Friday, 5 December 2014

Respect shown through tax avoidance policies

Labour`s recent statements regarding the need to show respect to the working people are accompanied by its standard policies, including those on reducing tax avoidance. Trouble is vague rhetoric about closing loopholes convinces no-one; its been heard many times before, and the tax gap keeps on growing. If the practice of having representatives from the Big 4 accountancy firms,which make billions from advising on tax avoidance, on Treasury tax committees, continues loopholès will never close.Osborne`s autumn statement was similarly vague, whilst his giving Northern Ireland freedom to reduce its corporation tax will only add to the confusion.
      What better way is there for Labour to show its respect for the people by having policies to ensure every individual and every company, with no exceptions, pay the correct amount of tax? There are a number of initiatives which Labour could introduce which would not only clearly illustrate to the electorate on whose side they really are, but also have instant election-appeal to effect the opinion polls. For instance, a business rate supplement to be paid to the government, in addition to the standard  local rate levied on firms, including the likes of Amazon and Starbucks, which insist on doing their utmost to pay as little tax as possible, despite their businesses flourishing from benefits paid for by the rest of us. Many of these companies would inevitably threaten to leave the country, but is their departure likely when they make so much money here? How many voters would actually disagree with making these unscrupulous firms pay their fair share?
     Labour can show its respect for working people by ensuring that not just them but everyone, individuals and businesses alike, has a responsibilty to pay taxes, as they provide the necessary security and transport so essential in a 21st century civilised state. Rich people`s wealth has been acquired not only because their firms have made profits, nor even because of the hard work done by employees, but because taxes others paid provided for the health and education of their workforce. Notwithstanding this duty to pay, firms could also be encouraged to pay up by the award of the Fair Tax Mark, which could be the firms` notification to the public that they are acting responsibly, and aiding the economy as a whole.
  At the moment only one FTSE 100 company, SSE, has qualified for the Mark, but with additional publicity from leading Labour politicians and bigwigs in the run-up to the election, it could become the must-have company logo in the next five years. Accompanied by a Fair Pay Mark, awarded to businesses paying at least the living wage to all those directly and indirectly employed by them, and increased public awareness, leading to more selective consumerism,  Miliband could soon be proclaiming to have stemmed the tide of 'predatory capitalism'! Eighteen of the top 100 companies currently pay a living wage, but who knows which ones they are?
    Then there`s the simple matter of honours, issued by governments to people whose efforts benefit the nation as a whole. Doesn`t that rule out all bankers and tax avoiders? If their companies cannot play by the rules shouldn`t CEOs forfeit their right to both past and future honours? It should apply to so-called celebrities and sports stars too. What could be a cheaper, more beneficial policy than that? A culture change is needed with regards to tax, and the idea that we would all avoid tax if we could afford the accountants needs immediate de-bunking. There will be no change, however, as long as the country continues to "honour" those who have deliberately deprived the Treasury of millions of pounds.
     What about the professionals whose expertise is needed to collect the correct amount of tax from individuals and corporations? Coalition policy has been to reduce the number of workers at HMRC whilst trying to convince us all tax avoiders will soon 'be smelling the coffee' because of their "morally" reprehensible behaviour. A Labour commitment to reinstate tax inspectors  is hardly rocket science, when each one is responsible for the collection of taxes at least three or four times their salaries.
       Closing loopholes and using the General Anti-abuse Law may well prove difficult in reducing what is an obscenely large tax gap, but these proposals could prove electorally fruitful for Labour, in an area which epitomises the coalition`s indifference to inequality. Many critics have suggested that Labour` current election  pledges do not go far enough, needing more detail and radicalisation. The electorate have clearly heard enough meaningless rhetoric on the subject of tax avoidance; some straightforward policies would go down well! Whilst not disagreeing with German and French finance ministers who think the "lack of tax harmonisation is one of the main causes allowing aggressive tax planning", until the European countries agree policies, Labour can still use tax avoidance initiatives to their own electoral advantage.

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