Tax Star Distraction
Read all about it: People You’ve Heard Of undertaking Massive Tax Fraud. We’ve had Jimmy Carr and a bunch of other stage figures out-ed as tax avoiders, or maybe even evaders. The problem was right on the end of our noses – our TV screens – all along. Is this a real story? Yes. Is it the real story? No. Its barely significant.
The issue of tax dodging isn’t going away. The victory of UK Uncut in making tax a front-page media issue has been incredible, and has paved the way for a dozen other campaigns surrounding the values and mechanisms of taxation. This government, like many others, cannot ignore Tax as an issue. But if they can’t make it go away, there is one other thing they can do with it: shift the focus away from their friends in high places.
Let us put the figures in context. Our embarrassed performers avoid the sort of sums of money that could provide care to maybe a handful of people with severe disabilities. Vodafone avoided, in tax on a single transaction, the money required to cover the initial £6billion cut in the welfare budget.
But the government and certain industry figures embedded in Whitehall have clearly taken a decision to make the problem one of a few thousands in tax avoided by celebrities, so we ignore the really big sums of money involved in corporate tax avoidance. The government is nervous, but it may now hope it has gotten away with appearing to do something.
Its arguable that a similar tactic was pursued under the ‘pasty tax’ fiasco – the problem wasn’t corporations shirking their responsibility to spend, it was ordinary working class people not paying tax on their pasties. The problem isn’t the rich, its you. Or both the rich and you. In which case, be careful what you wish for, because you too benefit from tax dodging. Except, of course, you don’t, because it was incredibly difficult to argue whether VAT was due or not, and the main beneficiary of pasties not being VAT-attracting products is and remains a company who have shoved numerous local and regional businesses underwater and who engage in Workfare, and possibly even tax avoiding. (*)
The great challenge regarding tax avoidance is, as it always has been, arguing for the proper implementation of corporation tax here and around the world. The social good provided by private enterprise is not put at risk by taxation, it is taxation. If a company or business leader wishes to leave the country because of a rise in taxation, it is unlikely they will be missed by more than their richest friends, and will make way for more responsible companies to take over their various functions.
The same may be true for TV stars, but we lose a lot less money as a result of their activities. But righting the wrongs they have done with regards their taxes is almost pointless compared to the sums by which our society is defrauded by our biggest corporations. Lets not allow ourselves to be distracted by a few falling stars.
(* VAT itself is, of course, a hugely regressive tax, levied against the poorest more than the richest. Those who earn most, put the highest proportion of those earnings into savings, whilst the rest of us buy products that attract VAT. You and I lose out under the shift from tax on earning to tax on spending, precisely because we have to spend a higher percentage of our income).