David Cameron makes good his escape through the evasion/avoidance loophole

davegideon

Give the bloke his due, Jeremy Corbyn did launch a spirited attack on David Cameron in Parliament this afternoon. But as always, the Prime Minister chose the terrain upon which he would fight….and no Parliamentarian of real standing challenged those essentially legal grounds. Dear old Bolsover Beast blew an opportunity so to do out of pure mulish silliness, but he is still a fine man.

Nevertheless, as befitted another man dealing with tax loopholes about which he has been at best vague, CallMeDave wriggled through three loopholes and survived.

To stop him doing so, here are the five questions that, as Opposition Leader, The Slog would’ve made during today’s Commons debate about David Cameron’s character….which in my view requires no debate at all, but that’s another story:

  1. Would any of the measures he announced today have happened without the existence of the Panama Papers?
  2. Why did Cameron actively lobby the EU about ‘watering down’ tax evasion?
  3. What real evidence does he have that the Trusts issue would’ve scuppered such international agreement as we have today?
  4. If the tax laws are made – and the subject of intense lobbying by – rich individuals and corporations, isn’t the fact that something is deemed ‘lawful’ simply a weasel in the context of rampant inequality before the law?
  5. If the IRS, HMRC and other Sovereign tax collectors played a straight bat with all citizens about their real tax liability, surely tax avoidance would be just as illegal as tax evasion?

Regarding Q1, the answer is Cameron was caught on the hop by the PPs, and was forced to fall back on a heavily rewritten history of his anti tax evasion policies. As for Q2, Cameron dodged the question, but pointed out at Q3 that all the tax havens had been unwilling to give up on offshore Trusts. Spookily, the PM’s personal tax advantages came via…a Trust. As for the haven obduracy about them, we have only his word to guide us.

The two really key questions – because there is no answer to them that would satisfy any open-minded, fair individual – are those at 4 and 5. And tragically, Jeremy Corbyn did not highlight them because, I suspect, he doesn’t want to come across as a high- tax Labour looney.

The two questions run naturally together, in that they query the whole concept of something lawful necessarily being right. In 13th century England, it was lawful for noblemen to rape serf virgins. In 19th century Britain, it was lawful for landowners to evict tenants without notice or reason. In 20th century EU State the United Kingdom, it was lawful for undemocratic trade unions to call strikes without consulting a quorum of the membership. In 21st century Cruel Britannia, it is lawful for the main tax collection body to do seedy ‘deals’ with tax-evading multinational UK employers; it is also lawful for the Government to evade their political and moral responsibility to honour State pensions promises made to female citizens for over five decades.

All of this was lawful. But it was (and is) culturally harmful.

So let me state here and now that I find the distinction between evasion and avoidance of tax a confection.

Linguistically, the distinction is obviously false: if you evade an oncoming truck, you also avoid being hit by it. Legally, a law created to establish tax due from all citizens can only be avoided by the rich, because only they have the money to hire tax accountants who specialise in such things. The poor have to evade it by dealing in cash….and as such, are vilified in the Daily Mail by an Executive Editor who uses every tax fiddle available to avoid the very same tax.

If we criminalise one-off tax deals for rich companies – and at the same time hire better tax law drafters to close the loopholes – then we can abolish the hair-splitting “difference” between evasion and avoidance.

It really is that simple. But once again, Labour has missed an open goal…and with one mighty wriggle, David Cameron remains at large.

This is the reality: the Camerlot Conservatives talk a good game about the level tax playing field….and yet they flatly refuse to give the ref the extra linesmen and cameras he needs to spot the fouls. This suggests, surely, that they quite like the ref’s decisions – because they keep on awarding everyone else penalties.

Footnote: nobody from the Labour side highlighted the fact that, in his dealings with multinationals, Chancellor George Osborne is effectively competing with other Western nations in order to become a tax haven by any other name. And the one intelligent question asked about Osborne & Little’s seven tax years of 0% paid in corporation tax received classic Cameron humbug about it being “exactly the sort of small business we should be encouraging”. Osborne & Little’s turnover in fiscal 2015 was £22,433,000. That’s a very broad definition of small.

Earlier at The Slog: The Six systemic problems of global monetarism

27 thoughts on “David Cameron makes good his escape through the evasion/avoidance loophole

  1. You can only get rid of tax avoidance by preventing laws being shaped and lobbied about by the rich.

    It’s simply impossible any other way: every law concerning taxation and investment is always shaped to ensure that the rich can minimise their tax liabilities without inciting societal violence. Inciting societal outrage is fine as long as it doesn’t threaten control of the Parliamentary ‘system’.

    As soon as you ‘close’ one ‘loophole’, the law drafters will have ensured that there are 15 others for the rich to exploit: that’s the way things work. Each tax dodge needs to last long enough that the rich don’t spend more on tax accountants than they would by paying their taxes and that occurs by controlling the politicians at every stage of the political process: selection as candidates for safe seats, control of media coverage (which affects promotion to senior office) etc etc.

    You won’t ever change anything when the media is controlled by tax avoiding foreign nationals with editors picked to do their bidding.

    The whole thing is just rigged from start to finish. Look at family trusts – a failsafe way of avoiding inheritance tax through generations. You can argue whether IT should exist, but if it does, then the rich should damn well pay it. The really rich never do. Especially those who had hereditary peerages, owned thousands of acres of land and see themselves as some elite species apart…….

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  2. Of course tax avoidance is a neoliberal sacred right. Then sometimes the favored ones, the leaders, become poor schmucks and are forced to pretend otherwise for a few days. Those days pass quickly however and then they can return to doing the Godly work of the sacred markets.

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  3. There isn’t much point asking Cameron anything. He is a PR man, nothing more, for the super-rich individuals who really run the Conservative Party, for the benefit of themselves and their foreign cronies.
    The Conservative Party pretends to be patriotic, honorable or prudent, while actually being the exact opposite. They certainly couldn’t care less about most British people beyond the fact they are necessary cannon fodder to be lied to at every election.
    Until people wake up to the fact that the Conservative Party is a con from top to bottom, our democracy will remain the kind of pantomime we had in parliament today – and the voters, I’m afraid, will deserve the likes of charlatans like David Cameron.

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  4. The ‘revolving door’ or as the Japanese call it the ‘ascent into heaven’ is the method of paying off the various MP’s , Tax Inspectors and Financial Regulators.
    The ‘pay off’ comes at the end of the tenure in Parliament or Public Service, so can not be seen to be a blatant bribe. Directorships in City Banks, Consultancies as tax accountants, employment opportunities for family, entrance to exclusive social events are some of the methods of bribery used
    Having served their Masters by not enforcing regulations ,by paving the way for Laws that benefit the !%, and other forelock tugging deeds, these cretins are considered to be good and faithful servants.

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  5. I know we complain about how bad the UK is, but for the first time I actually dislike living in Germany,. I’ve always appreciated the best bits of living here – the scenery is brilliant – lakes and mountains, outdoor sports, also the female scenery is also salutary, but the one thing which made it worth living here was the sense of safety. Since September 30th that has gone. We get this “igloo” near us soon with 300 migrants in it and while I feel sorry for 290 of them there will be problems with a small minority – bound to be – and this gives me the creeps. You mention this to a German and you get a blank face.

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  6. Three quick thoughts , first I find this all Panama paper’s thing very interesting , we have these papers which have been about for over a year, and are being released by a shadowy organisation called the International Coalition of Investigative Journalists (ICIJ) which has all the hallmarks of an operation by western secret services in an attempt to subvert targeted governments. We have releases against people the bankers do not like , the PM of Iceland and the UK , Putin , and very few Americans of note, all strikes me as suspicious.
    My second thought is about Cameron and how little money he actually has in the global scheme of things, there are lottery winners with more cash than him. He certainly is not doing anywhere as well as Mugabe for example who has amassed in excess of a billion or Putin with a reported two billion even Blair has struggled to amass a few million.
    My last thought , JC and labour blew it again, shades of Ed Milleways they have DC on the ropes but he lives to fight on again , I suspect they are not preparing well enough.

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  7. A Renowned Country Man of English Origin, once quoted when dealing with Parliament (Rump). ” You are scum Sir, and truly elected scum”.and this still applies to those in Parliament today. And on witnessing the opposition they are nothing more than Controlled.

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  8. Tax havens/avoidance/evasion destroys economies!

    When money is created even though often leveraged nowadays! It is created to work has a transfer of work to commodities services etc! So in neoliberal,NMT theory money must be worked through the system to pay itself back.

    Tax is one of the methods that achieves this!

    Taking money out of the system may keep inflation down! But in reality it puts more strain on the money left in the system to payback the sum created and the interest from the sum created,it can only do that if the sum created is at working to driving the economy enough to do so! Otherwise it creates a drag on one side of the equation through debt and bubbles on the other through “idle” money.(money is never idle)

    Since the money can’t be paid back through economic activity it must act as a drag on the economy,as it sucks out every ounce of value in what’s left of the monetary supply.

    The money can’t be destroyed because the economic activity isn’t there and the interest payments have to be either be swapped for (leveraged) assets or re-designed (think Greece) to pay back at a longer time,inhibiting future money creation.

    Offshoring is in itself not taking money out of the system if it is put to work like it should be!Coffee growers & other nations economies should grow and the returns should(if i put to work ii grow foreign economies) pay back the money created.
    However using tax havens to stop this process has the opposite effect.

    The world is awash with money but it is not at work has it should be,but dragging on economies because it isn’t,which is where the money for bubbles comes from,this doesn’t drive economies but stagnates them!

    The fallacy that tax havens/avoidance/evasion is the same as cash in hand,cash in hand may deny the exchequer of his fair or unfair dues but money is still doing what it was designed to do! Exchange work/commodities services in the economy & should still therefore be able to pay off it creation at some point!
    So no! it’s very much a totally different kettle fish to what we see in both size and how the money interact with the economy!
    ( but still wrong)

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  9. Jeremy
    ‘You mention this to a German and you get a blank face.’
    Wonderful isn’t it . Great engineers at home sometimes, otherwise pig truffle.

    Tom and Danbuck.
    Perfect.

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  10. The population of the UK has the government it deserves and the opposition as well! FFS why do people keep falling for this keep voting malarky! The population needs a bloody good shake…alas!

    Liked by 3 people

  11. ToE: The country has become – such that it ever was – a Swedish Open Prison.

    The mentality of the locals is so ingrowing, and yet the ladies lie naked in the sauna and on hot days at lakes. Yes it is as surreal as you think.

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  12. I do get concerned when tax avoidance is equated with tax evasion. If any of us have used a work related expense to reduce taxable income, this is tax avoidance. Tax evasion is clearly an illegal way not to pay tax on assessable income.
    We can argue whether some groups of taxpayers are more privileged than other groups when it comes to the methods that are available to them to avoid tax. That is a reasonable debate, but we need to be clear that this becomes a moral issue rather than a legal issue. Which of course leads to that hoary old chestnut: What has tax got to do with morality?

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  13. @Susan Marshall
    “NOT truly elected scum’ – they hadn’t gone to the people after the end of the civil war and were established as a temporary government until the required elections were held… But they kept voting to prolong their sitting until Cromwell ‘dissolved’ them.
    I’m sure you knew this but not everyone who comes here will. Since it’s inception there have been those who thought it was their divine right to rule. Wrong then and wrongER now !

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  14. @ Router Al: JC’s Wikipedia page states “He achieved two A-Levels with “E” grades before leaving school aged 18″

    Bill Bailey suggests that JC is like one of those plastic bags that end up in the top of a tree. No-one knows how the f*ck it got up there and no-one can be ar5ed to get it down…….

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  15. Tax avoidance is using the law to legally reduce your tax liability.

    Tax evasion is dishonestly misrepresenting your affairs in order to reduce the declared amount payable.

    This is really 101 basic tax accounting. No person has to pay more tax than the rules prescribe.

    There is nothing moral about it. if you take out an ISA or pay into a pension fund, that is tax avoidance. if you are rich enough to pay for advisors to set up an offshore trust which is legal and as a consequence pay less tax – that is acting within the law to legitimately reduce your tax bill.

    If you don’t like the laws then change them. But it is a slippery slope to suggest that laws “may apply” in “different ways” to whoever is in power or gets embarrassed in the press. “Aggressive tax avoidance” is in some senses a logical nonsense.

    There are plenty of catch all regulations in place already to mitigate the worst “technically legal but not really” tax schemes.

    Once you start changing the rules and criminalising legal actions then all bets are off. Where does it stop? Cameron (not my hero) and his family are getting criticised for perfectly sensible tax planning (ie IHT reliefs) – IMO. Why should a family pay tax needlessly to big government who will no doubt spend your money so much more wisely than you.

    I find it more than worrying that the 1% will continue to get away with things whilst the rules will be tightened against the 99%.

    The law is one of our last protections. Once you put it into play with faux issues and bad logic then you play with fire. HMRC can already take money from your bank account if THEY deem you have transgressed. In the absence of a clear set of rules, exactly how are Joe Public going to challenge this? Maybe they are not supposed to.

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  16. I don’t think Cameron’s a disappointment; I think he has been true to his character all along. A PR man with no conviction, who’ll bend and sway in the wind to keep his client happy. As far as Cameron’s client is, well it isn’t you and me; I’m sure they think he is doing a fine job. Not very good for the country, but he wasn’t put in place to serve us.
    Anyone with any free-thinking talent would way up the European Union in its current form, and run a mile.
    Not Dodgy Dave.

    We are just going down the same road as America. Put a puppet in place, to do the wealthy’s bidding.
    You would hope that an independent-minded Parliament could block the like of Cameron however, unlike a pliant and bought-off US Congress does with their hollow leaders..
    As long as the constituency parties don’t let central office take complete control over the selection of candidates, we could recover. If they lose that independence, we are back to the days of Tony B.Liar and his on-message puppets. Look where that got us.
    Perhaps the Brexit victory will prompt a brave awakening.

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  17. Harold Rosario
    some tax avoidance isn’t really tax avoidance but tax exemptions these are as i said whether fair or unfair what government decides who should pay,but far more aggressive avoidance like & the chancellor raised the amount but nowhere near enough on off-setting tax by making loses in one area to reduce the tax on more profitable ones! this should be outlawed! since it undermines SME and honest business in the sectors they target!
    marcjf
    their is no logical sense in the tax avoidance i mention above,it is destructive to economies! no their isn’t enough protection against aggressive tax avoidance! & the fallacy that the profits made are just and therefore your money! profiteering is damaging to economies,So to stop the destruction of economies it is vital that government can tax accordingly since the world economies destruction coincides with low tax high tax avoidance,it is quite obvious that false pricing aren’t being remedied which is also damaging to economies,it maybe legal ,you may think morality doesn’t come into it! but the maths just don’t add up!
    so my point is and is that unless you can price everything perfectly,tax is the best way to remedy these wrongs and history proves that denying these wrongs always lead to economic failure,tax is not a private matter,it too important to good economics to be hidden behind a iron curtain!

    My original post was more about how money creation must be worked through the system to pay itself back and how syphoning of money from the system is damaging!
    I never when has far has what happens when money is paid back but isn’t replaced because money creation stops!

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  18. minimising your tax bill is natural and most people do it. What they don’t do is grandstand about morals while hypocritically doing the opposite

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  19. Those who take public office at public expense should have transparency of their financial affairs made mandatory as a prerequisite to taking the position.

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  20. I firmly believe that tax exemption has in pensions,ISA’s and tax relief has in washing your overhauls are deliberately being called avoidance to muddy the waters of what tax avoidance really is! and making people believe that tax exemptions would also go if tax avoidance did,this is not the case in fact tax exemptions could be increased rolled out more, if it wasn’t for tax avoidance!

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