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06 Sep 2012
MILES DEAN thinks the Trade Union Congress's (TUC) spoof celebrity magazine Kerching! which highlights tax avoidance is "inflammatory, ill-informed, misleading sabre-rattling" and "tiresome old hat".
That's an interesting range of ad-hominem attacks, but the reality is that Dean is well wide of the mark on this issue.
Now I should, of course, declare an interest: I wrote Kerching! for the TUC, and as its author I'll accept that just one of Dean's accusations is accurate: Kerching! is a little on the simplistic side. But then, so is Hello!. And, as importantly, so are Dean's assertions.
That's because, while I can back up all Kerching!'s claims with reasoned tax argument, Dean has no hope of finding economic support for his claim that turning the UK into a tax haven, as he wants, would benefit our economy.
That's because it's impossible to claim, as Dean does, that non-doms who move to the UK are wealth creators as a consequence. They're not. That's firstly because they're only here to dodge their obligations to our society while living here at the expense of all the rest of us who have to pay more tax proportionately as a result.
Secondly, it's because, by creating more inequality in our society, they ring-fence privilege and destroy hope for the majority of people in the UK.
That loss of hope is now really basic. Millions of young people won't be able to afford houses because of the distortions in the property market that wealth imbalances – much of it non-dom- and tax avoidance-fuelled – have created.
Perhaps even more important, though, is the fact that tax avoidance in all its forms is massively destructive to business in the UK because it creates an unlevel playing field. So non-dom-owned businesses now have access to cheaper capital in the UK than those owned by domiciled people, putting local people at an inherent disadvantage.
And since some businesses now prosper at the expense of others because of their willingness to abuse tax rules, competition does not now take place on the basis of the value of the service a business supplies to its customers, but on the basis of the ability of the business to cheat and get away with it.
Inevitably, honest businesses, those businesses discouraged from investing in the future because they can't beat the short-term, tax-driven speculative gains of their competitors, fair employers and those who add value to communities all suffer and fail as a result of tax avoidance.
That's never going to be the basis of wealth creation. That is all about wealth destruction and that's exactly what tax avoidance leads to.
In that case, Dean's gain from selling tax avoidance is at cost to society at large, and that's exactly why I and the TUC reject it.
Richard Murphy is director of Tax Research UK and wrote Kerching! for the TUC
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Visitor comments Add your comment
Taking the fight to the opposite corner
Fascinating, Richard. Instead of producing a reasoned case supporting the assertions you make in Kerching! and debunking Dean's criticisms, you attack his beliefs. I know they say that attack is the best form of defence, but haven't you left your own corner unguarded?
If you have a reasoned case, as you claim, show us the evidence. Attacking your critics doesn't support your argument. It simply makes you look petty.
Posted by: Frances Coppola, 06 Sep 2012 | 17:47
On Ad Hominem
This, accusing Miles Kington :
"MILES DEAN thinks the Trade Union Congress's (TUC) spoof celebrity magazine Kerching! that highlights tax avoidance is "inflammatory, ill-informed, misleading sabre-rattling" and "tiresome old hat".
That's an interesting range of ad hominem attacks, but the reality is that Dean is well wide of the mark on this issue."
First of all it's non an ad-hom attack, it's a contemptuous dismissal of the content.
Compared to your intro to this article on your site:
"I mentioned an attack on the TUC’s tax avoidance spoof magazine ‘Kerching‘ by Mayfair lawyer Miles Dean yesterday."
which *is* an ad-hominem attack.
A little more logic, and fewer personal attacks would help you RM, plus an article actually responding to the critique, but it seems to me that the TUC should be representing the members of their member Unions, rather than providing platforms for polemic.
Posted by: Matt W, 07 Sep 2012 | 21:46
depressingly familiar story
Ive posted this on RM's blog, I doubt he will post it as he normally ignores posts that disagree with him - the fact that they wont actually list the reliefs they want abolished probably says something:
the last page of Kerching (on the left 3rd para down) says “the ten schemes listed on the right are all obvious examples of tax avoidance”.
unfortunately the right hand side lists such things as:
1. Introduce a new GAAR
2. Stop the current round of HMRC staff cuts
3. Abolish unnecessary tax reliefs
4. engage more actively with international partners
not to be pedantic about it – but none of those are actually examples of tax avoidance schemes are they – they are valid requests for change in law or to put more money into HMRC, but they arent “schemes” are they. Was the last page changed at the last minute and someone forgot to update the left hand side?
Number 5 – which is abolish unnecessary tax reliefs suggests that you/the TUC know what reliefs these are (it mentions film relief, and I would presume that higher rate relief on pension contributions is another) – why not actually list out all the unnecessary tax reliefs, or link to somewhere that does?
I struggle to understand why the TUC wont be more specific about which reliefs it wants changed (maybe it has and I just cant find them, but i have looked)
Posted by: anth adams, 08 Sep 2012 | 06:37
Can the TUC even legally get involved in this according to its own rules?
Matt W, on the point of why the TUC should get involved in this kind of thing:
Here is a link to the TUC’s constitution: http://www.tuc.org.uk/the_tuc/tuc-20421-f0.cfm .
The objects within which the TUC legally must restrain itself are in Rule 2:
Objects
(a) The objects of the Congress shall be:
To do anything to promote the interests of all or any of its affiliated organisations or anything beneficial to the interests of past and present individual members of such organisations.
To promote equality for all and to eliminate all forms of harassment, prejudice and unfair discrimination, both within its own structures and through all its activities, including its employment practices.
Generally to improve the economic or social conditions of workers in all parts of the world and to render them assistance whether or not such workers are employed or have ceased to be employed.
To affiliate to or subscribe to or to assist any other organisation having objects similar to those of the Congress.
To assist in the complete organisation of all workers eligible for membership of its affiliated organisations and subject as hereinafter set forth in these Rules to assist in settling disputes between the members of such organisations and their employers or between such organisations and their members or between the organisations themselves.
In pursuance of these general objects, and in accordance with particular decisions that Congress may make from time to time, Congress may do or authorise to be done all such acts and things as it considers necessary for the furtherance of those objects.
(b) In the interpretation of the above objects the General Council shall have complete discretion subject only to the power of the annual Congress to revise their decisions.
As I am sure you know Matt W, the purpose of objects of an organisation is to prevent the management from abusing their position to blow the organisation’s money to pursue their own hobbies or interests.
I have tried to read these objects as broadly as I can, and there is nothing in the wording or even the spirit of these objects that allows the TUC to fund or lend its name to this kind of activity pursued by Murphy.
I have raised this with him on his own blog, but I get banned. He is a knowing party to a fairly plain breach of the TUC’s constitution.
And if he is getting paid, then it gets worse.
Posted by: Adrian, 08 Sep 2012 | 09:27
Available housing
I cannot see any causal link between tax avoidance and the shortage of affordable housing.
The reason that there is a problem today is mainly due to Margaret Thatcher selling off council houses started by Margaret Thatcher in the 1980's, but not reinvesting the receipts in affordable housing. This had little effect in the short term but has had a major impact in the long term.
A case of the "sins of the fathers being visited on the sons".
Posted by: Kevyn Davies-Jones, 10 Sep 2012 | 13:18