Monday, 23 July 2012

Naming & Shaming Tax Evaders

Something that really got my back up about the austerity measures was the way that the Government attempted to demonise everyone but the people who were really conning the Government out of money.
We went through Civil Servants, students and the disabled sucking us all dry but it turns out that the richest 1% are stashing £13 trillion in secret offshore accounts to avoid tax. That makes the few million saved by removing the £30 a week living allowance received by student look like peanuts.
So now we know about it, what can we do about it because apparently tax evasion is legal, morally wrong but just a clever use of financial loopholes.
One Government idea, not the obvious one of closing the loopholes, is to name and shame them much the same way as comedian Jimmy Carr was outed as a tax avoider, paying 1% on his £3m annual income, and was fighting for his career which must have put the wind up a few people who saw what Carr was going through and wondered if they would face the same fate if outed.
My fear is that as Tory baiter Jimmy Carr was being hung out to dry, Gary Barlow, who was outed at the same time, was ignored by the Conservative Party, of who Barlow is a donor.
Would we just face a barrage of opposition donors who have evaded tax while the elite who slip a few pound to the Government slip under the radar? Every chance they would because no political party would volunteer to ostracise the people who pay their wages.
Still, the threat of being labelled a tax avoider would be toxic to any celebrity especially one that charge their fans a small fortune to see them in concert or play sport and live in splendour while not doing there share to dig us out of a hole just because they can afford fancy agents.
Wayne Rooney, Steven Gerrard, Gabby Logan, Guy Ritchie and Chris Hoy have all recently been forced to defend their tax arrangements.
About time the anger was directed at the right people but i can't see why tax has to be so complicated that people can tie the taxman up in knots, why not just fix a percentage for everybody so everyone pays the same percentage of tax on their income earned in the country?
No schemes that expand the base rate so more of your income is taxed at the lower rate, no write off's or carrying back losses to a previous years, just a standard flat rate for everyone with a massive financial penalty of 50% if you try to evade it. Why is that so difficult?


Anonymous said...

a flat rate seems far to me. i would support different rates:
- you earn less than $15,000 = zero tax
- you earn less than $50,000 = 10%
- you earn less than $100,000 = 15%
- you earn less than $250,000 = 20%
- everyone lese 30%


Cheezy said...

I'm with Q on this one - a progressive tax system is fairer than a flat rate.

As for stopping avoidance/evasion, it's a curly one for governments because the 'elephant in the room' that they don't want to look at is the fear that high earners might want to move their productive activities elsewhere if all of their loopholes were closed up. This is more relevant to the issue of company tax than income tax, but still... it's an underlying fear of most governments.

But it certainly is galling the way that HM Customs & Revenue comes down like a ton of bricks on the 'little man' who's been creative with his tax returns, but never would and never will against the bigger fish...

Lucy said...

I like the idea of a progressive rate but that is one of the main ways self employed people avoid tax. Using q's figures, they pay themselves £15,000 tax free and then do things to extend the £15,000 until all or most of their £50,000 is within the no-tax bracket or a minimal amount is in 10% and it all gets complicated again and the correct amount of tax is dodged.