(I was going to entitle this post "Why Britain is Sc**wed", but that just seemed to invite the response "Let me count the ways.")
Today's exhibit is the leading article (i.e editorial) in The Times (of London). The Times, you will recall, is a Murdoch paper. It is entitled Morality, Money and Tax. Some excerpts:
The defence that tax avoidance is within the law is no real defence at all. There is no moral case for most such schemes and the loss to the nation is too great.
Tax avoidance is not justified solely by the plea that is it is within the law. Tax avoidance is a way of playing the system to gain reward that has not genuinely been earned. It is, indeed, a form of cheating.
There is a moral cost to this avoidance. The goods that we share in common, the public services that a developed nation needs, the welfare state that a civilised nation requires, have to be funded out of a general pool of taxation.
The vast majority of people, hard-working and not at all wealthy, have no option other than to contribute their reasonable share. It is simply an abnegation of moral responsibility entirely to opt out of collective financing for great personal gain.
It is time to end the gaming of the tax system. Ordinary people are taxed on their income and expected to pay it; wealthy people are taxed at higher rates on their much higher incomes and invited to avoid it. The avoidance damages society. It robs the Treasury of the money it needs to fund services to the public, while leaving the public with the sense that, for some people, the normal rules don't apply.
This is in the context of a Times 'investigation' into taxpayers participating in schemes that take advantage of tax breaks introduced by the (Labour) government in 1997 to encourage investment into film production.
A terminological note: 'tax avoidance' is just legally reducing the incidence of tax; 'tax evasion' is failing to pay an amount of tax actually owed; and 'tax fraud' is committing fraud (e.g. forging a document) to reduce the incidence of tax.
Note the underlying logic of the article:
- The nation and the state are the same thing.
- Not paying something to the government is a 'gain' to the person not paying it.
- The only means by which collective action is possible is the state.
- Civilization = welfare = the welfare state.
- Confiscation of income by the state is normal.
This is the voice of the establishment.
The Conservative (but see, generally, James Delingpole) Prime Minister, David Cameron, weighs in to say that the entirely legal tax planning of a private citizen (albeit the deeply hypocritical Jimmie Carr) is "quite frankly morally wrong".
What think the Ricoteers: is Tax Avoidance morally repugnant, or is it in fact a moral imperative? And can Britain be saved?