Liberal Vision

Clegg’s solution to complex tax code: another tax!

A rather depressing Telegraph online headline today reads “Nick Clegg goes after the ultra-rich” . Nick Clegg  has apparently recently “uncovered evidence” that our tax code is too complex and that complexity is benefiting tax-lawyers and the super-rich.

“The Deputy Prime Minister says he has uncovered evidence that hundreds of millionaires are paying a tax rate of less than 20 per cent on their earnings by using an “army of lawyers and accountants……. A wide array of tax loopholes and reliefs are exploited by the wealthy to reduce their tax bills, leading to them paying overall rates on annual earnings beneath those faced by ordinary workers, he said.”

“Uncovered” really? Good grief – where has he been for that last couple of years ? Here is an article from Mr Littlewood (formerly of this parish) now of the Insititute of Economic Affairs back in Autumn 2010.

“Early this year, an IEA research paper showed that with over 8,000 pages of primary legislation – in very rough terms about six times the length of War and Peace – Britain has the longest tax code in the world. For those inclined to believe that other Western European countries are always more bureaucratic than Britain, it was worth noting that the German and French tax codes weigh at a comparatively modest 1,700 and 1,300 pages respectively” Mark Littlewood: Telegraph 8 September 2010

Then again one year later Littlewood said it again …

“The Tax Commission research points to the incredible length and complexity of our tax rules as the principal culprit. Tooley’s corporation tax guide, for example, has nearly trebled in length in the last decade. It now has a word count not dissimilar to the complete works of Shakespeare. The TPA amusingly illustrates the farcical scale of our tax code by showing that one of the fastest readers on the face of the Earth would take five days to read it out loud.  Goodness knows how long it takes to understand it“. Mark Littlewood: IEA blog 16th August 2011

Er.. And again a month later…

“The UK’s tax rules are now so complicated and lengthy that British businesses spend around £20bn a year simply trying to comply with the rules . Not handing over a single penny in tax, just filling in paperwork and attempting to calculate their liabilities. That’s an overall cost of around £300 for every man, woman and child in this country every year.

“Things are getting worse, not better. When a country’s tax rule book is five times longer than the complete works of Shakespeare – and growing – you can only expect this kind of ludicrous waste and inefficiency. If the laws of association football were this long and confusing, you’d probably need hundreds of referees at every game and it’s doubtful the sport would be viable at all” Mark Littlewood: Mail On Line: 29th September 2011

Littlewood’s answer to the problem – simplify the tax code by employing best practice from other countries. That (according to Professor Philip Booth (IEA)) would save about £5billion in regulatory costs but also disproportionately assist small businesses being crippled by the burden. It would, of course, also eliminate a lot of the highly complex loopholes much beloved of the rich.

Clegg’s answer to the problem – introduce another tax!  If it was April the 1st I would be laughing. It isn’t and I am not.

Any chance that Clegg’s bizarre approach to this (much-publicised) problem is connected to a certain event being held in Gateshead this weekend?

Tags: business, IEA, Liberal Democrat conference Gateshead, Liberal Democrats, Nick Clegg, Philip Booth, small business, SMEs, tax, tycoon tax

Mark Littlewood: Liberal Voice of the Year

Congratulations to Mark Littlewood, formerly of this parish, for winning LDV’s Liberal Voice of the Year.

As we posted hear a couple of days ago, we thought Mark was a deserving candidate – but even we were somewhat surprised by the decisiveness of the vote.

Mark Littlewood 32%

The Occupy Movement 13%

Ken Clarke 13%

Mohamed Bouazizi 11%

Nick Davies and the Guardian 10%

Ai Weiwei 8%

Hugh Grant and the Hacked Off Campaign 6%

Hilary Rodham Clinton 4%

Barack Obama 3%

Tags: IEA, Lib Dem Voice, Liberal voice of the Year, Mark Littlewood

Government priorities gone bananas

I was reading Professor Philip Booth’s excellent blog post yesterday on David Cameron’s red tape challenge to ministers. Here is an extract that caught my eye.. (emphasis is mine) .

“Of course, this is just what we need – more employment regulation. It comes in a long line of announcements and enactments over the last two weeks about executive pay, council house tenancies, the disastrous implementation of the moratorium on employment regulation for small firms, alcohol regulation, the extension of employment rights to temporary workers and the regulation of the scrap metal industry. I am wondering if I have misunderstood the government’s red tape challenge – is the challenge to ministers to produce as much red tape as possible? “

And I found myself cheering his point that..

“If somebody is not very clever but good at building networks, why should they be looked down upon more than somebody who is clever but not good at building networks? The hard work that one puts into networking is not obviously less virtuous than the hard work that one puts into developing one’s intelligence. The good luck that comes from being born with a good brain is no more virtuous (indeed it is not virtuous at all) than the good luck that comes from being born with a set of well-networked parents.”

But that is perhaps because I was not a particularly brilliant scholar but had “the gift of the gab” (though sadly no “connections”). Goodness only knows what job I would have ended up with if my application had gone in “blind” rather than me tracking potential bosses down to seedy pubs to pester them into giving me an interview.

Professor Booth’s point is not that dissimilar to a point I made recently. Why is it that Government seems happy to go after highly paid bankers and CEOs on such issues as bonus’/ pay differentials etc whilst ignoring the vast sums earned by Premier League Footballers, pop stars and the like?  After all the pay differential between the average Manchester United fan and their top players is vast – and the penalty for failure? they get transferred to another team quite often for even more money. Why is it, I wonder, that it’s OK to earn fortunes because you are good at kicking a ball about – but not if you happen to be masterful at running a company? (Note this is NOT a demand that the Government starts meddling in sports pay as well.)

But returning to David Cameron’s challenge – maybe it is time for him to reconsider giving a wider challenge to ministers and put it in really simple terms – since they do seem to be having trouble grasping the point.

“If it doesn’t cut costs, improve effeciency or help business get the economy going, then JUST DON’T DO IT – unless there is a bloody good reason why you have to – Dave”

I know ministers like their headlines, feel the need to be seen to be doing something, but really! Most of us are sitting in our homes wondering what the hell this government is up to? What we want are jobs, an economy that gets going, the clearing of our debts. What on earth has alcohol regulation or executive pay got to do with any of those things?

Mark Littlewood has been asked by the Government to help them on red tape. Perhaps the Government needs a similar expert to help them sort out Government priorities – ( I say “expert” all we need is a person with an ounce of common sense and a large red pen). Here is one example concerning my current hobby horse. Why is Andrew Lansley devoting vast amounts of time, money and resource undertaking a consultation on tobacco plain packaging, when we can sit back for six months and wait for the REAL evidence to come from Australia (where plain packaging is about to be introduced). With the time and resource released he could devote that to sorting out the current crisis in the NHS now- and return to plain packs if/when the evidence from down under suggests that it warrants it. It’s just about priorities. Surely?

Enjoy Professor Booth’s musings – definitely worth a read.

Tags: Andrew Lansley, David Cameron, IEA, Mark Littlewood, Professor Philip Booth, red tape challenge

David Laws interview now available to view

For those of you unable to attend (or just want to watch again) Mark Littlewood’s cracking interview with David Laws MP at the IEA last week, the video is now up. My favourite line from David Laws.. “The Lib Dems… are the party that best fuses social justice and economic liberalism”. Overall however, you will notice that it is a rather cautious David that turned up for the event. This is no bad thing in my view. As much as David might loathe speculation about his return to the front bench, his answers and demeanour on the night suggest we may be getting closer to just such an announcement.

Go to IEA to watch video.

Tags: David Laws MP, IEA, Mark Littlewood

Gloves off: Littlewood v Laws

Hat Tip: This is surely an event not to missed? Stuff David Haye vs Wladimir Klitschko … This is Mark Littlewood face-to-face with David Laws MP. It promises to be THE interview of the year. Yep that’s right … David Laws has agreed to meet Mark Littlewood for what promises to be a splendid evening of cross examination and inspection.. We can’t wait..

WHERE: IEA, 2 Lord North Street, London, SW1 (door on Great Peter Street)

WHEN: 22nd November, 6.30pm

HOW TO GET A TICKET: email iea@iea.org.uk

WANT MORE INFO: go to the IEA website

Tags: David Laws MP, IEA, Mark Littlewood