Monday, 11 April 2016

Taxation and the politics of envy

So should politicians and, if some people have their way other people in ‘public life’, choose to do what the rest of us will never be asked to do…reveal how much tax we pay?  Like the confessional, our tax affairs are sacrosanct; they are between us and the Inland Revenue and if we breach the rules we are subject to the Law.  Our personal relationship with the Inland Revenue is not governed by our morality but by the taxation rules enshrined in statute law structured so that people, by following the rules, pay no more tax than they are legally obliged to.  It is my right to plan my payment of taxes within those rules and that includes gifting to my children money on which they will not pay inheritance tax as long as I survive for seven years. So is this tax avoidance…well, yes it is, you are avoiding paying tax on your estate after you die.  We live in a society where tax avoidance has taken on a morally unjustifiable, and in the case of ‘aggressive tax avoidance’ repugnant, status especially if you’re wealthy while we are all quite prepared to avoid paying tax if we possibly can. 
Parallels have been drawn with the expenses scandal and the publication of David Cameron’s summary of his tax affairs that are to my mind spurious.  MPs’ expenses was about how some MPs defrauded the tax-payer of public monies and for which they could quite justifiably be held publically and legally accountable.  Politicians’ personal tax affairs or the tax affairs of anyone in the public eye may well be legally accountable to the rules controlled by Inland Revenue but they are not—and nor should they be—subject to public scrutiny.  As long as they operate their own tax affairs within the rules, whether we think they are avoiding paying tax is beside the point…they are acting within the rules.

I have on several occasions in the past commented on our tax system and the ways in which it operates.  Why should individuals because they hold a particular position in society be ‘compelled’ by public opinion or political opponents to reveal private tax affairs when Inland Revenue is perfectly happy with the amount of taxation those individuals are paying?  Ah, I hear you say, precisely because they are in the public eye and because they may well be wealthy in their own rights.  So it’s not really about how much tax they pay but because they’re ‘rich boys’.  I can see you getting greener as this goes on!!  But is the genie now out of the green bottle?  Not necessarily if politicians of whatever party have the guts to stand up to the pressure that they will undoubtedly be put under.  Some will publish and to refuse to do so raises the question…why not?   But you have to question the motivation of those calling for transparency…is it about people breaking the rules or is it moral indignation or is it about causing political embarrassment and making party political points?  If you don’t like the rules that apply to personal taxation than—and there’s a very strong case for doing so—change them but until that occurs why shouldn’t people apply those rules so that they do not have to pay any more tax than they are legally obliged to do so.  But then being morally affronted is so much easier!!!

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