Nov 2010 - A fair tax system - that's rich!

01 June 2013

I HAVEN’T got any particular grudge against paying taxes - so long as I’m convinced it’s a fair system. I think most people feel the same. It’s a sociable thing to do, clubbing together to pay for things we need jointly, like health, education and security. It’s all very logical and reasonable - so long as we all pay according to how rich we are.

Evidence recently has shown, however, that some of us don’t pay our way. And who is that exactly? It’s the very people who can most easily afford it – the very rich.

Figures produced for our civil service colleagues in PCS by the Tax Justice Network show that £25 billion is lost annually in tax avoidance - and a further £70 billion in tax evasion by large companies and wealthy individuals. They also suggest that another £26 billion is going uncollected. And before anyone cries ‘More union propaganda!’, a leaked Treasury document in 2006 estimated the ‘tax gap’ at between £97 and £150 billion.

Surely it makes more economic sense to hound the rich leeches who avoid tax than to harass the few poor people who claim excess benefits? I don’t defend benefit cheats, but the amount they get away with pales into insignificance compared with the avoidance antics of the rich – and yet much more effort goes into catching the poor than the rich, despite the fact that benefit fraud makes up only about 1% of the total lost.

 

The logic would be to recruit additional tax gathering jobs and outlaw dubious 'tax havens'. So why won’t the government do this, even when PCS estimates that each Tax Compliance officer brings in over £658,000 in revenue every year?

With a more vigorous approach to ensuring the rich pay their taxes, the need for public spending cuts would vanish and the entire £160 billion UK deficit could be cleared in a few years. So what’s the problem? Is it anything to do with the fact that the rich are the Tory’s friends – and backers?

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