Cameron - tax avoidance morally wrong

homelessskilledworker

Clifford_Pope wrote: »

The whole point of tax allowances is to encourage people to avoid tax.

Everyone gets tax allowances at some level.
Lots of people avoid tax by paying into a pension scheme.
Some avoid tax by washing their uniform at home.
Others avoid tax by pricing their house at just under the stamp duty threshold.

It's ok to pay 1% tax??

Get away with you, I am sure you do not mean that.
When I read about the old Labour days when the rich were paying more than 90% tax, that was wrong.
This is now the other extreme.

homelessskilledworker

vivatifosi wrote: »

Jimmy Carr has just made a statement (don't have text at moment) saying he's made a terrible error of judgement.

Yep!!


Just like the hundreds of MP's who were screwing the system for years

They got caught!!

bankhater_1965

jimmy carr is now sorry , he had every intention of tax avoidence till the law is changed, lets face it the tory mps are all millionarres ,they wont be ina rush to change things , they have known about such schemes for along time and there in there 3rd year of goverment , dont make me laff

DiggerUK

What is being avoided in this thread, is the simple fact that the rich have umpteen ways to avoid having to pay tax, and always have, everyday Joe's and Jane's don't.

It's a scandal how little the rich ever have to pay. And prime minister after prime minister does nothing about it. But don't forget....we are all in this together.
..._

homelessskilledworker

I would love to see a database out there of money earned and tax paid. whether it is a footballer, rock star, movie star, businessman, London city boy, if you earn 1 million, you pay £250,000 as the norm.

If they do not pay this rough equation(say 20/25%) and end up paying well less then 10% and then come out with all this " Ehhh, Mmmm, well I used the law you know"
We will make our own judgements on the rights and wrongs of his avoidence, example I will turning the TV off now when I see Jimmy Carr, and will never watch him at another comedy Gig like I have done in the past.


I do not want to see the rich stuffed in the UK, I would actually like to see their top band reduced. But from the poorest to the richest, good and bad I want to see ALL pay their 20/25% tax

MacMickster

wymondham wrote: »

I don't understand the drama. If it's illegal then that is wrong, but if it's not then it's fine - nothing to do with 'morals'.

If the government don't like the ways of avoidance then they should close them. I half suspect they don't as MP's are using them as well!

I think that the problem with this statement is that most tax avoidance schemes rely on unintended consequences.

Say the government intends people to pay 40% tax on their income, but then sets out some exemptions to that with the intention of making the tax system fairer and to encourage financial behaviours which it considers desirable (personal allowances, lower rates of tax on lower incomes, tax relief on pension contributions etc). They then realise that people often have more than one source of income, so allow losses from one source to be set off against the income or profit from another source. Most people would think that this was reasonable.

At this point, however, an accountant devises a scheme using unintended interactions between this legislation and other pieces of legislation to "manufacture" a paper loss (although no money is actually lost) and will provide clients with details of this scheme if they each pay him £250,000.

Now this scheme will obviously only be worthwhile to individuals paying significantly more than £250K in tax. The interactions between pieces of legislation were never the intension of legislators, or those drafting the legislation, and serve to frustrate the intensions of our elected government. Although legal, I am sure that most people will find this morally repugnant.

It is, however, the complexity of tax legislation in this country which allows this to happen. At least once every year, the chancellor tinkers with tax legislation. It may take some of the best minds in the accountancy profession a number of years to find unintended interactions between the new legislation and existing provisions which can be used to produce the perverse results that form these schemes which they can sell to their clients.

Successive governments try to clamp down on these loopholes as they discover them, but by then the rich have already benefited from them, and another budget or two has introduced more unintended loopholes for these accountancy firms to exploit.

The only way that I can see to remedy this is to make it known that any company, individual or firm found to be engaging in aggressive tax avoidance to frustrate the intentions of government will be disbarred from any government or public sector contract until they both sign an undertaking not to do so in the future and repay the tax saved from participation in this scheme.

prowla

MacMickster wrote: »

The only way that I can see to remedy this is to make it known that any company, individual or firm found to be engaging in aggressive tax avoidance to frustrate the intentions of government will be disbarred from any government or public sector contract until they both sign an undertaking not to do so in the future and repay the tax saved from participation in this scheme.

So, you would penalise people for acting within the law.
That is a very dangerous approach, because it would rely on non-lawful opinion.

homelessskilledworker

MacMickster wrote: »

I think that the problem with this statement is that most tax avoidance schemes rely on unintended consequences.

Say the government intends people to pay 40% tax on their income, but then sets out some exemptions to that with the intention of making the tax system fairer and to encourage financial behaviours which it considers desirable (personal allowances, lower rates of tax on lower incomes, tax relief on pension contributions etc). They then realise that people often have more than one source of income, so allow losses from one source to be set off against the income or profit from another source. Most people would think that this was reasonable.

At this point, however, an accountant devises a scheme using unintended interactions between this legislation and other pieces of legislation to "manufacture" a paper loss (although no money is actually lost) and will provide clients with details of this scheme if they each pay him £250,000.

Now this scheme will obviously only be worthwhile to individuals paying significantly more than £250K in tax. The interactions between pieces of legislation were never the intension of legislators, or those drafting the legislation, and serve to frustrate the intensions of our elected government. Although legal, I am sure that most people will find this morally repugnant.

It is, however, the complexity of tax legislation in this country which allows this to happen. At least once every year, the chancellor tinkers with tax legislation. It may take some of the best minds in the accountancy profession a number of years to find unintended interactions between the new legislation and existing provisions which can be used to produce the perverse results that form these schemes which they can sell to their clients.

Successive governments try to clamp down on these loopholes as they discover them, but by then the rich have already benefited from them, and another budget or two has introduced more unintended loopholes for these accountancy firms to exploit.

The only way that I can see to remedy this is to make it known that any company, individual or firm found to be engaging in aggressive tax avoidance to frustrate the intentions of government will be disbarred from any government or public sector contract until they both sign an undertaking not to do so in the future and repay the tax saved from participation in this scheme.

Wonderfully put, and in a way I am envious of:)

But you still articulate the same thoughts as me and millions of others in our own clumsy way.
I am sure it is a constant battle to prevent the rich taking advantage of loopholes, but like I said in a previous post, show us their earnings and then show us their tax bill and we will make our own mind up.

I am sick of hearing the weazle words of those that take the mike out of what is a fair system. What is needed in this country is a good dose of stigma again, and not just for tax.

MacMickster

prowla wrote: »

So, you would penalise people for acting within the law.
That is a very dangerous approach, because it would rely on non-lawful opinion.

There are many precedents where this already happens. Membership of the BNP is legal, but people are penalised for this if they work in the police force for example.

Civil Servants are not allowed to take part in legal political activity.

Local government employees can be disciplined for activities which, although legal, are felt to bring their employer into disrepute.

As far as aggressive tax avoidance goes, I believe that individuals and companies who engage in this should be disbarred from public sector contracts as, by setting out to frustrate the intentions of the government of the day, they are effectively acting in a manner which would bring any public sector organisation into disrepute (eg top civil servants employed through service companies recently).

lostinrates

homelessskilledworker wrote: »

Wonderfully put, and in a way I am envious of:)

But you still articulate the same thoughts as me and millions of others in our own clumsy way.
I am sure it is a constant battle to prevent the rich taking advantage of loopholes, but like I said in a previous post, show us their earnings and then show us their tax bill and we will make our own mind up.

I am sick of hearing the weazle words of those that take the mike out of what is a fair system. What is needed in this country is a good dose of stigma again, and not just for tax.

I think it would be good to see tax bills. As the 100k salary was raised early i would say that in our experience the effective tax rate on this is tantamount to punitive.