My word, is there no beginning to this man\’s knowledge?
It is important to stress the fact that this report is about tackling tax avoidance. This is distinct and different from raising taxes. This is the wrong time for the UK to raise taxes: they could shatter a fragile economic recovery as they are equivalent to spending cuts in their economic impact because they such aggregate demand out of the economy. Tackling tax avoidance is different. Whilst the aim is, of course, to stop revenue loss the impact is different from raising taxes because stopping tax avoidance actually increases voluntary tax compliance by most of the population who do not think some (and most especially the richest) are getting away with tax abuse that they cannot have access to, largely because wealth is required before tax avoidance pays in most cases.
Somewhere out there Keynes is revolving in his grave.
Whether you suck aggregate demand out of the economy by raising tax rates or whether you suck aggregate demand out of the economy by increasing collection of taxes already extant makes no damn difference to how much aggregate demand you\’re sucking out of the economy.
You\’re still providing a fiscal contraction by increasing taxes collected and reducing the budget deficit.
Remember, this is the man who is proud of not having paid attention to the economics part of his economics and accounting degree after the first term. \’Coz it were all rubbish, wern\’ it?
Lords preserve us from the ignorant…..