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Paradise Papers are a distraction Watch

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    The leaking of an estimated 13 million papers documenting the ways in which wealthy individuals legally avoid paying their taxes has, like the Panama Papers before it and other such revelations, caused a considerable degree of frustration. The frustration however is being directed at the wrong culprit. Rich people and corporations are not at fault for exploiting legal loopholes which exist in the system to protect their money, they are behaving naturally, the government is at fault for overseeing a mind-bogglingly complicated tax code in which legal loopholes become an inevitability.

    Our tax code is over 17,000 pages long. That is longer than Leo Tolstoy's War and Peace, which stands at 1,225 pages. Can anybody reasonably expect such a complicated and bureaucratic taxation system to be free of loopholes? Such a lengthy tax code is not necessary to sustain a modern thriving economy either. Hong Kong's tax code is just 276 pages, admirably efficient and free of allegations of tax avoidance.

    If people are serious about cracking down on tax avoidance, attacking poor islands for having lax tax laws and demonising the people who abuse them will not be enough. We as a nation need to comprehensively reform our tax code to make it simple, easy and free of loopholes.
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    I think you've got it the wrong way round.

    The tax code is large because rich people want loopholes and the government needs to hide these loopholes.

    It's highly likely that all the major nations in the global economy have large and complicated tax codes for this precise reason.

    The Hong Kong example is inadequate. Compare the UK with the US or Germany etc etc. Hong Kong is a little place which has a specific purpose in the global economy.
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    (Original post by saayagain)
    I think you've got it the wrong way round.

    The tax code is large because rich people want loopholes and the government needs to hide these loopholes.

    It's highly likely that all the major nations in the global economy have large and complicated tax codes for this precise reason.

    The Hong Kong example is inadequate. Compare the UK with the US or Germany etc etc. Hong Kong is a little place which has a specific purpose in the global economy.
    Err no.

    Once upon a time the tax code was a lot smaller and as they close this or that hole with legislation it gets bigger and bigger and very clever people drive a coach and horses through it.

    It’s well meaning but they never want to rock the boat with such a huge change and it’s a large undertaking to re write it.

    It’s one of those things that should be done but is always put off due to the amount of time it takes
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    (Original post by paul514)
    Err no.

    Once upon a time the tax code was a lot smaller and as they close this or that hole with legislation it gets bigger and bigger and very clever people drive a coach and horses through it.

    It’s well meaning but they never want to rock the boat with such a huge change and it’s a large undertaking to re write it.

    It’s one of those things that should be done but is always put off due to the amount of time it takes
    I'm always wrong in your eyes eh... :/

    The loopholes are written into the legislation. They are not holes in the legislation.

    Simplification of the tax code will make it easier to dodge tax and see legislation which allows people to avoid tax.
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    (Original post by saayagain)
    I'm always wrong in your eyes eh... :/

    The loopholes are written into the legislation. They are not holes in the legislation.

    Simplification of the tax code will make it easier to dodge tax and see legislation which allows people to avoid tax.
    Well I’ve never seen you say anything correct, that’s not my fault...
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    (Original post by paul514)
    Well I’ve never seen you say anything correct, that’s not my fault...
    Just because I shot down your ridiculous 0% house price inflation policy.

    Petty
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    (Original post by saayagain)
    Just because I shot down your ridiculous 0% house price inflation policy.

    Petty
    You didn’t do that either.
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    Banter.:cool:
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    The issue isnt the loopholes (agree they should be closed) the issue that we have companies that specifically work to exploit the loopholes (immorally) and the people in power have no motive to close them since they too benefit.
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    (Original post by That Bearded Man)
    The issue isnt the loopholes (agree they should be closed) the issue that we have companies that specifically work to exploit the loopholes (immorally) and the people in power have no motive to close them since they too benefit.
    Nope, the issue is our tax code is so complex it is filled with holes.

    Tax is an issue of law not morality first.
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    (Original post by paul514)
    Nope, the issue is our tax code is so complex it is filled with holes.

    Tax is an issue of law not morality first.
    No, tax is a moral issue, hence why it became law. Why does what is legal matter more than what is moral? If we start making more crime legal does it suddenly become acceptable?
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    (Original post by paul514)

    It’s well meaning but they never want to rock the boat with such a huge change and it’s a large undertaking to re write it.
    I'm surprised you wrote that. I though rocking the boat and rewriting things from scratch were good things in your book! :-)
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    (Original post by That Bearded Man)
    No, tax is a moral issue, hence why it became law. Why does what is legal matter more than what is moral? If we start making more crime legal does it suddenly become acceptable?
    You’re making my point for me morals do make laws which is why this is an issue about changing the law for people who complain about it, not having a witch hunt of people and corporations paying their legal tax.
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    (Original post by ByEeek)
    I'm surprised you wrote that. I though rocking the boat and rewriting things from scratch were good things in your book! :-)
    I am in favour of re writing it, amending continually is what got us in this mess.

    I was just saying why they don’t.

    It’s an easy hit to say look how good we are we changed a few rules and collected 160 billion more in tax over the last 7 years, which the coalition and this government has. What they fail to mention in the same breath by doing such things they open up even more holes.
    So they collect extra tax from that loophole and then lose tax in ways they weren’t before.
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    (Original post by That Bearded Man)
    No, tax is a moral issue, hence why it became law. Why does what is legal matter more than what is moral? If we start making more crime legal does it suddenly become acceptable?
    "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

    Lord Clyde
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    (Original post by paul514)
    You’re making my point for me morals do make laws which is why this is an issue about changing the law for people who complain about it, not having a witch hunt of people and corporations paying their legal tax.
    Which only applies if people have the morals to implement them, which is unlikely since so many benefits from these kind of schemes. The way to change this is to make it an issue that will elect MPs, which also won't happen if people like you don't consider it a big deal.

    Rewriting the tax code generally means stripping it back and lowering it. The people who would rewrite this are going to be more likely to have a personal stake in the changes, rather than be independent.

    Allowing these loopholes means local businesses can't compete with multinational tax dodgers, this is the reality. We should stand tall against the businesses who oppose the measures to tackle avoidance. Under the current government there is little motivation to collect the tax back, and this isn't helped by people who are apathetic towards it.

    Again, morality and legality do not overlap, but these should dictate laws, in the absence of government changing them, we should still call out the immorality of avoiding them.
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    (Original post by That Bearded Man)
    Which only applies if people have the morals to implement them, which is unlikely since so many benefits from these kind of schemes. The way to change this is to make it an issue that will elect MPs, which also won't happen if people like you don't consider it a big deal.

    Rewriting the tax code generally means stripping it back and lowering it. The people who would rewrite this are going to be more likely to have a personal stake in the changes, rather than be independent.

    Allowing these loopholes means local businesses can't compete with multinational tax dodgers, this is the reality. We should stand tall against the businesses who oppose the measures to tackle avoidance. Under the current government there is little motivation to collect the tax back, and this isn't helped by people who are apathetic towards it.

    Again, morality and legality do not overlap, but these should dictate laws, in the absence of government changing them, we should still call out the immorality of avoiding them.
    Well good luck with that, you’re joining the ranks of the people who have been gabbing about this for decades to no avail rather than campaigning directly on changing the law.

    In short it’s virtue signalling
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    (Original post by nulli tertius)
    "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

    Lord Clyde
    And that's wrong because it's easy to take it from the lower/middle classes while HMRC lacks the resources to track down accounts in the Cayman Islands guarded by various law firms. It's great if you're rich or a libertarian, just another way to shaft the poor.
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    (Original post by paul514)
    I am in favour of re writing it, amending continually is what got us in this mess.

    I was just saying why they don’t.

    It’s an easy hit to say look how good we are we changed a few rules and collected 160 billion more in tax over the last 7 years, which the coalition and this government has. What they fail to mention in the same breath by doing such things they open up even more holes.
    So they collect extra tax from that loophole and then lose tax in ways they weren’t before.
    I hear what you are saying, but the law of unintended consequences is always unleashed when you rewrite something. Many a top 20 world software company went out of business because some loon thought it would be a good idea to launch version 4 of their software as a rewrite. Think Netscape and Lotus Notes and whole divisions of IBM have all gone under because someone thought it would be a good time to start from scratch. In their time, they were giants. Now they no longer exist. If we started tax law from scratch the amount the government took would plummet and the number of loop holes would be gigantic.

    Starting from scratch always seems like a good idea, but neglects the fact that the hundreds of years of tweaks and improvements that have been made to improve things. Our current tax law is not perfect but it is pretty good. The sort of tax fiddles going on right now have only really been around en-mass for the last few years and are a result of increased globalisation. Our tax law simply needs tweaking to keep up. That said, it isn't a UK problem. It is a world problem in a global market place.
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    (Original post by That Bearded Man)
    And that's wrong because it's easy to take it from the lower/middle classes while HMRC lacks the resources to track down accounts in the Cayman Islands guarded by various law firms. It's great if you're rich or a libertarian, just another way to shaft the poor.
    But that isn't HMRC's view of the tax gap.

    https://www.gov.uk/government/upload...-gaps-2017.pdf

    It sees small businesses in terms of the black economy, negligence and error as well as fraud as being responsible for almost half the tax loss and by far the most risky tax is VAT. Tax avoidance is well down the list of problems.
 
 
 
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