2017-11-10 Tax

Tax is the price we pay to live in a civilised society. There are many things we rely on which we cannot just buy over the counter – the Police, schools, the National Health Service, roads. The most accountable way to pay for these things is by tax, because we have democratic local and national government to decide on these taxes. As you have to pay taxes you should have some sort of say over what they are and how they are levied. When we vote we should ask ourselves:

  • Do I want more or less money to be spent on the things that taxes pay for?
  • Do I believe that the person or Party I am voting for will spend tax money on the things that matter to me?
  • Do I believe that the person or Party I am voting for will seek to raise those taxes from people who can afford to pay them, and on goods or services which ought to be taxed, or will the burden be disproportionate?

Tax gives democratically elected government the chance to promote the values that they have been elected for. It enables society as a whole to invest in things which will benefit us all in the long term – such as a well-educated and well-trained workforce – rather than relying on individuals to spend money on things which only benefit each of us individually in the short term.

Most of us accept that we need to pay taxes. But we also need to know that the tax system is fair. We need to be sure we won’t be asked to pay more tax than we can afford, so we have graduated rather than flat taxes – those who can most easily afford to pay get to pay the most. Above all we need to know that everyone is going to pay their taxes – otherwise, why should those who struggle to make ends meet have to shell out while those who can easily afford to pay more choose to find ways round the system?

Over the weekend, news emerged that super-wealthy individuals and the companies they own have managed to avoid paying £BILLIONS of pounds in taxes. Working together, journalists from around the world have exposed the schemes by which thousands of rich and powerful people have avoided paying for the society which has benefited them so much.

Firstly, of course, this deprives the state of money which we could use to invest in our future. Around £600 Billion was shifted offshore by multinational corporations last year alone. With a concerted effort to close tax loopholes, and with a determination to employ the HMRC inspectors we need instead of cutting them, we could collect £100 Billion extra each year in the UK from the super-rich. We could build a million new homes AND the best NHS in the world AND make Universities and Colleges free AND restore Police forces numbers AND build railways and roads and flood defences.

It’s also about the power that all that extra wealth has put in unscrupulous hands. There is evidence that Putin and the Russian government have used tax haven money to influence the West. Russian money was spent on President Trump’s election in the USA, and on the Brexit Referendum here in the UK, although it is not obvious that made any difference. We should ask to what extent media moguls like Rupert Murdoch might adjust the line taken by their papers to fit in with their own use of tax havens. And tax haven money has been used to fund political parties too – some far more than others.

Multinational corporations can employ lawyers and accountants to avoid tax, but small or medium-sized companies in Suffolk cannot. This puts them at a massive competitive disadvantage. We must have a tax regime which does not penalise the small companies that are the lifeblood of our economy while letting giants like Amazon and Apple and Facebook get off scot free.

Shamefully, many of the tax havens are British territories – Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey and Guernsey. It is time for the British Government to act. Ordinary decent people should not have to pay their taxes and then stand by while the super-rich pay next to nothing. Everyone needs to pay their fair share, and I will publish my taxes on my website. I will be arguing for fairer taxes and tougher enforcement – and that means an end to the loopholes.