I’m not quite sure why such a fuss is being made about this 50% tax band. Everybody knows that pays no taxes at all. The cradle of democracy has a fiscal system so corrupt that it not only distinguishes between ‘evasion’ and ‘avoidance’ but positively encourages the former. Of the seventy tax havens round the world, thirty are in British territories, or Commonwealth or Crown dependencies. Indeed, the recently declared Britain itself to be a tax haven – presumably, from them, a compliment.
So the first result of this development will be a new black economy.
And the poor buggers who get clobbered are those foolish enough to be on PAYE: the people behind the counter in job centres, despised social workers, street cleaners and carers. What’s this going to do to them? Make them cross. What do cross workers do? Go on strike. Welcome back to the Seventies.
Okay, you know all this. What you may not know is that tax fraud is just as successful when it’s disguised as Third World aid.
Aid is often badly managed, in fact, according to the a quarter of British aid projects in conflict zones lose substantial amounts of money through fraud or poor management. Bad enough when it’s accidental. But the whole idea of aid is riddled with deliberate corruption.
Most Third World countries have enough resources to feed themselves, if they were allowed the benefit of them. But trade barriers and tariffs eat up that should go to from us to Third World countries. That’s one and a half times the total aid bill, and four times what will be needed to meet the Millennium Development Goals.
Those barriers are ‘legal’, at least in the sense that governments endorse them. But there’s another £100bn in routinely practised by multinational corporations, whose internal transactions – deals between one bit of them and another – form over half of all global trade.
They cook their internal books to make prices seem lower, so their tax liability is less. They gang up with other companies to issue falsely low invoices and split the proceeds. And all too often the licences they get for exploiting resources come with massive tax breaks, so almost none of the proceeds end up staying in the country.