Good God. Danny Dorling manages to misquote Ritchie!

Corporate tax avoidance (dubious but not
strictly illegal) was estimated by the TUC
(Trade Union Congress) to be £12bn for
the year 2008. Tax avoidance by individuals is
believed to cost the Treasury £13bn a year
Illegal corporate tax evasion comes to £70bn
a year and unpaid corporate taxes to £26bn
(TUC, 2010) a year – a total of £121 bn.

From here. Which is, I have to say, a lovely piece of Ritchiebollocks from start to finish.

But no, no one, not even Ritchie, says that illegal corporate tax evasion comes to £70 billion.

What Ritchie does say is that all of the tax that should be aid by the grey economy (that is, legal activities but ones which do not pay the tax due) amounts to £70 billion.

That figure is, to put it mildly, highly suspect. But it ain\’t corporate evasion. It\’s all evasion. And the vast majority of it will not be corporate at all. In fact, we\’d suppose, and we\’d be right to do so, that just about all of it is in the unincorporated sector.

Think it through for a moment. BP can indeed play tax avoidance games. But it can\’t have on its books money that they don\’t declare: putting it on the books is declaring it. This tax evasion is the grey economy: and corporates, by definition, aren\’t playing in hte grey economy.

Given that it\’s a Ritchie acolyte screwing up Ritchie\’s research in Ritchie\’s magazine I do hope for a correction.

5 thoughts on “Good God. Danny Dorling manages to misquote Ritchie!”

  1. Indeed, corporate evasion (beyond very small companies) will be very rare, given the number of people who would have to be involved in it and not blow the whistle.

  2. Wasn’t there a Murphy nonsense paper about companies that are wound up or struck off before they submit accounts?

    Didn’t he assume that they made an average level of profits (rather than being struck off because they’d made losses or never done anything), and therefore come up with a ludicrously high level of corporate tax evasion from that?

  3. worth taking a look at the Murphmeister’s spat with Peter Watt on Twitter today – dear ole Ritchie is claiming that using legal allowances isn’t “tax avoidance”. In Ritchie’s parallel universe “tax avoidance” is “getting round the law”. That’s actually “tax evasion” but what’s a legal definition between friends?

  4. Richard

    Yes. He’s looked at all the companies who simply don’t file their paperwork, and made assumptions that add up to a lot of missing tax.

    Whilst his assumptions and conclusions are probably nonsense, I’m won’t bash him for pointing out that the number of registered companies who don’t file their information is unacceptable, and the fact that nothing much is done about it is also unacceptable. An exercise to clean up the register of companies wouldn’t be the worst plan ever, and either proving or disproving one of RM’s key assumptions would be a indirect effect.

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