Enough is enough, it’s time to pay your fair share of tax
14 June, 2019
‘Not retrospectively taxing is more a slippery slope to lawlessness than vice-versa’
• I AGREE “ret tax” [retrospective tax] is not ideal, (Tax bill like being hit with 15 years of parking tickets, June 7). But every word on the taxation statute has a single aim: to enforce taxation.
Over the years, certain behaviours have rightly been encouraged (saving, retirement funding, investment in certain areas), and this has caused tax law to become complex enough to leave unintended loopholes.
For tax law specifically, an exception must be made. There cannot be one rule for most and another for those who can afford to hire specialist accountancy firms.
For decades, the rule of law when it came to taxation did (de facto) not apply to the wealthy – see Warren Buffett admitting he pays lower tax than his secretary. It is completely unacceptable in a supposed enlightened democracy.
It is simply impossible to legislate against every conceivable future way to avoid paying tax. Large, sophisticated law and accountancy firms will always find loopholes and the public exchequer will always lose the arms race.
Not retrospectively taxing is more a slippery slope to lawlessness than vice-versa. There isn’t any other way of effectively collecting tax in a sophisticated economy than to ‘ret tax’.
Keith Gordon may argue that the tax system should be simplified by removing loopholes. I agree that reducing tax complexity is always a virtue, but this is utopian. The world will never be sufficiently simple for tax loopholes to cease to exist.
‘Ret tax’, as was introduced with the General Anti-Abuse Rule (GAAR) contained within the Finance Act 2013, is a catch-all for those who engineer extreme methods to avoid paying tax.
Complicated schemes such as EBT are usually based in offshore tax-havens, where the Tax Justice Network estimates $21-$32trillion of private wealth is secretly held.
‘Ret tax’ is an important tool in the fight against the burgeoning kleptocracy we consider our lawful democracy. These schemes serve no public good and are only designed to reduce contribution to the public purse. They are now exposed for what they are – conniving dodges allowing you to escape your responsibility to society.
That said, I do have sympathy with those clobbered for retrospective tax prior to the new statute’s introduction. There is a strong argument in favour of an amnesty for those who were badly advised and entered schemes prior to this. I hope common sense prevails and those affected are treated with compassion.
The question is whether to continue as we did for decades, feebly closing each loophole one-by-one, continuing to play poker against the tax-avoidance industry’s loaded deck, or, with a single stroke, to say: “Enough is enough, just pay your fair share and do something productive with your lives.”
If there’s no explanation for your financial decision other than to avoid tax, then you have no place to hide. Mr Gordon arguing against ‘ret tax’ in principle is not the answer, and will not help his clients’ cause.
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