Tax avoidance

The government these days (and politicians from all sides) are going after businesses and wealthy individuals who arrange their affairs in such a way to reduce their own tax bill. This is decried as immoral (as it is not illegal since the law allows it).
In the past week executives from companies like Google, Amazon, and Starbucks have been summoned by parliament to give account of their tax avoidance schemes, and been given a good thrashing by MPs.
And of course, with most people who are not in a position to do anything to reduce their tax bill, especially in times of austerity, pointing fingers at those who don’t pay their way (like we have to do), allows politicians to score serious points.

However, anser me this honestly: if you could cut in half your tax bill, in a legal way, without making it ineffective (i.e. without having to pay an accountant more than he could save you in taxes), and in a fairly simple and immediate way, wouldn’t you do it? Really?

Well, I would as well. And the reasons might be different for different people. I might just be selfish (while I might not be ready to admit it so bluntly), and want more of my hard earned money to spend for myself and my family. More importantly for me, I hate to see how lots of my tax money is spent by the government.

For example, the UK have spent billions in the past decades on a war in Iraq, and a war in Afghanistan (neither of which the electorate wanted, but the government didn’t listen!). Where did the money for that come from? Taxes (and borrowing, that needs to be repaid with tax money).

I have lost count in recent years of how many failed IT projects the government has paid for, and allowed to flounder through sheer incompetence. And how was all that paid for? Tax money.

And have we forgotten the MPs’ expenses scandal? Only in the last few days another former MP has been found guilty in the courts for fraudulent claiming money she wasn’t entitled to. And right now they are debating increasing MPs salaries again (why shouldn’t they be paid the average national salary, so they wouldn’t loose touch with most of their constituents?). How is that to be funded? You have guessed right: tax money.

This week we are going to vote for people to fill the newly created posts of Police and Crime Commissioners (PCCs), which will cost an arm and a leg. Who asked for these positions to be created? I didn’t, and before these were announced, I never heard anybody asking for them.

One could come up with lots more examples of public money being squandered. Now the people who are responsible for spending our tax money so unwisely, are the same people who are complaining that they aren’t getting more from individuals and businesses who use legal loopholes to avoid giving it to them. What I would say is that if you don’t want people to engage in tax avoidance schemes, you should first be responsible with the money you are already getting, and not treat it as if if was yours to waste, because it isn’t. It is our money that you are so often flushing down the toilet.

So if tomorrow I were to win the lottery (in case I remembered to play it), I will go and talk to an accountant, and see how to set my affairs up to manage (legally of course), to have the least of it wasted through government negligence, incompetence, and bad choices I disagree with. And if the only way to do that is to reduce my tax bill, so be it. And I will probably find a different way to contribute to my the community where I live, there are lots of organisations (charities and businesses) who do amazing work, and don’t squander money (because they will go out of business if they do, unlike the government). And I won’t feel in the least guilty about it, with good peace of the Public Affairs Committee, and Margaret Hodge.

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