Vanessa Houlder is a journalist who usually writes good articles for the FT.
This morning she delivers an exception. When writing about tax protests she seems to have failed to contact almost anyone involved in the debate from the side that is saying that there's a serious problem inherent in the tax gap in the UK.
First she quotes David Gauke - a minister at the Treasury, saying:
The idea that spending cuts would be unnecessary if only everyone paid their taxes is “incredibly naive”, according to David Gauke, a Treasury minister.
Yes, but that's not what they're saying. At best I'm arguing oily £20 billion a year could be raised from the tax gap. So that's a straw man Mr Gaulke, that goes unchallenged.
And then there's ampoule space given over to my old friend Prof Mike Devereux from the Oxford Centre for the Non-Taxation of Business, who in his own usual and distinct style decides to light the blue touch paper, saying:
It is very hard to tax capital in the way we try to tax it now by identifying where it is located,” says Prof Devereux. “The more I think about it the more crazy it is.” A better approach to taxing profits would, he says, be a form of value added tax.
Of course Mike. Let's tax consumers - including the poorest in the country - to ensure capital isn't taxed. That's the basis for justice, isn't it?
But three more quotes to finish:
Apparently relentless competition for jobs and revenues will result in sustained downward pressure on tax rates, according to the OECD’s Mr Owens. Along with the trend towards increased consumption taxes paid by rich and poor alike, a structural change is under way that is “probably leading to a less progressive system”. Governments should look at other approaches — involving wealth and inheritance taxes, for example — to share the burdens and rewards of globalisation. He adds: “There has to be a role in the tax system to reduce inequality.”
Of course there is - but not if you are in the UK, or so it seems.
And:
The message is a challenging one for governments. Their struggle to improve competitiveness is likely to exacerbate grievances among voters about the unfairness of the system. Tax protests are a symptom of a concern that is unlikely to go away.
In Britain, UK Uncut, which styles itself as an “army of citizen volunteers determined to make wealthy tax avoiders pay”, is preparing again to hit the streets. “We have hit a nerve,” says one. “We are not going to stop.”
I'm sure that is true. As equally sure as I am that this is true:
“UK Uncut worries people like me,” says a multinational executive. “It shows how much raw anger there is out there. It would be understandable if the facts were right.” He complains about ignorance over how much tax business actually pays in Britain — at least £150bn from all levies, more than one-quarter of all tax revenues. He acknowledges, however, a failure by companies to explain their strategies: “It is very hard to explain a tax structure without looking guilty.”
No it isn't. Try country-by-country reporting for a start and you'll suddenly find it an awful lot easier.
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“Yes, but that’s not what they’re saying. At best I’m arguing oily £20 billion a year could be raised from the tax gap. So that’s a straw man Mr Gaulke, that goes unchallenged.”
So are you now saying that we should indeed cut public spending? Because if you aren’t then Mr Gauke is correct and it is not a straw man.
In fact, all these tax protesters – unions, uncut, truk – have been heard at various times to say we don’t need to cut public spending at all.
@Harry Waterman
Tackling the tax gap is one of a range of mechanisms to deal with the deficit
http://www.taxresearch.org.uk/Blog/2010/12/17/the-alternative-economic-policy-we-need/
Gauke is wrong
And you look awfully like a troll to me
Which is why I’ve deleted other comments you’ve made
Mike Devereux and his ilk talk about the ‘pressures’ on tax as if they were like Greek gods in a drama, totally outside the control of everyone. Like everything else, they are the result of choices, choices made by the wealthy and powerful, and pretending otherwise is a rationalising discourse to mask this operation of power.
Break down the UK’s uncompetitive labour market to its base principals:
1. In order to be competitive, business needs to eb able to hire workers on cpmparable wages to otehr countries.
2. In order to hire at competitive wages, the workers must be able to sustain a decent living from said wage.
3. A decent living from a lower wage (read more competitive) means a. reducing the cost of necessities: Housing, Energy, Food and b. reducing the tax burden on EMPLOYEES (ie lower NI, lower marginal income tax rates)
4. In order to reduce the cost of these necessities we need to reduce house prices, bring back up the value of sterling so imported energy and food and oil is cheaper and begin producing more essential goods and services within the UK itself.
5. In order to reduce the employee tax burden, the state needs to spend less as a % of GDP from the present 54% down to a more competitive and sustainable 40%
We can increase our competitiveness WIHOUT cutting corporation tax rates and need to stop kowtowing to big business VI’s
The plain ignorance of politicians, journalists and independant commentators to how interconnected so many of the UK’s problems are is disheartening to say the least.
@Malcolm James
Agreed
@Anand
I see massive inconsistencies in your aims – most especially your desire for low prices that need regulation but a dislike of state intervention
“When writing about tax protests she seems to have failed to contact almost anyone involved in the debate from the side that is saying that there’s a serious problem inherent in the tax gap in the UK.”
In other words, “why haven’t you rung me up so I can charge a fee?”
@Roger Wright
You think you get a fee for talking to the FT? You’re sadly deluded
And I was not planning me necessarily – it could have been the Tax Justice Network or the TUC or PCS
But balance was needed
This comment was deleted for use of inappropriate language
And for content
Completely agree with Richard on this one. Big business is sucking the life blood out of the economy by charging as much money as they can from consumers by making them by there products and then hiding there profits offshore. They need to realise that they owe the government and the people of the UK for allowing them to operate and make such obscene profits. I support UK Uncut and the Tax Justice Network, who, unlike most of my compatriot’s, have realised that enough is enough. We need proper Tax Justice. We need to make these company’s pay their share. We also need to make them realise that the public sector provides real value and actually puts money into the economy, instead of gready bankers pocketing it and spending it on themselves.
@Anand – your obviously a selfish capitalist — cutting employees’ taxes will only result in them being poorer in the long run.