And doesn\’t this just screw over Ritchie\’s numbers?

Tax dodgers are costing the UK nearly £200 per household – a total of £5.2billion every year, according to a report.

The unpaid taxes would be enough to provide £21 a week to every household in fuel poverty or double the amount of universal childcare entitlement to 25 hours per week, the study from Oxfam said.

The figure only covers tax evasion by individuals. If the amount of tax lost by the public purse through tax avoidance and illegal invasion by individuals and companies is added together, the figure is more like £32billion a year.

Ritchie normally claims something more like £120 billion for avoidance and evasion put together.

Obviously Oxfam are terribly off message here.

41 comments on “And doesn\’t this just screw over Ritchie\’s numbers?

  1. If the amount of tax lost by the public purse through tax avoidance and illegal invasion by individuals and companies is added together, the figure is more like £32billion a year.

    Tax invasion? Can someone be a tax invader?

  2. For a start Oxfam only use the £5.2bn number referencing ONS. The Mail have added in HMRC’s dubiously number for the total.

    SE
    There is nothing Murphy’s literature that advocates high tax, anywhere.

  3. Arnald>

    Don’t be ridiculous. He argues for a change in the rules which would result in a much higher tax take. That’s no different to calling for the rules to stay the same and the headline rate to be raised.

  4. @ Arnald
    Confiscation of legally and legitimately acquired assets is the ultimate in high taxation.
    Secondly Murphy has repeatedly denied the existence of the Laffer curve (instead of arguing about the location of the peak) and demanded that taxes be increased. While you do not yet pay UK tax (but you will once Murphy gains power), those of us who do tend to think that tax rates in excess of half our incomes are high. What do you mean by “high”?

  5. Tax dodgers are costing the UK nearly £200 per household

    Alternatively

    Tax dodgers are saving nearly £200 per household

    You choose

  6. There is nothing Murphy’s literature that advocates high tax, anywhere.

    While I think your statement is hilariously naive, it bears no relationship whatsoever to what I said.

    Strain your limited comprehension of English and have another look, please. Just to ease you in the direction, the “Lord High Constable” isn’t a campaigner for taller policemen.

  7. SE
    granted, I skimmed for key words, but passim I’m sure you’ve said so much.

    so there.

    Serf

    I’ve chosen. Those households have paid their share. Pissing about looking for ways to abuse the law “because it doesn’t say you can’t do that” just because you’ve got enough cash to pay someone to do it means tax ‘dodgers’ are a cost to society.

    Any you lot love them.

  8. In fairness to Arnald, I think he is correct.

    I don’t recall Ritchie specifically advocating that taxes be higher than they are at the moment, only that the progressive taxation that we have in the UK is required for “social justice” and that those who use avoidance and evasion to reduce their contribution to said progressive taxation should be subject to investigation, back taxes, penalties and interest.

    Higher taxes is not something that I’ve seen from Ritchie, just that the taxes he deems due should be paid in full and then some.

    Tim adds: You obviously don’t read much of Murphy. I still giggle when I think of his budget submission (with the TUC) one year. He called for income tax to rise to 75%. Said that there would be a huge rise in hours worked as current housewives to rich men went out to work. Meaning that he managed to get the sign on labour supply with reference to tax rates the wrong way around.

    Plus of course, he was very definitely calling for taxes to be higher.

  9. What Serf said.

    Another translation might be “Tax dodgers are costing the UK political class £5.2Bn by keeping nearly £200 per household back for things they actually want”

    Other versions could be imagined.

  10. John Galt (#15) Have to agree here, much as it pains me to – There’s nothing specifically in the literature I’ve seen from him that advocates higher taxes per se, although, Arnald, I note he was less than enthusiastic about the Osborne decision to lower the top tax rate to 45%.

    What I would say is that the end result of his advocacy of increased state involvement in the economy is, based on the Period 1945 to 1979 (which he oddly seems not to mention in his analysis) likely to culminate in higher taxes, and arguably even more exotic schemes to avoid them, but that is a different argument, and one which I assume Arnald would disagree with.

  11. JuliaM (#6) In fairness based on his utterances here I’d have to say Arnald gives me even more comic value than the Iraqi Information Minister under Hussein.

  12. >Tax dodgers are costing the UK nearly £200 per household – a total of £5.2billion every year, according to a report.

    I prefer this headline “Tax looters are costing households thousands of pounds every year”.

  13. I would argue that it is not more State involvement, but more buy in from those that are required to pay taxes. To achieve that the state needs the accountability and honesty, and the ability to act on its mandate; what are clearly defined objectives.

    Calling the state a thief and then citing policies you don’t care for is not constructive, arguing that people should be allowed to cheat is plainly destructive.

    etc

  14. “He called for income tax to rise to 75%.”

    Well, 75% for the top rate of tax, I suspect he isn’t calling for a 75% basic rate.

    To be fair to Ritchie he has always explicitly stated that he favours a larger government and that the overall tax take would need to be raised to fund this.

  15. Arnald (#20) – No, I can see that’s what you’re saying: We need to be more aggressive and give the tax authorities more power (and resources) to pursue those who are avoiding taxes.

    Hence why much of Murphy’s coverage is of tax havens (especially those nominally under crown jurisdiction) and their role in effectively, in his opinion acting as accessories by facilitating tax avoidance. The problem is the legal tradition in the UK is that unless something is expressly prohibited, it is legal. Hence what Murphy perceives as people using loopholes to ‘cheat’ are acting by the letter, rather than what he perceives as the Spirit of the Law. That’s unfortunate but it’s how the judiciary has (usually) interpreted it.

    That’s part of the problem the UK has had in implementing EU legislation over the 1980s and 1990s in particular. The legal traditions here are very different from those countries whose legal codes are in the continental tradition.

    That’s what I mean when I say that Murphy is almost advocating policies that run counter to human nature. People will seek to minimize their tax incidence by any means at their disposal, and the state sector thus needs to become more efficient in spending what money does come its way, rather than engaging in a protracted battle to wrangle yet more money out of those less wealthy people who cannot shelter their money in offshore tax havens, or complex tax minimization arrangements.

  16. Arnald: “Pissing about looking for ways to abuse the law “because it doesn’t say you can’t do that” just because you’ve got enough cash to pay someone to do it means tax ‘dodgers’ are a cost to society.”

    See what I mean about Arnald being funny in a bad way?

  17. Top rate is not 75%. Marginal tax rate is higher for lower-middle-income families in work with a child at school and one at university (it looks to be over 100% for those with a child at school and three at university).
    Is Arnald prepared to buy in by paying UK taxes? If not, he should shut up. I pay my taxes so I have a right to complain about them. Arnald wants representation without taxation.

  18. Serf: “Tax dodgers are costing the UK nearly £200 per household

    Alternatively

    Tax dodgers are saving nearly £200 per household

    You choose”

    The third (unmentioned) option is actually the correct formulation:

    Tax compliance doesn’t cost the state anything in terms of lost tax revenues and does not reduce the taxes owed by taxpayers.

    Also note:

    There are only two options to the taxpayer:

    1) tax compliance, and
    2) tax evasion.

    The only way one can ‘dodge’ taxes is by evading them.

    What Arnald, Murphy and their ilk refuse to acknowledge is this: There is no such thing as ‘dodging’ taxes when tax law doesn’t impose a tax. Tax avoidance is simply tax compliance done efficiently.

  19. @John77 ‘Is Arnald prepared to buy in by paying UK taxes? If not, he should shut up. I pay my taxes so I have a right to complain about them. Arnald wants representation without taxation.’

    I agree that Arnald is a deeply stupid person, but it’s hard to make this argument while following a blog full of opinions written by a Briton based in Portugal.

  20. @Interested: as far as I’m aware, TW is not demanding that the UK tax its inhabitants more, while living in a low tax country himself, which would not be subject to those increases.

    Tim adds: Just to correct something. Portugal is not a low tax country.

  21. INT. DAY. TAX OFFICES OF INDEPENDENT REPUBLIC OF MURPHONIA.

    Citizen: I have completed my tax return, Comrade Murphy.
    Comrade Murphy: (Examines thousand page document). Well done. Everything appears to be in order. (He beckons to a guard). Guard!
    Guard: Yes, comrade?
    Comrade Murphy: Throw this citizen in prison for tax evasion.
    Citizen: But why?
    Comrade Murphy: Though your return is correct in every detail – according to extensive legal framework I have written – I think you should have paid slightly more tax and you are hereby convicted as a tax evader.

  22. How the **** do they work out the amount of tax evaded anyway?

    Lets imagine “Joe the Welder” for a minute. Earns a wage Monday – Friday, goes through the books PAYE. All above board. Work picks up a bit, and the boss says “coming in Saturday mate? Sort you out £100 cash if you want, rather than booking the hours, make it worth your while”
    Joe works his Saturday, boss pays up from petty cash, all is well with the world…

    Ok, so the chancellor only loses out on £30 or so, but make that half a dozen Saturdays, and the multiply by the number of people working on this basis, and it’s a probably a fair old wedge of dosh – but how on earth does the ONS work out how big? That’s before considering other forms of evasion.

  23. All this shows is that estimates of the size of the black economy are essentially plucked out of thin air.

    (Perhaps it does show that R makes the most flimsy assumptions without proper justification of parameter choice.)

    Best,

    P

  24. The Chancellor is a thieving scumbag who has NO “right” to so much as one halfpenny of any money earned by voluntary exchange of value between human beings. He may have a lot of costumed thugs backing him up but that is the begining and end of any morality involved.

    Non-human or more accurately evil, in-human beings such as Ritchie, Arnald and all other socialists/statists who think they have a right to help themselves can go piss up their legs and play with the steam.

  25. Murphy on ‘The One Show’ on BBC1 this evening, after an item featuring Margaret Hodge & the Public Accounts Committee. He’s definitely got the inside track to the usual media now & was, as expected, banging on about tax avoidance. I had not seen him in action before, and he comes across as scarily credible:(

  26. Tractor Gent (#32) I haven’t labelled him ‘The most dangerous man in the world’ without reason – he does come across as plausible on TV or Radio (less so on the comments section of his blog), and there’s enough people out there willing to be taken in by it.

  27. @ theProle
    Lots of survey data on the amount spent on VATable and VATfree goods and services. Apply VAT rates of 20% and (might be 5.5%, can’t remember, for lower-rate items); compare with VAT collected – estimate VAT tax gap; extrapolate to general taxable income IGNORING the exemption from VAT for small businesses (usually self-employed guys making a bit more than they would get on benefits or to top-up an inadequate pension, like one of my allegedly retired colleagues). So the whole shebang is based on a systematic overstatement of VAT evaded.
    I do not deny that some VAT is evaded (and adopt a rigorous practice of paying by cheque when offered a discount for cash although quite happy to pay cash when a guy is oppressed by extortionate bank charges). However any estimates of tax evasion based on the VAT gap are clearly biased.

  28. #32 & #33
    Why doesn’t anyone stand up to this clown? Amazon etc should send in people who can explain their position (EU single market etc)
    BBC will never challenge him as more tax means more for them.

  29. @Max #35: I would prefer that Starbucks et al would give a robust defence of their position, but I guess they see the danger of themselves just coming across as arrogant fat-cats. Better to try to engineer Murph et al into a position where they spontaneously detonate. Difficult.

  30. @ Max

    Because they know that what they do isn’t what most people think they should do. The fact that it’s legal to send royalty money to the Netherlands, or to sell books from Luxembourg is neither here nor there to the casual observer who thinks that he can’t get a GP appointment because the multinationals are avoiding tax.

    To defeat Murphy it’s necessary to pursuade people that nobdy needs to pay more tax… or that, if more tax does need to be paid, that it shouldn’t be big companies that pay it. Good luck with that. In this country people like to complain, and like to have a big bad bogeyman to complain about. That’s why the Murphy stuff gets lapped up. He’s preaching to the choir.. and whenever anyone says ‘I’m allowed to do that’ the response is ‘Well you shouldn’t be.. and because you shouldn’t be, you shouldn’t’.

    Average Joe will only agree that morality has no place in tax law when he’s the one suffering the implications of that.

  31. TTG>

    I think you have that wrong. The complaint from the MOTCO (rather than the loony-left protestors) is not that big corps don’t pay enough tax, but that it’s unfair that they can avoid tax whilst he can’t. Fundamentally it’s a complaint that he’s paying too much tax.

  32. From the point of view of the Laffer curve it makes no difference whether you collect all of a 25% tax or half of a 50% tax.

    It’s arguably better to collect half of a 50% tax as the people most likely to dodge the tax are the people most likely to put the money to better use.

  33. Jim: hang on. Are you claiming people who live outside a country should be allowed to suggest that said country should tax its inhabitants less, but not that it should tax its inhabitants more? That seems, erm, an unusual viewpoint.

    Dave: I don’t see how your point differs from TTG’s point. “I pay so much bloody tax cos these bastards don’t” is the basic point.

  34. @john b: not really. It depends what position the person outside is in. In Arnalds case he lives in a low tax jurisdiction, so he’s advocating higher taxes on people in the UK, who are already paying higher taxes than he does. And he wouldn’t pay any of the higher taxes he advocates for others himself. Calling for higher taxes on others but not yourself is rank hypocrisy IMO.

    If on the other hand someone lives in a high tax country and wants to try and persuade us in the UK that such a system is a good idea, then fine, he at least has his money where his mouth is.

    Anyone advocating lower taxes for others , whether from a high or low tax jurisdiction is OK as far as I’m concerned – wanting others to be better off, even if you personally can’t benefit from it is pretty altruistic IMO.

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