Wednesday, March 18, 2009

How To Undermine Tax Havens ...

A week ago Polly Toynbee was saying “It now looks as if closing tax havens will be the G20's key success. Obama campaigned on the Stop Tax Havens Act now in Congress. Nicolas Sarkozy and Angela Merkel want Switzerland added to the blacklist, along with the 30 to 40 others……”
But why are tax havens such an issue here; obvious 'innit' , too much tax. According to the OECD in 2006 Britain ranked ninth in the industrial world in terms of the size of overall tax burden, taking 37.4% of GDP in tax. Germany, Canada, Switzerland and the USA all take substantially less. Only the very high tax economies mainly of Scandinavia together with France and Italy take more.( Factor in house prices and we are virtually state slaves by international standards ). In terms of complexity we are world beaters further encourages sophisticated tax avoidance
Tax avoidance is the Guardian public Sector parasites version of “Scab” but while officially HMRC condemns tax avoidance, it deals …... As a result there is hardly a single corporation of any size, including state corporations, which does not employ tax avoidance methods . In addition to creating tax havens the sheer cost of this self defeating endevour is eye watering
Administering personal tax credits costs at least 20% of the funds involved- The global cost of tax collection including indirectly from the employment of accountants and tax advisers/avoiders could be as much as 30% of the tax take - about £100 billion
You will never stop tax avoidance when it is such a richly tempting activity. Lower and simpler taxes would solve a great deal and staunch the bleed of waste .I doubt the bloated pontificators at the pointless G20 Photo op will be talking about that much though.

Hat Tip Cicero Songs .


Mark Wadsworth said...

The best response to tax havens is, as you say, lower and simpler taxes, but also shifting away from taxing turnover, employment and profits and moving towards taxing land values (and similar stuff, like airport landing slots, radio spectrum, pub licences).

You can't take those off shore, can you?

Newmania said...

taxing land values

I have always been suspicious of that because Lib Dems like it can you point me in the dircetion of some explanation ?

Mark Wadsworth said...

N, I've got a section on my 'blog for "LVT supporters" ranging from left-wing to right-wing, take your pick. Start with Wiki for the neutral view.

Auntie Flo' said...

Is Brown going to do away with tax scams such as the one he's using to reduce his IHT liablity by giving Sarah one of his spare, £600K homes?

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