Wealth-creator™.

[aka Calum Da Jazbo]

i do not objectto the inferences you draw whiach as ever are pretty astounding readings of the matters above ...

i strongly object to the notions that low tax fosters growth in a recession, that wealth is created by a few very special people, and that austerity is necessary to reassure the bond markets etc etc and all the other neocon drivel that believes in the capitalist superman ....when what it really means is that the comfortably off inhabitants of Worthing object to paying taxes rather like Mr Romney and share his well developed antipathy to any one 'who is not one of us' and earns less than say £100, 000 pa [even that is stretching the bounds of the acceptable for the true plutocrat]

there is no illogicality nor lack of rationality in my arguments ahinton, i'd appreciate it if you would stop implying that what i assert is illogical or not thought through or in some other way irrational when all you mean is you disagree or you are just having fun playing the pedant with your non sequiturs ....

[ahinton]

i strongly object to the notions that low tax fosters growth in a recession, that wealth is created by a few very special people, and that austerity is necessary to reassure the bond markets etc

OK - well, that's clear,. so let's consider it. As I observed earlier, most people are more interested in the effects of taxation, public spending (prudent and efficient and otherwise) and national economic growth as they apply to themselves rather than how they may be perceived to affect the nation as a whole so, whilst I am not necessarily seeking to cast or assuage doubts over the perceived or actual relationships between various levels of tax and economic growth (so I don't necessarily even disagree with you on this), people's attitudes to tax and economic growth are not as strongly focused as are their attitudes to how tax levels affects them and how economic growth or decline affect them. The notion "that (economic) wealth is created by a few very special people" is a more complex issue; to suggest on the one hand that a handful of the most successful entrepreneurs are the sole wealth creators is, quite obviously, bordering on the absurd, but to assume on the other hand that most people have a hand in wealth creation (each of them on a much smaller scale) is likewise open to question and, were I to ask myself how much wealth I've created for myself or anyone else during my working life to date, the question would almost certainly have to remain unanswered. Austerity may or may not be "necessary to reassure the bond markets", but to reassure them of what, precisely? My understand of the need for austerity (and I am not implying that I agree with it in referring to it) is that it is supposedly a weapon in the war against the national deficit rather than a means to placate a particular group of people who happen to work in a specialist financial area or operation.

and all the other neocon drivel that believes in the capitalist superman ....when what it really means is that the comfortably off inhabitants of Worthing object to paying taxes rather like Mr Romney and share his well developed antipathy to any one 'who is not one of us' and earns less than say £100, 000 pa [even that is stretching the bounds of the acceptable for the true plutocrat]

I cannot comment of the good (or other) people of Worthing except to say that they don't all think identically; furthermore, most people object to paying at least some of their taxes and the one thing that is certain is that such objections are more widespread and vociferous and relate to greater proportions of individual tax takes when taxes are high than is the case when they're lower. That said, when some people find that they can pay less tax in another country and therefore decide to relocate to that country, they are doing something that is perfectly legitimate and understandable in the view of anyone other than those who think that everyone should live in the highest tax régimes (if indeed there are such people); such relocation for tax reasons is rarely a practicality for most people who have taxable incomes in the order of mere £100,000 p.a. (and I say mere" specifically in this context only!) because the costs would outweigh the benefits.

there is no illogicality nor lack of rationality in my arguments ahinton, i'd appreciate it if you would stop implying that what i assert is illogical or not thought through or in some other way irrational when all you mean is you disagree or you are just having fun playing the pedant with your non sequiturs ....

My attitude to the logic and rationality or otherwise in your arguments has nothing to do with the extent to which I might or might not agree with any or all of them but one in which I am merely seeking to point out that they are not finite and beyond question and may not always cover all bases.

The duty of tax collecting organisations' is to collect as much tax as legitimately possible and that of taxpayers is to protect their incomes and assets from as much tax as legitimately possible; what may or may not constitute - or be deemed to constitute - "legitimate" in either case is, of course, always open to debate and amendment and always will be.

[aeolium]

The duty of tax collecting organisations' is to collect as much tax as legitimately possible and that of taxpayers is to protect their incomes and assets from as much tax as legitimately possible;

Is it a "duty" of taxpayers to protect their incomes and assets from as much tax as legitimately possible? Some might think that there was a duty to contribute to the public weal which requires taxation to function properly (NHS, education, roads, railways, etc) and might dispute that it was an obligation for everyone to try to avoid paying tax as far as they could, even by using highly questionable schemes. The kind of philosophy which thinks it is a duty to avoid paying tax as far as possible has arguably contributed to the disastrous situation in places like Greece and Italy. We also have the strange phenomenon of some extremely wealthy people, like Warren Buffett, complaining that they are not being taxed sufficiently.

Still, there's no doubt that your attitude is the one that is still more prevalent.

[PhilipT]

Is it a "duty" of taxpayers to protect their incomes and assets from as much tax as legitimately possible?

Arguably, yes. Start by reading it as ".. and the taxpayers have a right to protect ..", which is both true and supported by judicial opinion; then add in the obligation taxpayers, as people, have to their personal dependents. The "duty" is to them, not to the state.

I do realise that there are people who believe that the rich have a moral obligation to provide for other people's children ahead of the obligation to provide for their own, but I am not one of them.

[aeolium]

Arguably, yes. Start by reading it as ".. and the taxpayers have a right to protect ..", which is both true and supported by judicial opinion; then add in the obligation taxpayers, as people, have to their personal dependents. The "duty" is to them, not to the state.

I do realise that there are people who believe that the rich have a moral obligation to provide for other people's children ahead of the obligation to provide for their own, but I am not one of them.

That is one possible philosophical position to take, but it does require a fairly narrow interpretation of "providing for personal dependents", as if those dependents do not live in (and depend on) a wider community in respect of their health, education, transport, security etc. Taking it to its extreme would involve retaining all income and assets as far as possible for one's personal dependents and none, or as little as possible, for the state, even though if this were practised on a widespread scale the state could become seriously denuded of funds. The resultant poor provision of public services and possible increase in crime and public disorder might actually make things worse for those personal dependents even though they had received more in assets. Hasn't this to some extent been seen in the recent experience of Greece?

[ahinton]

Is it a "duty" of taxpayers to protect their incomes and assets from as much tax as legitimately possible? Some might think that there was a duty to contribute to the public weal which requires taxation to function properly (NHS, education, roads, railways, etc) and might dispute that it was an obligation for everyone to try to avoid paying tax as far as they could, even by using highly questionable schemes

The flaw in your argument here is that it effectively obligates every taxpayer to be wealthy and have ample assets and income in order that they qualify to make ever greater contributions to the "public wealth" (whatever that may mean given that the government has no money and merely collects and distributes that of others), a possible implication being that those on very low incomes and with no taxable assets may be thought by some to be failing in their duty to contribute sufficiently to this "public wealth" because they have insufficient taxable income and assets to enable then to do so - in other words, they get away with it by the simple tax avoidance scheme of not having enough to tax! As I pointed out some time ago, that may not always be quite so risible as it at first seems; I cited the example of someone that I know who, having built an entirely passive house and purchased an electric car, can manage and indeed is managing on a much smaller income than was previously the case and therefore pays far less in taxes (what I didn't mention is that he's also relocated to France where his modest income is all taxed at a mere 5%, although taxation advantage was clearly not the reason for his relocation!).

What I was obviously referring to here was, in any case, the duty of the individual taxpayer to ensure that he/she is not being charged and paying too much tax and if, on occasion in certain cases, that involves relocation to a more favourable tax régime, what's wrong with that? If Britain had one of the more favourable tax régimes (and, as I never tire of telling people, its system would need to be simplified to bits were it ever to acquire one, for favourability of tax regimen is not all about lowering rates and raising thresholds), more people would try to come here and pay taxes here rather than they do where they are now.

The kind of philosophy which thinks it is a duty to avoid paying tax as far as possible has arguably contributed to the disastrous situation in places like Greece and Italy. We also have the strange phenomenon of some extremely wealthy people, like Warren Buffett, complaining that they are not being taxed sufficiently.

The duty to which I refer is for taxpayers to pay the correct amounts of taxes in accordance to tax laws at the time that they fall due! If Mr Buffett and others wish to contribute more than their fair shares - i.e. the correct amounts of taxes due from them - to the governments of their countries, they're at liberty to do so; the only thing that strikes me as remotely "strange" about this is that Mr Buffett is "complaining" rather than just writing the US government a fat cheque.

[aeolium]

The flaw in your argument here is that it effectively obligates every taxpayer to be wealthy and have ample assets and income in order that they qualify to make ever greater contributions to the "public wealth" (whatever that may mean given that the government has no money and merely collects and distributes that of others), a possible implication being that those on very low incomes and with no taxable assets may be thought by some to be failing in their duty to contribute sufficiently to this "public wealth" because they have insufficient taxable income and assets to enable then to do so - in other words, they get away with it by the simple tax avoidance scheme of not having enough to tax!

Not at all. I believe in a progressive tax system in which there are variable rates of income tax dependent on ability to pay - most countries have this. Most countries also have thresholds below a certain level individuals are not required to pay tax and I don't see anything unreasonable about this. That is not using a "tax avoidance scheme" - it is following the clear intentions of society as evinced through legislation. By tax avoidance I mean the sort of schemes that Jimmy Carr used to enable him to pay 1% income tax on his earnings, so that even though he was much wealthier than most people he paid a much lower proportion of his income in tax.

What I was obviously referring to here was, in any case, the duty of the individual taxpayer to ensure that he/she is not being charged and paying too much tax and if, on occasion in certain cases, that involves relocation to a more favourable tax régime, what's wrong with that?

Presumably it depends on what you think of as too much tax. Income tax rates were, both for ordinary and higher rate tax payers, considerably higher in the post war decades when there was generally higher growth (as Calum has mentioned) than in recent decades. Do you think Jimmy Carr's income tax rate of 1% on his considerable earnings is about the right rate given that he seems to have used a legal scheme to do this (at least he hasn't been prosecuted for it)? Is there a moral - irrespective of legal - obligation on individuals and corporations who benefit from all the public infrastructure that allows them to earn their wealth and enjoy the benefits of it peacefully and securely to contribute at a level that is proportionate to that benefit, as society clearly intends by the tax regime?

[ahinton]

Not at all. I believe in a progressive tax system in which there are variable rates of income tax dependent on ability to pay - most countries have this. Most countries also have thresholds below a certain level individuals are not required to pay tax and I don't see anything unreasonable about this. That is not using a "tax avoidance scheme" - it is following the clear intentions of society as evinced through legislation. By tax avoidance I mean the sort of schemes that Jimmy Carr used to enable him to pay 1% income tax on his earnings, so that even though he was much wealthier than most people he paid a much lower proportion of his income in tax.

If you believe that Mr Carr took unreasonable advantage of a legal tax avoidance scheme, that was up to him to do so just as it was up to those who concoct tax law to get it right so that such things could not happen so easily or indeed at all; the "correct" amount of tax means the correct amount according to tax laws at the time that the tax falls due. Like you, I see nothing unreasonable about those on low taxable incomes and with low values of assets paying little or no tax; my argument here is that, if one gets too hung up on this "duty to contribute", there will inevitably be some backlash arguments that those who have insufficient income and asset values to tax are somehow "avoiding" making their "dutiful" contributions and if, as in the case that I cited, it looks as though someone has deliberately contrived ways of managing on less of each and consequently escape most responsibility for paying tax, they might be regarded by some as having taken advantage of a tax avoidance scheme by the back door, as it were, by redefining what some might regard as "wealth". Those who've spent quite a lot of untaxable money on creating a low-tax, low income requirement situation have engineered their exemption from contributing just as effectively as those with loadsamoney who've done so by using far more sophisticated tax avoidance instruments with the help of their tax lawyers and accountants.

Presumably it depends on what you think of as too much tax.

No, it doesn't - or at least it doesn't to anyone but me, so it's of no intrinsic general importance; the correct amounts of tax due are determined by tax law at the time, however good or bad that law might be. Tax is not about morals and moral obligations as much as it is about law alone; when people evade tax, they break tax law and should be duly punished for doing so, just as any other criminal should be.

Income tax rates were, both for ordinary and higher rate tax payers, considerably higher in the post war decades when there was generally higher growth (as Calum has mentioned) than in recent decades. Do you think Jimmy Carr's income tax rate of 1% on his considerable earnings is about the right rate given that he seems to have used a legal scheme to do this (at least he hasn't been prosecuted for it)? Is there a moral - irrespective of legal - obligation on individuals and corporations who benefit from all the public infrastructure that allows them to earn their wealth and enjoy the benefits of it peacefully and securely to contribute at a level that is proportionate to that benefit, as society clearly intends by the tax regime?

I don;t know enough about the Carr case but such as I do know - or at least think that I know - suggests to me that the law is at fault in permitting him to do what he did. As I said, tax isn't about morals but about law; taxes are determined by governments whose business it is to make laws - that's what their electorates put them there to do. I accept that tax rates in the past were higher than they are now and I think that they were quite absurd, because even if the argument could be put forward that they enable higher growth than lower ones would have done, there's scant evidence that the taxpayers benefited from such growth and, after all, they're the ones who do the making and/or breaking, as indeed should be the case. Taxes are for the benefit of citizens; if they're so high that the benefits offered to those who pay them are disproportionately low compared to what those taxpaying citizens are obliged to pay to achieve them, then they do not benefit the taxpaying citizen other than on an on-paper basis that might seek to argue that the nation has wonderful state-subsidised facilities which the majority of over-punished taxpayers
no longer have the energy or motivation to use, even if they wanted to do so.

There's so much resentment these days about lawyers and the amounts that they make, yet taxes are all about laws as they are enshrined in laws and, when tax transgressions occur (as may be deemed to be the case in instances such as the Carr one that you cite), it immediately becomes open house for (mostly expensive) lawyers to try to deal with it.

[aka Calum Da Jazbo]

nah it is just not that complicated ..... see what Lord Fink makes of it all ....

[aeolium]

If you believe that Mr Carr took unreasonable advantage of a legal tax avoidance scheme, that was up to him to do so just as it was up to those who concoct tax law to get it right so that such things could not happen so easily or indeed at all; the "correct" amount of tax means the correct amount according to tax laws at the time that the tax falls due.

The strange thing is that Mr Carr himself seems to believe he was wrong in what he did and has apologised for it (or perhaps it was just the getting caught doing it that he was apologising for), though according to your view he has nothing to feel guilty about for he was only doing what every taxpayer ought to do, minimising his tax liability. It's possible that what he felt guilty about was the appearance of a very wealthy person paying very little of his income in tax while many much poorer people are paying tax at 20%, simply because he could afford the expensive accountants that could advise him on how to do this, but I don't know.

Tax is not about morals and moral obligations as much as it is about law alone; when people evade tax, they break tax law and should be duly punished for doing so, just as any other criminal should be.

I differ with you fundamentally here - it is not just about law. It will always be possible for wealthy individuals and corporations to outwit legislators and law enforcement agencies when it comes to minimising tax liability, as the Carr case shows (and the many examples of people who are clearly public sector employees reducing their tax liability by having their income paid to private companies which they have set up). The government is planning to bring in a general anti-tax avoidance principle to tackle the most egregious of the schemes which some individuals and companies use, but it's unlikely that it will have a significant effect. Legislators are never that enthusiastic about clamping down on tax avoidance because a) many of them are rich themselves b) their parties are funded by rich individuals and companies they do not want to offend and c) it is so much easier to go after benefit claimants who are a captive and dependent group.

But the moral question is: should individuals and corporations contribute in the way society intends to the funding of all the services that help the stable functioning of that society (which actually enables them to accumulate the wealth that they do) or should they do everything possible to reduce that contribution, to nothing if that is possible. The widespread support for the second approach in places like Greece and parts of Italy has led in part to an impoverishment of the whole society, which also affects those individuals and companies which have practised it. It is irrelevant to me whether Carr's income tax payments were legal or whether Barclays' tax-avoidance schemes were legal: the attitude is effectively on a par with the Greek one, that those who pay their full taxes are suckers - let's take as much as we can from society and give as little back. I think that's a bad and destructive attitude.

[aka Calum Da Jazbo]

Wealth-creator™ Type retarded by Metropolitan PC in pursuit of High Value etc ...

[Pabmusic]

Wealth-creator™ Type retarded by Metropolitan PC in pursuit of High Value etc ...

"The Conservative MP denied claims in the Sun that he had sworn and called the officers 'plebs'." Quite right. "Churls" was the word.

[PhilipT]

Is there a moral - irrespective of legal - obligation on individuals and corporations who benefit from all the public infrastructure that allows them to earn their wealth and enjoy the benefits of it peacefully and securely to contribute at a level that is proportionate to that benefit, as society clearly intends by the tax regime?

I think you are confusing not two, but three separate moral issues. Is there a moral obligation on individuals .. to contribute .. to society? Yes, unquestionably. This would be true even in the absence of taxation, or even in the absence of society's agent, the state. But (absent other considerations) individuals etc. are free to choose how and when and where to make that contribution. Is there a moral obligation to obey the law? Well, yes, but that is an obligation that may be overridden by a higher one - I'm sure we can both think of many instances. Is there a moral obligation to pay an amount of tax that isn't what the tax law demands but is instead some other amount that is commensurate with the benefit received? I don't think so, not at all. Apart from anything else, many rich people get very little benefit from the state. They don't send their children to state schools, use the NHS or subsidised public transport, etc. etc. The tax law is largely framed around ability to pay, not benefits received, and rightly so. The moral obligation is rather on those framing the law to get it right.

[vinteuil]

Some contributors here seem to wish to emulate the egregious Leona Helmsley - "We don't pay taxes. Only the little people pay taxes... "

[amateur51]

"The Conservative MP denied claims in the Sun that he had sworn and called the officers 'plebs'." Quite right. "Churls" was the word.