I haven’t a clue why, but it seems George Osborne the Chancellor is shocked at the lengths that the “rich” will go to to avoid paying tax. I mean if that’s the case, then he really shouldn’t be Chancellor at all as he’s clearly not up to the job.
The chancellor has said he is “shocked” that some of the UK’s richest people have organised their finances so that they pay virtually no income tax.
George Osborne told the Daily Telegraph the very wealthiest should be paying around a third of their income in tax.
He said he had seen “anonymised copies” of tax returns which showed him that some of the highest earners paid an income tax rate averaging at just 10%.
He said he would take “further action” but did not outline any new proposals.
HM Revenue and Customs provided the chancellor with the confidential tax returns submitted to the organisation by the UK’s wealthiest people, the Telegraph reported. Legal loopholes
He was not given the details of the individuals involved, but he said the returns he had seen had shown him the 20 biggest tax avoiders had legally reduced their income tax bills by a total of £145m in a year.
The clue as to why he shouldn’t be shocked is in the emboldened word “legally” this is the bit that people screaming out at so called tax dodgers fail to get, avoidance is not a crime, evasion is. Yes I know there are many who think that avoidance is not complying with the so called spirit of the law, though I suspect said laws were actually written to provide said loopholes for the reasons people use them otherwise they’d be closed. Still when the government through various means tries to take away over half your income if you don’t take steps to legally reduce what they can get their grubby hands on I’d be willing to bet that in the same position we’d all do what the “rich” have done. I wish there were some way to reduce the amount of money the government shakes me down for and I’m not what anyone would call rich, I just cannot afford to employ an accountant to make sure what I did was legal.
The governments levels of taxation are also the reason that the cash in hand black market is flourishing too, their current plans to levy a green surcharge to any home improvements will no doubt exacerbate the situation as people will seek to avoid involving the authorities by getting the work they want done by some guy who for all they are a professional, will only deal in cash but wont ask too many questions. At least the lucky ones will, there are far too many tales about cowboy builders etc to make me entirely comfortable about the end result of excessive taxation, but I do know it will happen. And it’s inevitably the end result of excessive taxation when people move from the legal to the supposed illegal.
One of the things that experts in the past have noticed though is that for all people don’t particularly like paying taxation, they will tolerate what they consider to be a fair level of taxation, the laffer curve theory would seem to indicate this after all with government income actually dropping if taxation goes too high as people seek alternative means of doing business.
This governments obsession with squeezing blood out of a stone will eventually be its and its successors undoing, instead of cutting taxation and the state and giving a perceived value for money they continue to borrow and waste billions on maintaining the size of the state and its spending.
Eventually something will break, with a bit of luck it will be their necks in a long drop.