Err, no

“Tax provides the funding to run the country: hospitals, schools and everything else,” he says. “Every time someone pays cash in order not to pay VAT, the nation gets diddled.”

The nation is not the government, the nation is not the government finances.

The nation contains within it the government, of course, contains the government finances as a subsidiary part of said nation.

So it is true to say that tax evasion diddles the government, diddles the government finances, but not that it diddles the nation. For tax evaded gets used or spent somewhere else in said nation, by another part of said nation. Yes a builder having a bevvy off a non-taxed transaction is indeed still part of the nation. It isn\’t lost to the nation at all: only to the government finances.

Which, as above, is not the same thing as the nation at all.

9 comments on “Err, no

  1. He is also looking at it the wrong way. The government does not look at what needs to be done and then works out how much tax is needed. It sees how much money it can squeeze out of the rest of us and the spends it.

    This is why the government spends like a drunken sailor. This is why so much of our money is wasted. Because the only pressure on civil servants is to spend. Never to make do.

    Diddling the taxman is a patriotic duty.

  2. High rates of tax encourage evasion in due proportion. If government wants to reduce tax evasion, it should reduce the amount it tries to take.

  3. SMFS

    ” It sees how much money it can squeeze out of the rest of us and the spends it.”

    Yes, but it doesn’t stop at that it also spends money squeezed out of future generations

  4. Posit… Should said tradesman spend his ill-gotten gain on an extra packet of fags he’d be paying more tax than if he declared the income. 🙂

  5. SMFS, I got the impression that governments spend money like it was water flowing through their fingers, and when they run the pump dry only then think about funding it. Because they do it arse about face, they don’t plan ahead and so tend to go for the easy solutions rather than the correct solutions. In other words, they tax tax tax in desperation to fund their *past* spending.

  6. SBML has it right. Government spending precedes taxation. Since when did governments EVER tax the population first to pay for a prospective war? Nah – they go to war then inflict punitive taxes on the population to pay for it. Sorry, SMFS.

  7. Sir Humphrey: “Taxation isn’t about what you need.”
    Jim Hacker: “Oh, what is it about?”
    Sir Humphrey: “Prime Minister, the Treasury doesn’t work out what they need to spend and then think how to raise the money.”
    Jim Hacker: “What does it do?”
    Sir Humphrey: “They pitch for as much as they think they can get away with and then think what to spend it on.”

  8. I’m practically an anti-Ritchie when it comes to tax: whereas he thinks that (legal) tax avoidance and planning is immoral, I tend to think that a pretty hefty chunk of outright evasion is moral, simply because it cuts off funding to people like Ritchie. You still shouldn’t do it, but only because the penalties are so harsh.

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