After birth and prior to death the only cast iron guarantee we have is that we are going to pay tax. If you’re reading this as a resident of the United Arab Emirates or Saudi Arabia please google ‘taxes’ for an explanation on this. For everyone else in the world paying tax is considered compulsory and there are in theory a good number of laws to back this compulsory law up but it’s becoming clear that some individuals and many companies don’t necessarily regard paying tax as that important and so this week Apple have joined Starbucks,google and Facebook as the latest companies who have recently been outed for being involved in perfectly legal tax avoidance schemes within the UK. Of course the knee jerk reaction to all of this is that many people get terribly indignant and very self righteous about it all and then follow it up by announcing that, for a short term at least,they are going to ban themselves from using these products…Unless of course they like their iPhones, coffee and social networks just that bit too much.But its not just corporates that are under the spotlight as Jimmy Carr and Bradley Wiggins will testify and although the corporates have a kind of ‘so what’ attitude the celebs,who are more vulnerable to public pressure,publicly withdraw from them and apologise for their errors of judgement. Isn’t it funny though that these errors of judgement only happen when they get caught out?
But, seriously, who cares? If Starbucks pay more tax, we’ll end up paying it for them anyway by way of higher prices in their stores and if Apple do the same our iPads will get more expensive to compensate for it so is it a case of being careful what you wish for? And anyway let’s face it’s the politicians that make laws with loopholes and It’s Lawyers who exploit them on behalf of their clients so if there really was a political will and a proven way to gain votes by closing these loopholes then these laws would vanish tomorrow. However there isn’t one and that’s because half of our politicians don’t have the power to do it and the other half that do have the power have their noses in the same trough.Personally I don’t give a damn if Carr or Wiggins or anyone else earns a squadrillion pounds every day and I care less if they join legal tax avoidance schemes. In fact I’m very envious of them and I’d like a slice of the pie myself so if you’re a clever financial adviser please email me at email@example.com and share the love. Conspiracy theorists will I’m sure link Wiggin’s recent ‘outing’ and his ‘ accidental’ coming together with a van driver as some kind of payback and in which case Jimmy Carr could be well advised to stick to driving and beef up his security.
The ‘right’ amount of tax that we should pay seems to vary depending on your political leanings with most sensible political parties telling us that they will tax us less and spend it more wisely than the other parties. All of this of course is an outright lie but just as men believe that using lynx deodorant will make them irresistible to women and women believe that anti ageing skin cream actually works, collectively we begin to believe them. Our coalition government consists of one party who tell us they want to tax us the least and another who says they want to tax us the most and the reality is that they both get their own way with rich Tory voters paying less and poorer to middle class people paying more thus guaranteeing the thin end of the wedge for almost everyone.And then you have the socialists who will of course argue that anyone earning up to £10,000 a year would pay tax at a rate of 90% as well as being asked to forgo at least one useable limb,Anyone earning over £100,000 a year would be forced to hand over all their income as well as have all possessions forcibly sold off and anyone earning £1m a year or more would be shot.The only exception to this would be union leaders who are in it ‘ for their fellow brothers’ and definitely not for their own self gain. Honest.
So we need a balanced middle ground where we can keep as much of our income as possible, be able to get by day to day or even enjoy life and have something to show for our daily toil. Paying the right amount of tax of course funds the very things that we have come to regard as part of a civilised nation such as the welfare state that we are so rightly very proud of and that is the envy of pretty much the rest of the world.So much so infact that they are willing to risk everything to live here in the land of milk and honey. We want the kind of society where the sick and aged are cared for and respected and the incapable are supported.
In my opinion those unwilling to contribute should be treated the same whether or not they are celebrities,corporates or just spongers.Why cant we legally revoke the licences of companies that refuse to pay up?why cant we ostracise celebrities who beat the system and why can’t we refuse to pay out tax in the form of benefits to those who refuse point blank to go to work and sponge of everyone else ( this being a topic for another time I think) So I think the time has come for a new approach and to turn the tax system on its head. The present system favours the lower earners, punishes the middle earners and encourages the wealthy to avoid paying tax altogether. We need a system where we encourage the lower earners to earn more,encourage the middle earners and reward the high achievers instead of financially beating them up instead.For example the trading floor of a city bank will make their employers tens of millions of pounds profits which will be taxed at the corporate tax rate of 24% the salaries and bonuses earned by the traders will be taxed at 50% meaning that simply through taxation these individuals have contributed massive tax revenues even before buying cars,boats and properties and therefore paying massive amounts of vat and stamp duty in the process. Contrast that with a lottery winner who will be jealously congratulated for winning the same amount of money or less and paying no tax at all.Also we are bullied into thinking that footballers salaries are ‘obscene’ and that nurses are undervalued.Well I’m not going to argue that either of those points are untrue but a footballer earning £100k per week will earn over £5m a year and pay tax at 50%. Just think about how many nurses that pays for.
Maybe we should collectively stop practising the politics of envy and instead practice the politics of fairness. Maybe far from having a go at successful people we should celebrate them instead? Bankers, footballers and top businessmen should be regarded as heroes and not villains as its them that pay the most tax and reduce the need for middle incomes like me from paying more so far from making them pay more we should give them some credit. And perhaps a hug.