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The Tax Code Must Die

By Sara Scarlett
January 27th, 2016 at 12:49 pm | No Comments | Posted in Tax

This article on The Poke did make me chuckle:

Screen Shot 2016-01-27 at 16.42.41

It does, however, raise the point as to why what companies have to pay in Corporation Tax is open to interpretation. The Tax Code is a convoluted mess; it’s how the UK hides it’s corruption. What a company has to pay can be argued up or down – so naturally companies hire accountants to argue their tax bills down. Why not? I would.

The whole Tax Code needs to be ripped up and written again. The simpler, flatter, more transparent, and lower taxes are, the less they will be evaded.

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Barlow Is Not To Blame!

By Sara Scarlett
May 13th, 2014 at 11:35 am | Comments Off on Barlow Is Not To Blame! | Posted in Economics, Tax, UK Politics

I can’t quite get my head around the outrage over the Gary Barlow tax avoidance (note: not tax evasion) story. Margaret Hodge MP has actually suggested that he should give back his OBE! What a joke!

Let us be under no illusions. Loopholes exist because politicians put them there. Holes in the tax code are created by politicians and politicians alone. Politicians are fully responsible for them and could get rid of them if they wanted to.

For politicians to heap all the blame on Barlow is incredulous. The thing about loopholes is this: why would anyone pay more tax than the tax code says they are legally obliged to? Shouldn’t we be more outraged by the politicians who have been poking holes in the tax code for years? The more complex and convoluted the tax code becomes the more it becomes a Swiss Cheese that is easy for the rich to navigate – they can afford expensive accountants – but a nightmare for individuals and small companies.

The outrage directed at Barlow is a very sad thing because it is a distraction from a proper discussion about tax code reform and the people who are responsible for the disastrous state the tax code is in.

Reform the Tax Code or Shut the F*ck Up!

By Sara Scarlett
December 13th, 2012 at 11:17 am | 2 Comments | Posted in Economics, Tax

It’s the nuanced political analysis that you’ve, no doubt, come to expect from Liberal Vision…

But seriously! Why would anyone or any corporation pay more tax than the government tells them they legally are obliged to?

Bashing corporations for legally avoiding tax is like bashing celebrities for wearing fur because it’s easier than persuading a motorcycle gang to give up leather.

The right thing to do is to make the badly needed changes to tax code. And yet our public servants don’t. Why? Because that would just be too hard for the little darlings!

I know that doing the right thing is tough. Doing the job that you’re paid to do and that you campaigned hard to be able to do in the last election must be so hard for you.

If it’s not obvious in the tax code how much more tax a company is arbitrarily meant to be paying then what exactly are the accountants meant to do? Just pull a figure from the sweet blue sky and pay that? That’s what Starbuck’s did.  It’s like ‘hush money’ – we’ll give you £20 Million and you kids leave us alone now. How on Earth is this a proper way for companies to function when it’s just not obvious how much tax corporations and wealthy individuals are meant to be paying?

And yet there are not truly meaningful efforts from the Lib Dems or the Tories to reform the tax code. So you can bash Google, Amazon and Starbucks all you want but they’re only following the law and the people who make our laws don’t seem to want to change them. This is a missed opportunity. Which is a shame; it’s needed now more than ever.

Médecins sans frontières

By Tom Papworth
April 17th, 2012 at 9:00 am | Comments Off on Médecins sans frontières | Posted in health, Nannying, Tax, Uncategorized

Doctors just can’t help trying to save people, it seems.

The Academy of Medical Royal Colleges, which brings together the presidents of the Medical Royal Colleges and Faculties and so purports to represent nearly every doctor in the UK, is to lead a campaign to tackle rising levels of obesity.

One’s initial reaction might be to welcome a medical intervention aimed at combating something that kills as many as 30,000 people each year. But unfortunately, it is not a medical intervention that these doctors have planned.

My latest article on the IEA blog explains that the medical elite, having identified what it considers to be the end that society should pursue, is turning to the coercive power of the state to achieve that end.

Comments on the IEA blog, please.

And they say WE need saving!

 

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Alcohol taxation: the truth, the whole truth and nothing but the truth

By Guest
February 2nd, 2012 at 10:50 am | 5 Comments | Posted in Spin, Tax

“The truth, the whole truth and nothing but the truth” is what we swear to do when we testify in court and perhaps our world would be a better place if society encouraged that approach in public life. Sadly society doesn’t so it seems to be increasingly acceptable to tell half truths and even clever lies if they are “on message” or “advance the cause” and as a result our lives are increasingly governed by partial truths and spin.

Notable recent examples are activist’s persistent claims that social problems with alcohol are caused mainly by the “real price being less than it was 30 years ago” or “alcohol being cheaper than it has ever been”. The price /affordability confidence trick has been exposed before, but as the guilty include senior medics and the media still don’t seem to have worked it out yet, here is a step by step look at how the confidence trick of affordability indexes works. This requires no special expertise and the NHS /ONS statistics on alcohol are available to all.

Most people think of real price as the price of a product relative to all other products so using the term “real price” implies that alcohol is cheaper now than in the past taking into account inflation.

The reality is that alcohol has increased in price relative to RPI by 22.9% over the last 30 years according to the NHS as shown in Figure 1.

Figure 2 gives some insight into how health campaigners arrive at their claims. It shows the “affordability” of alcohol and we see that alcohol has indeed become more affordable over time. Some activists do recognize the difference between affordability and price but stop short of telling the whole truth by not mentioning what is driving affordability.

In the interest of the whole truth we need to provide context, which Figure 3 does by including the affordability of all goods using the same measure. Without context such indexes are deceptive.

Affordability indexes are simply price relative to RPI plotted against household income relative to inflation. The driver behind alcohol affordability is not “real”price but disposable household income which has risen significantly above inflation since 1980. As a result alcohol has become more affordable but less so than other RPI goods. The “real” affordability of alcohol relative to all RPI goods is shown in Figure 4.

Whilst we might expect the deception that confuses price and affordability from activists, it is worrying that Figure 2 is the only graph featured in the NHS Alcohol Statistics from which I derive all the data used here.

When household disposable income is corrected for baseline and inflation:

Affordability of alcohol = (Household disposable income / ((Alcohol Price Index/RPI)*100))*100

= (177.5 /122.9)*100 = 144

Affordability of all RPI goods = (Household disposable income / ((RPI/RPI) * 100))*100

= (177.5 /100)*100 = 177.5

So increases in alcohol taxation called for campaigners would not be a response to falling prices as they have claimed but an affluence tax.

Some might argue in favour of sin taxes based on relative affluence and a link between alcohol taxation and disposable income but activists are not campaigning on that basis. Backed by an uncritical media, activists have grabbed the attention of politicians by popularising the myth of ever increasing consumption driven by ever decreasing prices despite the ONS data pointing in the opposite direction.

We hear that more young people are damaging themselves with alcohol these days and who better to make the point than liver doctors who can be rightly considered experts in the consequences of alcohol abuse. However, they are not experts on the economics of our relationship with alcohol and it is conceit for them to assume expertise on the causes of what is a complex social problem.

Despite this, activists waste no opportunity to inflict their evangelical views on the nation. Here is the BBC reporting senior medic and activist Ian Gilmore

Sir Ian told the BBC there had been a ‘very close link’ between the falling prices in real terms over the last 20 years and the amount Britons drank

The ONS has only begun recording total (at home and outside the home) household consumption recently but based on the data since 2001 I beg to differ. Figure 5 shows the percentage change in consumption and the alcohol affordability index from a 2001 baseline. I see no “close link” using this data or any other consumption data.

As a father of two teenagers I am all too aware of the pitfalls faced by young people in our modern society. It would be helpful if we could rely on our political and medical establishments to guide us, but we cannot as they are clearly averse to telling the whole truth or even most of it unless it suits their agenda. It would be wonderful if any political party owned up to the lack of honesty in public life and did something about it. Or am I alone in expecting people with knighthoods to be honest?

By Chris Oakley. Chris has previously posted on Liberal Vision A Liberal Tolerant nation? and  What hope is there for liberty if truth becomes the plaything of political lobbyists.

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