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#taxjustice

November 25, 2013

I was in the wrong place this morning, at the conference on Tax Justice: Are You Serious? organised by various NGOs.  It was interesting, but it was clearly a campaigning event and I’m not signing up to the campaign, not just yet.  Not because I don’t believe they’re right to seek tax justice, but because I’m not quite sure there’s any clarity there about what we mean by “tax justice”.  (A particular low point was the vehement person arguing from the floor that organisations should campaign for people to refrain from using ISAs in the same way environmentalists campaign to get people to change their personal use of resources.  Just, no, sorry – as, to be fair, the speakers quickly clarified.)

My interest in the campaign is in the interface between fairness and expertise – as the tax tweeters immediately identified when the conference was first mooted “there’s no-one on the panel who knows anything about tax”.  Richard Murphy, Richard Brooks and Prem Sikka presumably being considered not to know anything about tax because they disagree with the argument that labels Margaret Hodge a “tax prat”.

I have three suggestions for how the campaign could be taken forward, though.

1. Use the mechanisms that already exist.  The government puts its tax legislation out for consultation.  Answer them!  I do – but what would happen if a hundred thousand people did?

2. Use the opportunities that already exist.  The government asks for ideas for the Budget (the Treasury confirmed in an email to me on 21st November that

A call for suggestions for Budget 2014 will be published [on gov.uk] early in 2014, once the Chancellor has announced the date for the Budget.

Cohere around a few simple talking points and put them in as Budget Suggestions, and encourage members of membership organisations to put them in separately too.  (Happy to help if people want ideas about WHAT to suggest!)

3. Use the regulations that already exist.  The government gave a public undertaking (in a written ministerial statement) to publish TIINs with tax legislation.  The statement said that

These notes set out what the policy change is, why the Government are proposing the change and a summary of the impacts of the change.

So let’s take a look at a few – like the ones for the abolition of CFCs, and for the introduction of the Patent Box - and, oh look!  They say the policy will be subject to review.

Has anyone seen a review yet?  FoI, anyone?

Just a thought!

3 comments

  1. Checking for promised reviews is a good idea, but it might be a bit early to FOI those two (CFC changes having come in last year; corporate tax returns showing the effect will have only just started to come in. Patent box introduced this year, corporate tax returns with substantive effects won’t be in for another year).


    • However neither TIIN identifies any benefits in the cost/benefit analysis. It’s not too soon to review whether there have been any benefits from tax competitiveness, surely?


  2. “Richard Murphy, Richard Brooks and Prem Sikka presumably being considered not to know anything about tax because they disagree with the argument that labels Margaret Hodge a “tax prat”.”

    I wouldn’t go so far as to say that Murphy, Brooks, and Sikka don’t know anything about ta, but I would go so far as to say that anything they say about tax should be heavily discounted.

    This is for a couple of reasons. One is that they seem to be nowhere near as familiar with tax as they’d like to think they are. They make a lot of fairly basic mistakes, which undermines my confidence in other things they say. Either they genuinely don’t know what they’re talking about, or else they do know perfectly well but are misrepresenting things. Neither endears them to me.

    They also come with very strong views which colour their perceptions beyond a reasonable level – to distortion, or tunnel-vision. I don’t mean just thinking that taxes should be more progressive, or that corporation tax should be higher, which are just different opinions to mine; what I mean is a solid prejudice that all companies are avoiding tax, nothing is done for non-tax reasons, UK tax is the only one that matters, and so on. For example, Murphy has complained that Amazon makes sales in the UK and so should be taxed here even though R&D etc are in the US, and Rolls-Royce should be taxed here because although the sales are largely overseas the R&D etc are in the UK. They form conclusions first and then selectively argue towards them: evidence against is dismissed as irrelevant, and assertions in favour are self-evident and need no support. They are not arguing in the “debating” sense, normally they can only manage the “shouting loudly” sense. This makes them good for an evangelical rally, but not for a conference or debate.

    Another problem is that they only argue against things, and very rarely for replacements. Typically they will complain that not enough tax is being paid in a situation without specifying what should be paid instead. Unitary tax is at present a vague pipe-dream: I’ve been trying to examine the consequences, but I can’t get to the stage of modelling anything as the list of unknowns is too long. All we get is assertions transfer pricing cannot work and that UT would be a panacea, but we don’t even get much of a description of the effects of the cure – never mind a recipe. As you say, there’s no coherence about what is wanted.

    Overall, what I find is that it’s very hard to make any progress based on assertions that things are wrong, based on inaccurate perception rather than evidence, with no concrete proposals for change.



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