In terms of divisive issues, there are very few which seem quite as great as tax avoidance. Some see it as a perfectly legal practice that anyone would do if presented with the opportunity. Others see it as inherently evil and one of the prime causes of the current economic plight. Either way, people cannot seem to come to an agreement on the subject, which leads to endless spats between people labelling each other as classists or commies.
Tax avoidance is usually considered an acceptable practice by those ‘on the right’, so to speak, with a number of Conservative donors and advisors (notably Phillip Green) flagrantly undertaking the activity without any concern. However, when someone ‘on the left’ commits similar acts, it creates an absolute shitstorm. Ken Livingstone, considered by many to be the incumbent poster-boy of UK socialism, was recently the subject of an investigation by HM Customs, after avoiding thousands in tax by channelling earnings through a personal company (meaning he paid corporation tax of 20%, rather than income tax of 50%).
Somewhat surprisingly, this didn’t cause anywhere near the kind of fall-out that came with the discovery that TV’s Jimmy Carr had paid as little as 1% tax on earnings of around £3.3m a year, via funnelling income through a highly convoluted scheme in Jersey. The scheme, K-2, worked by Carr having his income paid directly into a Jersey based holding company, who then gave the money back to Carr as part of an interest-free loan (a loan, or course, which would never be repaid).
Spectators were all over this like a cheap suit. For a reason unknown to me, Carr is considered by many to be one with ‘the left’. He’s seen by some to be a comedian in the same vein as ‘The pub Landlord’; an ironic pastiche of a far-from-salubrious figure. Carr will come out, say some rather vulgar sex jokes and the audience is supposed to keel over in fits of laughter; not at the content of the joke, but at the mindset of this figure in front of us. Let’s not forget that Carr once threatened Jim Davidson with legal, who Carr claims had stolen his material. So clearly the line between downmarket jokes and ironic satire is finer than we think.
With a notably sized demographic seeing Carr as this parodying figure who exposes the crassness of a pompous sect of society, many – as always seems to happen when one on ‘the left’ is exposed – leapt to his defence. One common rebuttal of the charges was that Carr’s tax swindle paled in comparison to that of major Conservative figures; the party which The Daily Telegraph (who reported the story) ‘unofficially’ support. Which is bollocks, in essence. It’s like saying that xenophobia is fine, as long as you’re sufficiently less xenophobic than a right-wing tabloid newspaper. Then there was Carr’s defence itself, which was that he had no real idea what was going on, and that his accountant hadn’t be totally truthful with him. This excuse, however, is somewhat questioned by Carr’s own statement, which was, “My accountant simply asked me ‘do you want to pay less tax?’ and I said yes”, which implies that Carr had a active role in offsetting his income obligations.
Despite defences of Carr being epically shite, the attacks on him were far, far worse. The debate between fans and foes quickly turned into a contest aimed at discovering who could sound like the bigger cabal of twerps. David Cameron, who has become famous for rubbing shoulders with some of brashest tax avoiders in the country, made a deliberate decision to single out Carr. He described Carr’s behaviour as ‘morally wrong’, claiming he was ‘putting money in a very dodgy tax avoidance scheme’. This must be hard to take for Carr, especially as when asked to comment on Gary Barlow (fellow K-2 member and, coincidentally, Conservative donor), Cameron stated that he would not do “running commentary” on people’s tax offences. Of course, this should be no surprise, as when quizzed on the aforementioned Phillip Green (‘Conservative Advisor’ Phillip Green), Cameron said; “I’m not getting into an individual’s tax affairs”. So I assume the message that D-Cam is trying to tell us is that tax avoidance is fine, as long you aren’t nasty to him. Otherwise it becomes “Morally Wrong”.
Possibly the most bizarre comment came from Toby ‘How’s that school funding from the state coming on?’ Young, who, apropos of nothing, attempted to convey that tax avoidance was fine since we all love a bit of duty free, and is large scale tax avoidance really that much worse than buying 10 Mayfair smooth on a P&O ferry?
This bizarre line of enquiry lead to a backlash on Twitter, by those attempting to draw the most contrived correlation possible.
The real sticking point of the wider debate on tax avoidance is whether or not something is acceptable because it’s legal. The only real defence people make for it, is that these contrived schemes are legal. And if the laws say it’s correct, then who are we to argue?
What one must question is whether laws alone make a good society. For 90% of the population, it isn’t laws stopping you from punching someone in the face or robbing a shop. It’s because you know it’s wrong, and don’t wish to live in a society where acts like this are tolerated. As can be said for driving at 160mph past a school, pinging arrows from a crossbow down a high-street or dealing heroin to teenagers. We don’t refrain from these activities because there are laws against them; we refrain because it’s inherently wrong, and, as previously mentioned, we don’t want to live in a society that condones this.
Which brings us back to tax avoidance. Do we want to live in a society where avoiding tax is considered perfectly acceptable? We currently live in a society with a serious gap between spend and income for the government. We currently live in a society where government deficit is forcing cut back on benefits for those in need of it most, like the poor, the vulnerable and the disadvantaged. We live in a society where widespread cuts to health, education and councils are making the services we receive every day more and more stretched. We live in a society where over 2 million young people are unemployed yet there are no mechanics in place to help them. We are living in a society where the state is weakening, and part of the reason for that is through allowing people to avoid paying their fair share.
I’m not trying to sound like a cheap Trotsky knock-off, standing on a podium and launching into a rallying cry, but I refuse to believe that what we’re seeing and experiencing now in the world around us is a multi-century evolution to a perfected society. The fact is that the budget has a deficit, and a way to solve that deficit is by demanding that the top 5% of earners in the country pay their fair share. And instead, people are claiming that it’s legal, and we’d all do it if we had the chance. As has been discussed, ‘legally right’ doesn’t mean ‘morally right’, so this is very much a threadbare defence against the accusation of whether tax avoidance is an acceptable activity.
Even the most ardent communist would struggle to get that worked up over someone buying 20 B&H Silver and a bottle of gin from duty free. However, someone going to such lengths as K-2, where money is funnelled all over the place through complicated ‘loan’ style transaction, indicates such a distain and repugnance from top earners towards these vital services which are essential to so many, that it is surely impossible for anyone with an ounce of compassion to not be appalled by this behaviour. The fact that someone would go to such lengths to ensure that our schools are underfunded makes my skin crawl.
Possibly the most depressing thing about the whole Jimmy Carr saga is that this comes after the recent news that he has bought an £8.5m house in North London. Now, as someone not blessed with this wealth, maybe I can’t comment. But surely, at some point, one gets to the stage when they have a sufficient amount of wealth. If I could afford an £8.5m house, I would probably think I was doing rather well. I would probably consider myself to have all the money I could possibly require to lead a fulfilling life. And yet, despite having this somewhat obscene wealth, Carr still felt that it wasn’t quite enough. That this life of grandiose fiscal behaviour didn’t quite tick every box. There was still a financial void in his life. After all, what’s better than one £8.5 house; TWO £8.5m houses!
Yes, what Carr did was perfectly legal. But the real question rising from this affair is whether we want a society based on wafer-thin laws that unscrupulous people can worm their way around, or on considered moral foundation. Because this attitude of chauvinistic social Darwinism starts by tax avoidance, and ends with a class divide, which is impossible to mend.