The world faces one of those unfathomable mysteries. Any number of charities, campaign fronts and political groupuscules adamantly insist that corporations and the rich are dodging their rightfully due taxes. They propose measures which would lead to that cash being recovered and then comes the mystery. The money that is collected never amounts to a hill of beans compared to the original claims. How and why could that be?
One answer is that all are in this together, the politicians and even the tax collecting bureaucrats are in cahoots with the plutocrats. No, some really do make this argument. A rather more sensible revelation would be that the original claims are so vastly overblown as to be nonsense – that is why no one is ever able to collect the sort of sums alleged to be being hidden away.
The particular trigger for this musing is that Her Majesty’s Revenue and Customs (the U.K.’s version of the Inland Revenue Service) has only been able to collect, following various law and reporting changes, one third of what campaigners insisted would be forthcoming subsequent to those changes. There have been mutterings of a lack of will, insufficient taxmen and resources for them to work with and so on. Again, good sense insists that we look to a different reason. HMRC itself has always said that the tax gap – the difference between what is due and what is paid – is about one third what the campaigners themselves say it is. The gap is one third, collections are one third, really, it is not all that complex an explanation.