemes to pay as little tax as legally possible - in simple terms it is making sure you have an accountant that understands how to deduct all your tax allowable expenses from your sources of income so you 'avoid' paying as much tax as you can.

The problem here is the law - the law needs to be changed, plain and simple

Well put. I avoid paying stupid tax levels directly or indirectly by buying from Argos, Amazon, etc. all of which openly avoid paying all the UK taxes high street shops have to abid to.

Morality is human, and thus ever changing.  If we decide that aggressive tax evasion is unethical then it becomes so.  You've just made the point yourself by calling apartheid a criminal regime. It clearly was not, it was the legitimate legal regime in South Africa.  Yet gradually the rest of the world came to see it is as immoral and criminal. 

I don't look to society in order to make up my mind. It clearly violates (Hobbesian) natural rights, and I strongly believe in this concept. Maybe it's because I'm rather asocial, but I don't believe in the concept of justice by consensus, or moral relativism.

I am suggesting that the same thing needs to happen, and is happening with aggressive tax avoidance and that as with South Africa we do not need to rely on the politicians. This is a change that we can bring about ourselves through public pressure (or a series of witchhunts as I am sure you would characterise it).

Qualified representative rule is a much, much more effective means of government than mob rule. What you describe is simply ochlocracy.

Your time is up and we are coming to get you.

Good luck getting to my measly savings from my Natwest account

[Veinticinco de Mayo]

I don't look to society in order to make up my mind. It clearly violates (Hobbesian) natural rights, and I strongly believe in this concept. Maybe it's because I'm rather asocial, but I don't believe in the concept of justice by consensus, or moral relativism.

Qualified representative rule is a much, much more effective means of government than mob rule. What you describe is simply ochlocracy.

I'm not suggesting that you should look to society to make up your mind, the process works the other way. We look at the world, we see huge cuts in spending, rises in taxes and government finances under real stress. We also see multi-millionnaires paying less than 1% tax on their earnings while a family scraping buy have to pay 25% and we think that this is not right.  As more and more people come to that view then it becomes societally unacceptable and eventually immoral.

Morals are clearly relative, they change over time and they change from culture to culture.  It is so incontestable I am not even going to argue it with you.

And at no point have I advocated overthrowing our elected government or changing the country from being a representative democracy. I am merely pointing out that as consumers we have the power to change the behaviour of those who rely on our consumption for their wealth. We do not need to wait for our politicians to free themselves from their vested interests and do the right thing for us.

I am sure that Hobbes would have approved wholeheartedly of our ability to chose where to spend our hard earned money.

[muyuu]

Cue wikipedia (emphasis mine)

Ochlocracy (Greek: ὀχλοκρατία, okhlokratía; Latin: ochlocratia) or mob rule is government by mob or a mass of people, or the intimidation of legitimate authorities. As a pejorative for majoritarianism, it is akin to the Latin phrase mobile vulgus meaning "the fickle crowd", from which the English term "mob" was originally derived in the 1680s.[1]


I understand your frustration. It's only human to want change in those things that seem unfair to us, but as you can see in this thread there isn't any sort of social agreement on your position even if you and your peers may have it.

I for one don't see anything wrong in Carr's behaviour. I do see wrong in Cameron's false flag rhetoric.

[Veinticinco de Mayo]

Cue wikipedia (emphasis mine)

Ochlocracy (Greek: ὀχλοκρατία, okhlokratía; Latin: ochlocratia) or mob rule is government by mob or a mass of people, or the intimidation of legitimate authorities. As a pejorative for majoritarianism, it is akin to the Latin phrase mobile vulgus meaning "the fickle crowd", from which the English term "mob" was originally derived in the 1680s.[1]


I understand your frustration. It's only human to want change in those things that seem unfair to us, but as you can see in this thread there isn't any sort of social agreement on your position even if you and your peers may have it.

I for one don't see anything wrong in Carr's behaviour. I do see wrong in Cameron's false flag rhetoric.

Erm, I know what it means. I just don't agree that I am advocating it.  And there were still lots of people defending slavery in 1833, they never stopped the tide of public opinion changing either.

[Corkboy]

Erm, I know what it means.

Shut up and learn, VdeM. After all, he "understands your frustration".

[redmark]

Why do people insist on ignoring the vital distinction between people keeping the money they have earned and people taking money earned by others whether legitimately and legally (through housing benefits) or illegitimately through benefit fraud?

Because the money "they have earned" is a) based on an assumption that they'll pay the fucking tax on it, and b) is enabled by certain aspects of social provision from other people paying their fucking taxes. An individual's earning potential is dependent on their education, the health system, public infrastructure and the wider economy (of which public spending derived from taxation is a significant part). Nobody "earns" their money in a vacuum; and, the small number of headline fraudsters apart, most benefit fraudsters are the poor getting a bit more money. Tax avoidance is the rich not wanting to pay what they should.

On official figures, tax avoidance (£35bn) is over 30 times more costly to the taxpayer than benefit fraud (£1.1bn). Even if unofficial higher figures for benefit fraud (£5.5bn) - but not avoidance - are used, it is more than 6 times as costly.

I don't ignore the distinction between benefit fraud and tax avoidance. Tax avoidance is far worse, both individually and in it's impact on the economy.

[BIGdavalad]

On official figures, tax avoidance (£35bn) is over 30 times more costly to the taxpayer than benefit fraud (£1.1bn). Even if unofficial higher figures for benefit fraud (£5.5bn) - but not avoidance - are used, it is more than 6 times as costly.

So why aren't the Government closing the loopholes instead of dickhead going on TV discussing one person's tax affairs that really are fuck all to do with anyone except that person, his accountant and the Exchequer so long as they're legal?

[Veinticinco de Mayo]

So why aren't the Government closing the loopholes instead of dickhead going on TV discussing one person's tax affairs that really are fuck all to do with anyone except that person, his accountant and the Exchequer so long as they're legal?

Because they are, or are funded by, those saving the £35billion not by those costing the £1.1bn

[redmark]

So why aren't the Government closing the loopholes instead of dickhead going on TV discussing one person's tax affairs that really are fuck all to do with anyone except that person, his accountant and the Exchequer so long as they're legal?

Because a) what VdM said and b) Cameron's an idiot - because he's opening his own party and backers up to some examination. Hopefully, inadvertently, this will create a bit of pressure to tighten some of the loopholes; though I won't hold my breath. I'd hope that Labour would take note that there has been a public reaction (the point that public services are being cut while the rich avoid paying their taxes is a powerful one) and work a serious review of tax avoidance schemes into their policies before the next election.

[muyuu]

Because a) what VdM said and b) Cameron's an idiot - because he's opening his own party and backers up to some examination. Hopefully, inadvertently, this will create a bit of pressure to tighten some of the loopholes; though I won't hold my breath. I'd hope that Labour would take note that there has been a public reaction (the point that public services are being cut while the rich avoid paying their taxes is a powerful one) and work a serious review of tax avoidance schemes into their policies before the next election.

Like labour wouldn't need to clean shop themselves. Both parties have the exact same problems, they just play a different act.

[Lord Roger Hunt]

1. Not true. If you are a citizen of an EU country then you are entitled to free care throughout the EU with an EHIC card (replaces the old E111 emergency care).

2. Presumably you're equally as up in arms about the people from the UK who go over to Poland or other countries to get cheap dental work done and thus defrauding our poor, hard-working dentists of some coin?

1.  Specifically not referring to EU citizens but, apologies, didn't make that clear.

2.  Eh?  Are Poles subsiding the work via their taxes?  Sorry, can't see the link..... 

[stevedo]

Like labour wouldn't need to clean shop themselves. Both parties have the exact same problems, they just play a different act.

It's rather puzzling that one of the standard defences of the Tories is "They're all the same/Labour are just as bad". Surely if you felt like this you would either declare you have no intention of voting for either party, or be just as comfortable voting Labour as Conservative? 

[muyuu]

It's rather puzzling that one of the standard defences of the Tories is "They're all the same/Labour are just as bad". Surely if you felt like this you would either declare you have no intention of voting for either party, or be just as comfortable voting Labour as Conservative? 

Tory who? I'm just arguing that Labour won't go there because they'd have just as much to worry about as the Conservative party.

Assuming I vote Tory? never voted Tory. I'm tempted though, my MP (Labour) is a right twat. They are the same shit, I won't bother next time to be honest.

[jaymc]

So why aren't the Government closing the loopholes instead of dickhead going on TV discussing one person's tax affairs that really are fuck all to do with anyone except that person, his accountant and the Exchequer so long as they're legal?

Thats fair enough, but people like yourself saying 'so what its legal' wind me up just as much. Its only legal because someone has said it is, and further to that its only legal for people who make lots of money. So what if its fucking legal, thats not what we should be questioning and whether jimmy carr is bad or not, but rather why the fuck is this legal?

Why is it legal for someone earning 3 million to pay basically fuck all tax, but not for someone paid a few quid cash in hand not to declare it? Why cant someone working for the council, or in a cafe avoid their tax legally. Whole countrys a bunch of fucking mugs, ringing phone ins saying 'if i could get away with it i would, dont see what the fuss is about', your never gonna get away with you dickheads the systems set up so you cant possibly get away with it, but people with dough can.

[BIGdavalad]

its only legal for people who make lots of money.

No it's not, there's no minimum level of income to legally be able to take advantage of tax avoidance schemes.

Why is it legal for someone earning 3 million to pay basically fuck all tax, but not for someone paid a few quid cash in hand not to declare it?

Because not declaring your income is attempting to evade all your taxes, Carr paid the taxes he was legally obliged to.

Why cant someone working for the council, or in a cafe avoid their tax legally.

They can if they're not on PAYE. I know plenty of lads who aren't on huge money who are legally avoiding a lot of tax.

[weebroalan]

Thats fair enough, but people like yourself saying 'so what its legal' wind me up just as much. Its only legal because someone has said it is, and further to that its only legal for people who make lots of money. So what if its fucking legal, thats not what we should be questioning and whether jimmy carr is bad or not, but rather why the fuck is this legal?

Why is it legal for someone earning 3 million to pay basically fuck all tax, but not for someone paid a few quid cash in hand not to declare it? Why cant someone working for the council, or in a cafe avoid their tax legally. Whole countrys a bunch of fucking mugs, ringing phone ins saying 'if i could get away with it i would, dont see what the fuss is about', your never gonna get away with you dickheads the systems set up so you cant possibly get away with it, but people with dough can.

So set up your own business and go self-employed. That way you can avoid paying all your direct and indirect taxes together with your NI contributions - you'll have no employer deducting your tax at source that way.

Except that is blatantly illegal unlike what JC has done which is to order his tax affairs in such a way as to legally mitigate as much tax as is legally possible - if you think he's paying too little tax then take it up with your MP not JC.

[weebroalan]

I know plenty of lads who aren't on huge money who are legally avoiding a lot of tax.

Probably the same lads who are slagging JC off for his tax affairs

[BIGdavalad]

Probably the same lads who are slagging JC off for his tax affairs

The number of people that I know who give a shit either way is around zero. The few people who have an opinion seem to think that 'so long as it's legal who cares?'.

[Veinticinco de Mayo]

So set up your own business and go self-employed. That way you can avoid paying all your direct and indirect taxes together with your NI contributions - you'll have no employer deducting your tax at source that way.

Except that is blatantly illegal unlike what JC has done which is to order his tax affairs in such a way as to legally mitigate as much tax as is legally possible - if you think he's paying too little tax then take it up with your MP not JC.

Because the entire population can set up their own businesses and become self-employed?  The line of argument that you are Dava are pursuing is farcical. Comical.

[BIGdavalad]

Because the entire population can set up their own businesses and become self-employed?  The line of argument that you are Dava are pursuing is farcical. Comical.

The line of argument that it's not only the rich who can avoid tax? Not really, since it's true.

[weebroalan]

Because the entire population can set up their own businesses and become self-employed?  The line of argument that you are Dava are pursuing is farcical. Comical.

Almost as farcical and comical as people who would do cash in hand and think it's ok but somehow think that JC has done something worse.

The only thing JC has done wrong is be a hypocrite by making fun of people who mitigate their tax affairs whilst he is doing the same himself!

I'm surprised so many people on RAWK are so duped by Cameron/Osborne - they have tried to cover up their failings on the tax system by turning the spotlight on JC and RAWK has taken it hook line and sinker.