Who else thinks tax avoidance should be made illegal?
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Who else thinks tax avoidance should be made illegal?Isn't it about time they made tax avoidance illegal? What are they waiting for why don't they just do it?
'Tax avoidance
We strictly oppose tax avoidance, the government has refused to make any efforts to close these loopholes and we find this a disgrace. Recently in real life the government has decided to make Jimmy Carr a scapegoat whilst conveniently ignoring their 600m tax waver they made to Vodafone. Lord Ashcroft himself who provided the financial muscle for the Conservative Party campaign was a major tax avoider, which David Cameron remained mysteriously silent about.'
This is an extract from the new TSR Green party's opening statement. Get involved in the debate by joining the party.
http://www.thestudentroom.co.uk/show...4#post38257904
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Re: Who else thinks tax avoidance should be made illegal?Some of you may be interested in the work of Richard Murphy, a chartered accountant, who blogs at http://www.taxresearch.org.uk/Blog/ - he's been going after this issue for quite some time.
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Re: Who else thinks tax avoidance should be made illegal?The moment it becomes illegal it's evation not avoidance so tax avoidance cannot be illegal.
What do you class as tax avoidance? Using an ISA is avoiding tax. Putting some of your income in a pension is avoiding tax. Buying buiscets instead of cakes is avoiding tax. -
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Re: Who else thinks tax avoidance should be made illegal?Surely tax avoidance is just exploiting loopholes? You can't make that illegal. Only thing you can do is close the loopholes but the accountants rich people hire tend to be better than their state hired counterparts.
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Re: Who else thinks tax avoidance should be made illegal?I prefer the term "tax resistance", and no, tax avoidance should not be made illegal since there are an infinite number of things that could be classed as tax avoidance. For example, ever chosen Jaffa Cakes over cookies? Well, your guilty of avoiding the higher rate of tax on things that are classed as biscuits as opposed to cakes. Secondly, it doesn't always hold true that a higher rate of tax leads to a higher rate of revenue. Finally, why exactly do we want to give the government more money again? This is an organisation which mercilessly kills innocent children.
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Re: Who else thinks tax avoidance should be made illegal?As others have said, tax avoidance is by nature legal, that's what the term means, so if you were to close the loopholes currently active then exploiting them would no longer be tax avoidance, it would be tax evasion, which is illegal.
So I guess what you're asking is whether the loopholes being exploited in the schemes unearthed by the Times investigation should be made illegal. Unfortunately, it's not as simple as that. If it were then yes, I would definitely support them being made illegal, but the fact of the matter is that there will always be loopholes (and therefore tax avoidance) in any tax legislation. It's simply too vast an area of law that covers too many bases for it to be watertight.
I can't remember the exact details of the K2 scheme that Carr was involved with but I seem to remember it involved filtering his (and others') earnings through multiple revenue streams and through several different 'dummy' companies to be distributed, in large part, as dividends. This creates tax 'efficiencies' as most kinds of revenue streams will have a minimum tax band: for example you could earn up to £10,000 through a specific revenue stream (say investment income, although this is just a hypothetical example, not the actual rule) and then up to £10,000 before tax in another (say capital gains). So if you're hiring expensive enough accountants they can divide your earnings through all these different streams and you end up with an incredibly low tax liability.
Laws like these are necessary for a number of reasons, chief among which is to encourage entrepeneurs which is why dividends are such a popular method of tax avoidance as there are lots of different kinds of tax relief available with them to encourage people to invest in new business and generally stimulate the economy. Unfortunately if people are rich enough they can set up what are essentially fake companies and funnel their earnings through them in the form of dividends.
So basically it is very hard to completely eliminate exploitative levels of tax avoidance. To say that a minimum tax rate should be introduced is well and good but a minimum tax rate on what? Salary? Gains? Investments? Shares? Inheritance? Benefits? All of it? What rate should this tax rate be? How do you ensure that it doesn't affect the wrong people? It's not really that simple sadly. There is also a school of thought, which I don't really subscribe to, that would worry whether such a law would encourage more people to become tax exiles - i.e. it's better to be getting 1% of £1 billion than 10% of £50 million. But that's a completely different debate.
Put simply, tax is complicated. Loopholes, and therefore tax avoidance, will always exist. But yes, you would imagine they could do something to tighten up current laws. -
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Re: Who else thinks tax avoidance should be made illegal?See your other thread in International please.(Original post by internetguru)
Isn't it about time they made tax avoidance illegal? What are they waiting for why don't they just do it?
'Tax avoidance
We strictly oppose tax avoidance, the government has refused to make any efforts to close these loopholes and we find this a disgrace. Recently in real life the government has decided to make Jimmy Carr a scapegoat whilst conveniently ignoring their 600m tax waver they made to Vodafone. Lord Ashcroft himself who provided the financial muscle for the Conservative Party campaign was a major tax avoider, which David Cameron remained mysteriously silent about.'
This is an extract from the new TSR Green party's opening statement. Get involved in the debate by joining the party.
http://www.thestudentroom.co.uk/show...4#post38257904
The model house of commons is the hub of debate on TSR so if you like debating get involved.
i think it should btw.
