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The future of Government (if any)

...on serious topics that don't fit anywhere else at present.
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Dave B
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Re: The future of Government (if any)

#41 Postby Dave B » October 13th, 2012, 9:44 am

Latest post of the previous page:

Woody Duck wrote:Government is and always has been no different in reality to the group of barons in 1215 who held King John to task and created the magna carter to safeguard their own privilege and property. Right now in this government the similarities are striking.
And that charter was ignored, broken, revised, weakened etc. by the monarchy for the next couple of hundred years.
"Look forward; yesterday was a lesson, if you did not learn from it you wasted it."
Me, 2015

Woody Duck
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Re: The future of Government (if any)

#42 Postby Woody Duck » October 15th, 2012, 10:54 am

Dave B wrote:
Woody Duck wrote:Government is and always has been no different in reality to the group of barons in 1215 who held King John to task and created the magna carter to safeguard their own privilege and property. Right now in this government the similarities are striking.
And that charter was ignored, broken, revised, weakened etc. by the monarchy for the next couple of hundred years.


and more. Was it Thatcher who said that there was no such thing as a British Constitution?
A man with a ukulele is a man with nothing to prove.

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Alan H
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Re: The future of Government (if any)

#43 Postby Alan H » October 16th, 2012, 5:38 pm

Interesting srticle in The New Statesman:
The 1% should recognise a big fortune is usually built on good fortune

Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that, says Alex Andreou.

“The rich already pay their fair share,” said millionaire David Cameron in response to millionaire Andrew Marr.

This is a sentiment echoed by a number of Conservatives in the last few days. In support, they present figures which show that the top 1 per cent contributes a higher percentage to the total tax take than others. But what struck me was how all commentators persisted in only using percentages.

What about actual figures? Let’s talk numbers.

I will be extremely generous. I will make the assumption that we live in a world where a talented, expensive accountant cannot create a dozen shell companies in exotic places to hide income. I will make the assumption that this top 1 per cent declares every penny it makes and pays full tax on it.

I will accept every assumption made by John Redwood MP – the self-appointed chartered accountant of this Borg collective. I will use 2009-2010 confirmed HMRC figures to avoid charges of manipulation or error.

The total number of taxpayers in the UK is just shy of 30 million. The top 1 per cent is, therefore, 300,000 people. Total income declared across the UK was £870bn. Of that, £121bn was made by the top 1 per cent. The total income tax received was £145bn, of which £40.5bn was contributed by this top-earning 300,000 people. This yields an effective average personal tax rate of 33.5 per cent.

This leaves the top 1 per cent with an average annual personal income, after tax, of £268,000. Over a quarter of a million, on average, each year. It might be “chicken feed” to Boris Johnson, but it is a lot of money to most of us.

Let’s look at a smaller slice, still – the six thousand people in the UK who have a personal income of a million or more. After all personal tax deductions, they are left with over £600,000 a year. It would take a UK person on the median income over 30 years to make what the lowliest of these six thousand people make in a year. A whole working life.

The additional insidious suggestion by David Cameron, the cause of much mirth at Tory Conference, was that by choosing to tax this top slice less he was not gifting them a tax-break, because “when people earn money, it’s their money”.

The implication being that this money was not made using the work of low-paid people forced to claim benefits to supplement their income; not made using the roads, airports and ports we all pay for; not made by all of us buying their goods and service; not made under the protection of the same police, fire and health services we all paid for.

No. This money magically came into existence out of the very same anatomical orifice of these “doers” and “risk-takers” out of which the sun, evidently, shines. A result of their entrepreneurship and get-up-and-go; nothing else.

Theo Paphitis is an interesting case study – held up perpetually as an example of that archetype. A few months ago, he was asked on Question Time what motivates him. He said it was the will to create things, to grow his companies, to employ people, to make his mark. Ten minutes later the panel was discussing the top rate of tax. He said that if personal tax was increased on those making more than a million, he would up and leave the UK.

So, which is it? Pick one, Theo. You cannot claim the mantle of wealth-trickling sainthood, while clinging on to every obscene penny with bony, Scrooge-like fingers, under threat of imminent departure for Barbados. You cannot claim that your wealth is the result of your hard work alone, while consistently calling it “my kids’ inheritance” on Dragon’s Den. What will they have done to deserve their share of your £170m estimated worth, when you’re no longer around?

None of us, including Cameron or Paphitis, would look at a couple in which one partner said “you’re at home raising the kids – no more hand-outs, you leech” with anything other than disgust. None of us would look at a wealthy family which refused to pay for its kids’ education or kicked out granddad when he became ill and think “bravo – tough love”. All of us admired how a community came together, took time off work, with no thought for their own self-interest, to look for a missing six-year-old.

At what point, precisely, do these qualities of selflessness, compassion and solidarity cease to be attractive? At what point do the rules change and we go from individual, couple, family or community to UK plc? Tax is simply the state’s expression of these qualities. A recognition that a big fortune is built, at least in part on good fortune, be it of birth, education, health or position.

The idea that everyone’s tax pays for a tiny percentage of benefit scroungers, is not only manifestly absurd, but damaging to the nation and destructive to one’s own morale. Isn’t it better to assume that your tax bought a wheelchair, educated a talented but disadvantaged kid, saved a diabetic, paid for a great teacher – which it does the vast majority of the time?

So, stop moaning about percentages. Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that. Count your blessings and help those who have not had such good fortune; not to the tune of whatever percentage you consider fair, but as much as you can. Do the right thing. It is the only meaningful way to “make your mark”.
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Nick
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Re: The future of Government (if any)

#44 Postby Nick » October 17th, 2012, 2:19 pm

Alan H wrote:Interesting srticle in The New Statesman:
Considering the author considers himself to know economics, I'd say this was ignorant, rather than interesting. For example on his website, it says
STURDY BEGGARS are completely non-profit-making. All proceeds go towards future productions.
What it actually means is "STURDY BEGGARS tries to make a profit on each and every one of its productions, and uses those profits as capital to inject into future productions". We also are not told how much, if at all, the actors are paid, nor the structure of the company, but any payments they receive are indeed a distribution of profits, or else they are just another am-dram group (though there's nothing wrong with that). Their tax returns would reveal all.


, as well as hard work!

Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that, says Alex Andreou.
The whole point of the tax reduction is to promote growth and jobs for the whole of society. The previous Labour government were "extremely relaxed" about it, and did not tax it for 13 years. They also promised no more boom and bust. Whatever happened to that?

What about actual figures? Let’s talk numbers.

I will be extremely generous. I will make the assumption that we live in a world where a talented, expensive accountant cannot create a dozen shell companies in exotic places to hide income.
You are not being generous, but mendacious. Hiding income is tax evasion and is illegal.

I will accept every assumption made by John Redwood MP – the self-appointed chartered accountant of this Borg collective. I will use 2009-2010 confirmed HMRC figures to avoid charges of manipulation or error.

The total number of taxpayers in the UK is just shy of 30 million. The top 1 per cent is, therefore, 300,000 people. Total income declared across the UK was £870bn. Of that, £121bn was made by the top 1 per cent. The total income tax received was £145bn, of which £40.5bn was contributed by this top-earning 300,000 people. This yields an effective average personal tax rate of 33.5 per cent.
So where is the other apparently missing 6.5%? Some of it reflects part of one's income charged at lower rates. The remainder largely represents government policy used to encourage certain actions. Eg Investment in job creating start-ups, or charitable giving. All approved or indeed created by the Labour government.

This leaves the top 1 per cent with an average annual personal income, after tax, of £268,000. Over a quarter of a million, on average, each year. It might be “chicken feed” to Boris Johnson, but it is a lot of money to most of us.
Certainly.


The additional insidious suggestion by David Cameron, the cause of much mirth at Tory Conference, was that by choosing to tax this top slice less he was not gifting them a tax-break, because “when people earn money, it’s their money”.
Quite right. It is their money. Note that Cameron did not say that they did not have an obligation to pay tax. He was responding to the menacity of Ed Miliband used outrageous spin to try to mislead the electorate. Being a millionaire himself (though he's never been in the commercial world.... ) he should be receiving his £40,000 cheque, shouldn't he? He just ducks all the journalists questions. Grrr!

The implication being that this money was not made using the work of low-paid people forced to claim benefits to supplement their income;
I would suggest to you that the vast majority do not, as this sentence implies, derive their income by effectively pinching money from other people by underpaying them. They may be fortunate, but they are not deriving their income by depriving others of theirs.

not made using the roads, airports and ports we all pay for;
Those roads also provide a livelihood to the millions of other people too. Everyone would suffer without roads. The rich are already paying a much larger proportion of the income in tax to allow the whole nation to prosper. And airports and ports are not funded by taxes, are they?

not made by all of us buying their goods and service; not made under the protection of the same police, fire and health services we all paid for.
Except that we don't all pay for them, do we? There is a sizeable proportion of people who pay no effective income tax at all. And this extends to many who earn above the national average. If the wealthy depend on the less wealthy to work for them, the less wealthy depend on entrepreneurs for their jobs. It works both ways.

No. This money magically came into existence out of the very same anatomical orifice of these “doers” and “risk-takers” out of which the sun, evidently, shines. A result of their entrepreneurship and get-up-and-go; nothing else.
If you don't have an argument, turn to pathetic and inaccurate analogy.

Theo Paphitis is an interesting case study – held up perpetually as an example of that archetype. A few months ago, he was asked on Question Time what motivates him. He said it was the will to create things, to grow his companies, to employ people, to make his mark. Ten minutes later the panel was discussing the top rate of tax. He said that if personal tax was increased on those making more than a million, he would up and leave the UK.

So, which is it? Pick one, Theo.

The fact that you can't reconcile these two factors shows how inadequate your analysis is. Go back to "shouting in the evenings" and leave economic policy to those who have some idea what they are talking about.

I don't speak for Theo, I can see exactly what he means. In common with many self-made people, he no longer needs to earn any extra money. He is (as it were) terminally wealthy: he won't ever spend all his wealth. Many such people are very generous, giving away large amounts of money. But it is altogether a different matter to create jobs and employment in a new business, only to have a disproportionate proportion taken off you.

You may be more saintly, but get a grip: we live in the real world, and your airy-fairy waffle will not raise more tax to fund public spending.

You cannot claim the mantle of wealth-trickling sainthood, while clinging on to every obscene penny with bony, Scrooge-like fingers, under threat of imminent departure for Barbados. You cannot claim that your wealth is the result of your hard work alone, while consistently calling it “my kids’ inheritance” on Dragon’s Den. What will they have done to deserve their share of your £170m estimated worth, when you’re no longer around?
If he wants to give his own money to his children, then that's up to him. He does, however, raise considerable amounts for charity. The tax collector is already going to take 40% of his money. It's not your money. Go out and make a fortune and then give it all the HM Treaury- I'll even give you the address. But nobody does. Voluntary tax paid is a few thousand a year. Where are all your altruistic socialists who have had a lucky break? They might give it away to charity (Lord Sainsbury, say) but they don't give it to the Government. Why should they? Why would they?

None of us, including Cameron or Paphitis, would look at a couple in which one partner said “you’re at home raising the kids – no more hand-outs, you leech” with anything other than disgust. None of us would look at a wealthy family which refused to pay for its kids’ education or kicked out granddad when he became ill and think “bravo – tough love”. All of us admired how a community came together, took time off work, with no thought for their own self-interest, to look for a missing six-year-old.

At what point, precisely, do these qualities of selflessness, compassion and solidarity cease to be attractive? At what point do the rules change and we go from individual, couple, family or community to UK plc? Tax is simply the state’s expression of these qualities. A recognition that a big fortune is built, at least in part on good fortune, be it of birth, education, health or position.
This just pathetic. The State does not have a personality of its own. All you are saying is that you want someone else's money spent on something you want to happen. And Theo Paphitis, like the other Dragons, did not build their fortunes because of their birth, education, health or position. If anything, they succeeded in spite of having none of those supposed advantages (except, like most of use, good health.)

The idea that everyone’s tax pays for a tiny percentage of benefit scroungers, is not only manifestly absurd, but damaging to the nation and destructive to one’s own morale. Isn’t it better to assume that your tax bought a wheelchair, educated a talented but disadvantaged kid, saved a diabetic, paid for a great teacher – which it does the vast majority of the time?
Certainly public spending is necessary, but wouldn't the best lesson to draw be that a large proportion do not buy into your socialist dream? And to think creatively how one might work with the grain, rather than against it?

So, stop moaning about percentages. Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that. Count your blessings and help those who have not had such good fortune; not to the tune of whatever percentage you consider fair, but as much as you can. Do the right thing. It is the only meaningful way to “make your mark”.
So here we have it: the socialist solution: To each according to their need, from each according to their ability. Socialism has failed the world over. To ignore his achievement in creating or maintaining thousands of jobs, by providing millions of people with the goods and services they want, besides millions of pounds for the Exchequer is myopic. The trouble with socialism, is that you soon start to run out of other people's money. Thank goodness your hands are nowhere near the levers of power.

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Re: The future of Government (if any)

#45 Postby stevenw888 » October 17th, 2012, 3:03 pm

Well said, Nick! +1
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Dave B
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Re: The future of Government (if any)

#46 Postby Dave B » October 17th, 2012, 3:27 pm

Name me any social system that has not failed in some major way. Where every law applies to every person (including all varieties of top bod), where every person has the same level of healthcare and education available to them . . .

Ain't no such beast methinks - once again, try for the best of a lousy choice. For my part that will have a bloody great pudding of stuff from both sides of the divide - just because a measure is the product of one wing or the other does not make it a bad thing. Nor necessarily a good thing of course!
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Re: The future of Government (if any)

#47 Postby animist » October 17th, 2012, 5:50 pm

Nick wrote:
So, stop moaning about percentages. Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that. Count your blessings and help those who have not had such good fortune; not to the tune of whatever percentage you consider fair, but as much as you can. Do the right thing. It is the only meaningful way to “make your mark”.
So here we have it: the socialist solution: To each according to their need, from each according to their ability. Socialism has failed the world over. To ignore his achievement in creating or maintaining thousands of jobs, by providing millions of people with the goods and services they want, besides millions of pounds for the Exchequer is myopic. The trouble with socialism, is that you soon start to run out of other people's money. Thank goodness your hands are nowhere near the levers of power.

actually, here we do not have socialism but an appeal to the better nature, if there is one, of those who take home £600K each year

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Nick
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Re: The future of Government (if any)

#48 Postby Nick » October 17th, 2012, 6:13 pm

animist wrote:actually, here we do not have socialism but an appeal to the better nature, if there is one, of those who take home £600K each year

A moments thought will show how bonkers that thought is. Why do we expect those who don't need to earn extra money for their own benefit to do so for everyone elses? Why don't you work an extra hours overtime and donate the proceeds to the Exchequer? Because, in all probability, you don't want to. Those who earn £1m+ a year tend to be in control of their own income.

It comes back to elementary income and substitution effects. A proportion of the wealthy will say sod it, I can't be bothered to generate the income, thus reducing the size of the tax-base. Let's see what happens in France, with their 75% tax.

If you were a world-class footballer, would you chose to play in the world's best league, here in the UK, or in France for less than half the money? That's the sort of equation they face.

And the fact remains that for those multi-millionaires with "a better nature", they still don't donate to government coffers, do they? They donate to charity.

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Re: The future of Government (if any)

#49 Postby animist » October 17th, 2012, 7:48 pm

Nick wrote:
animist wrote:actually, here we do not have socialism but an appeal to the better nature, if there is one, of those who take home £600K each year

A moments thought will show how bonkers that thought is. Why do we expect those who don't need to earn extra money for their own benefit to do so for everyone elses? Why don't you work an extra hours overtime and donate the proceeds to the Exchequer? Because, in all probability, you don't want to. Those who earn £1m+ a year tend to be in control of their own income.

It comes back to elementary income and substitution effects. A proportion of the wealthy will say sod it, I can't be bothered to generate the income, thus reducing the size of the tax-base. Let's see what happens in France, with their 75% tax.

If you were a world-class footballer, would you chose to play in the world's best league, here in the UK, or in France for less than half the money? That's the sort of equation they face.

And the fact remains that for those multi-millionaires with "a better nature", they still don't donate to government coffers, do they? They donate to charity.

as I understand it, socialism is a topdown political system which (you may well be right) does not have a good record of working (though I like to paraphrase Chesterton's comment about Xianity to say that socialism has not been tried and found wanting, it has been found difficult and not tried). Therefore, any appeal to individuals (like this one), whatever the merit or otherwise, is not about socialism but about voluntaristic egalitarianism which recognises that the poor have stronger marginal needs than the rich. The rich cannot take it with them when they go, so why cling onto it? I agree about its being better to donate to charity than the exchequer, though - a pity more of the super-rich do not do this to the extent that they cease to be super-rich.

Love, Bonkers

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Re: The future of Government (if any)

#50 Postby Fia » October 17th, 2012, 7:55 pm

What about actual figures? Let’s talk numbers.

I will be extremely generous. I will make the assumption that we live in a world where a talented, expensive accountant cannot create a dozen shell companies in exotic places to hide income.

Nick wrote:You are not being generous, but mendacious. Hiding income is tax evasion and is illegal.


Och, pull the other one, Nick. Tax evasion may be illegal but the line between evasion and avoidance is very grey. That's why accountants get paid so much isn't it?

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Re: The future of Government (if any)

#51 Postby Alan H » October 17th, 2012, 8:06 pm

Fia wrote:Och, pull the other one, Nick. Tax evasion may be illegal but the line between evasion and avoidance is very grey. That's why accountants get paid so much isn't it?
Another thing that galls me is the sheer waste of intellect: we have some fairly bright people (accountants) spending their time finding those loopholes and playing them to the maximum effect so their clients/bosses can move money around to their own advantage. It creates nothing in itself.
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Re: The future of Government (if any)

#52 Postby Tetenterre » October 18th, 2012, 9:45 am

I don't for one moment pretend to understand the black art that is called economics (so this is probably going to be naiive and simplistic), but can we please try to remember a couple of things:
* It is part of an accountant's ethical duty to (legally) minimise his/her client's tax liability.
* We all try to avoid tax, don't we? Is there anybody here who intentionally does not claim tax allowances, who does not fill up the tank just before getting onto the ferry to come back from France, who does not bring booze or fags back from where the VAT is lower. Would we deny small farmers the "averaging" they can use to reduce tax liability? Do we think that accountants who work for "ethical" charities and small businesses should not be fairly aggressive in trying to reduce their liabilities to teh Exchequer?

Yes, of course this is all minimal compared to some of the elaborate avoidance schemes but, as long as they are legal and as long as accountants have an ethical duty to minimise a client's liability, it's a bit daft (IMO) to whinge about it happening. The onus is on the government to close these more elaborate loopholes so that using them becomes evasion, not avoidance.
Steve

Quantum Theory: The branch of science with which people who know absolutely sod all about quantum theory can explain anything.

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Re: The future of Government (if any)

#53 Postby Dave B » October 18th, 2012, 10:40 am

Is part of the onus also on us voters to make our "whinges" so obvious and in such great volume visible to our so-called representatives in parliament?

But then, apathy and ignorance always triumph and politicians rely on this. We seem to consider it almost an English virtue to "put up with" our lot and moan. Not saying that I want a return of the Peterloo type situation, maybe something like a "distributed" action like those mounted (but overtaken by radical mobs) against capitalism in various places. Would be nice to get just 20% of the residents of every town and city marching to a common cause at the same time - that might make the authorities look up at little.

Come the revolution . . . !
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Re: The future of Government (if any)

#54 Postby Nick » October 18th, 2012, 10:57 am

animist wrote: Love, Bonkers


Nice to see you treat my criticism with such aplomb :D

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Re: The future of Government (if any)

#55 Postby animist » October 18th, 2012, 11:08 am

Tetenterre wrote:I don't for one moment pretend to understand the black art that is called economics (so this is probably going to be naiive and simplistic), but can we please try to remember a couple of things:
* It is part of an accountant's ethical duty to (legally) minimise his/her client's tax liability.
* We all try to avoid tax, don't we? Is there anybody here who intentionally does not claim tax allowances, who does not fill up the tank just before getting onto the ferry to come back from France, who does not bring booze or fags back from where the VAT is lower. Would we deny small farmers the "averaging" they can use to reduce tax liability? Do we think that accountants who work for "ethical" charities and small businesses should not be fairly aggressive in trying to reduce their liabilities to teh Exchequer?

Yes, of course this is all minimal compared to some of the elaborate avoidance schemes but, as long as they are legal and as long as accountants have an ethical duty to minimise a client's liability, it's a bit daft (IMO) to whinge about it happening. The onus is on the government to close these more elaborate loopholes so that using them becomes evasion, not avoidance.

I agree with this, and it is characteristically well expressed. Surely the primary duty of individual or firm or whatever is to obey a democratically enacted law (almost always anyway) so that tax evasion is wrong as well as dangerous. After that, it is more complicated: accountants' secondary duties are to their employers, employers' secondary duties are to stakeholders etc etc. And as TT says, it is up to government to plug loopholes, not to lecture people (as Cameron did Jimmy Carr) about using them. Having said all that, I stick with my comments about millionaires, since there are many secondary and tertiary duties as well as primary ones, it is just that they are more complicated. To illustrate my point, imagine that the UK spends inordinate amounts on stupid and obnoxious defence projects; if I am an ethical millionaire it seems to me quite justifiable to avoid contributing to this waste and instead keep my income - then get rid of it (not just a tiny bit of it) to really desperately important causes like famine relief, whether there is tax relief for this or not

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Re: The future of Government (if any)

#56 Postby Nick » October 18th, 2012, 11:17 am

Fia wrote:Och, pull the other one, Nick. Tax evasion may be illegal but the line between evasion and avoidance is very grey. That's why accountants get paid so much isn't it?

No, not really. The line is whatever the law says it is. For individuals (which is what we are talking about here), there is precious little scope beyond specific reliefs and allowances provided in law, by Parliament.

Two points to back this up. Put simply, in order to qualify as a legitimate financial transaction, there has to be a reason beyond minimising tax. If money goes from A to B via C, but the only reason for C is to try to reduce tax, then C will be ignored and the tax applied.

Secondly, accountants are required by law to register any tax planning measure with HMRC in advance of its use. HMRC are not obliged to approve it or deny its validity. They can do that retrospectively. Hmmm... Just how keen would one be to use a scheme on the edge? Incurring all the costs without knowing for sure if it will succeed? And even if it works, year 1, it is almost a stroke of the pen for HMRC to close the loop-hole in subsequent years.

The reason accountants get paid well is because, first of all, they restrict the supply of those who are able to describe themselves as Chartered Accountants by making the exams so tough. Amongst themselves, they say that the only profession with tougher exams is the actuarial profession.

The second reason is because successive governments have made the rules and regulations so complicated that specialist knowledge is required to cope with it. This is pure unnecessary cost to satisfy political vanity. The worst culprit? G. Brown. Without question.

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Re: The future of Government (if any)

#57 Postby Alan H » October 18th, 2012, 11:20 am

Tetenterre wrote:I don't for one moment pretend to understand the black art that is called economics (so this is probably going to be naiive and simplistic), but can we please try to remember a couple of things:
* It is part of an accountant's ethical duty to (legally) minimise his/her client's tax liability.
* We all try to avoid tax, don't we? Is there anybody here who intentionally does not claim tax allowances, who does not fill up the tank just before getting onto the ferry to come back from France, who does not bring booze or fags back from where the VAT is lower. Would we deny small farmers the "averaging" they can use to reduce tax liability? Do we think that accountants who work for "ethical" charities and small businesses should not be fairly aggressive in trying to reduce their liabilities to teh Exchequer?

Yes, of course this is all minimal compared to some of the elaborate avoidance schemes but, as long as they are legal and as long as accountants have an ethical duty to minimise a client's liability, it's a bit daft (IMO) to whinge about it happening. The onus is on the government to close these more elaborate loopholes so that using them becomes evasion, not avoidance.
ISTM there is a significant difference between claiming all the allowances someone is entitled to and setting up a system that buys coffee beans in a country where tax on profits is lower and then importing them here at vastly inflated profits. Now, we can't be certain why they are doing this, but it seems damned clear they have set this all up to 'hide' their profits from the UK Taxman. That seems materially different. Can these be differentiated and the first allowed and the second prevented?
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Nick
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Re: The future of Government (if any)

#58 Postby Nick » October 18th, 2012, 11:25 am

Alan H wrote:Another thing that galls me is the sheer waste of intellect: we have some fairly bright people (accountants) spending their time finding those loopholes and playing them to the maximum effect so their clients/bosses can move money around to their own advantage. It creates nothing in itself.

I have some sympathy for this view, Alan. But I'd suggest the vast proportion of any accountants time is spent coping with regulation, accountancy and tax law, not in finding apparent loop-holes.

The best way to address it is to try to simplify taxes as far as possible. At the margin, this will create small loopholes, but if it makes life simpler and cheaper for everyone, then that is something we might want to live with.

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Nick
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Re: The future of Government (if any)

#59 Postby Nick » October 18th, 2012, 11:33 am

Alan H wrote:ISTM there is a significant difference between claiming all the allowances someone is entitled to and setting up a system that buys coffee beans in a country where tax on profits is lower and then importing them here at vastly inflated profits. Now, we can't be certain why they are doing this, but it seems damned clear they have set this all up to 'hide' their profits from the UK Taxman. That seems materially different. Can these be differentiated and the first allowed and the second prevented?

This is not a professional opinion, but there are various provisions to counter such activities. For example, I'd expect transactions between connected companies to be treated as a whole. Ironically, some of the most visible signs of such activity takes place within the EU, directly as a result of EU legislation. The problem here is that tax rates are not set by the same entity which sets the rules for international tax arrangements.

As for ceding that power to the EU, try asking the Greeks what they think of non-Greeks deciding their financial affairs for them....

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Alan H
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Re: The future of Government (if any)

#60 Postby Alan H » October 18th, 2012, 11:48 am

Tetenterre wrote:It is part of an accountant's ethical duty to (legally) minimise his/her client's tax liability.
Presumably, as we speak, Costa's accountants are earning their keep and are busy setting up the same scheme scam now they realise Starbucks are getting away with it?
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

thundril
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Joined: July 4th, 2008, 5:02 pm

Re: The future of Government (if any)

#61 Postby thundril » October 18th, 2012, 3:34 pm

Nick wrote: Go out and make a fortune and then give it all the HM Treaury- I'll even give you the address. But nobody does.

JK Rowling, writing in The Times: circa April 2010.

I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain’s; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles.

A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism. On the available evidence, I suspect that it is Lord Ashcroft’s idea of being a mug
Where are all your altruistic socialists who have had a lucky break? They might give it away to charity (Lord Sainsbury, say) but they don't give it to the Government. Why should they? Why would they?

I recall Paul McCartney taking a similar stance to Rowling.. I have no doubt there are plenty of others too, but staying with the people who supported you through the tough times, and contributing your share in the good times, is so normal to most of us it's hardly news-worthy. It seems strange to me that such normal, human, social solidarity seems strange to you, Nick.


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