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13 April 2016

Salem 1692 - London 2016




In the late seventeenth century, around the village of Salem, in Massachusetts, there was an outbreak of group hysteria that led to nineteen people being hanged as witches, convicted on the dubious grounds that their names were cried out by children undergoing hysterical seizures. It was a classic witch-hunt, and subsequently apologies and restitution (well, if you can make restitution for erroneous hanging) were made to the families of those condemned. 

In the early twenty-first century, a leak from a firm of Panamanian lawyers inspired a hysterical frenzy of accusations of “tax avoidance/evasion” (many of the accusers seem to struggle with the difference) in London. Well, for the press, it probably sold more copies than the alternative headline, which would have been “Middle-aged man makes investment in unit trust; sells later and pays all tax due on small profit”; that wouldn’t have set Twitter alight, would it?

Incidentally, it is worth noting that in pretty much all countries where this story has been reported, the focus has been on how easily large amounts of illegal money sloshes around in some highly secretive jurisdictions, which is something that should genuinely concern us all. Only in the poor old class-fetishising UK is the little story of one small - legal - offshore entity used to whip up a storm of political point-scoring. 

So we’ve been treated to demands for the publication of tax returns, so that ‘the court of public opinion’ can make its judgement. We’ve heard all the smug remarks about how this or that choice of action passes or fails the ‘smell test’. Whether or not something is ‘morally acceptable’. The problem with that approach is that it is completely unworkable. Like many other things in a civilised, developed society, tax is legally codified. If you infringe that law, you are committing an offence, for which you will/should be punished. If you don’t, you won’t. I find it frankly ludicrous that politicians - who are, after all, the ones responsible for creating the UK’s absurdly long and complex tax code - are now seemingly prepared to say ‘ah, don’t worry about the laws we passed; we’re actually going  to use different criteria when we howl for your resignation.’

Personally, I’m not convinced by the idea of publishing tax returns. After all, were one evading tax, it’s hardly likely to show up on the very document from which the tax authorities derive their requirement. Still, it’s going to happen and it’s not going to stop with the Prime Minister and other party leaders, for example. This will trickle down, first cabinet ministers, then their shadows, then MPs generally. And then, once the political class has been drawn into the net, it’s going to spread through to those who own newspapers and other press organs, to those who manage them editorially and eventually to all those who record and report politics. And will it go beyond that? Ultimately, probably; these things have a habit of running on out of control - the law of unintended consequences. Still, it may be entertaining for the rest of us to see how some of the chatterati and autocuties manage to explain why they work full time for one employer through service companies, with the attendant tax advantages that structure brings.

It’s a shame the way this serious issue of the use of friendly jurisdictions to conceal dubious money has, as I mentioned above, been so narrowly focussed in the UK. It’s revealed some rather unpleasant ideas about the type of society some would like to live in. I hesitate to use names, but there have been a few things said which do need to be attributed. David Cameron was made gifts by his mother; according to hard-left former MP Ken Livingstone, for that he should be ‘in prison’. John McDonnell, hard-left shadow chancellor, apparently believes that gifts from parents to children should be taxed, without the current seven year exemption. Philip Collins, former Blair speechwriter, New Labour stalwart and currently Times columnist whom I normally read with interest and generally broad agreement, commented on Twitter that Cameron has done nothing wrong, but that inheritance tax should run at 100%. Taken together, those ideas paint a picture of a world I don’t like; a world where it’s somehow perceived as wrong for parents to help their children financially, where they can. Sure, it’s not going to be the same for everybody - but guess what, that’s how life is. I don’t like the suggested world where the state rather than the family is the more important relationship. Think of E M Forster’s famous lines on this.

Tax evasion is wrong - legally wrong. The amount of unidentifiable, probably corrupt, money washing around the world is a scandal. But using this current information leak also to portray normal, legal behaviour as somehow wrong - not legally, but in some other way - and to promote through whipped up frenzy a world view not chosen by the electorate of this county is deeply disturbing, as is the attendant odour of class war. A lot of the world looks at the UK as a society with deeply ingrained class distinctions; the politics of envy spouted by parts of our media and some of our politicians this last week only serves to emphasise that view. We’re ill-served by looking in the wrong direction; that didn't finish well in Salem.






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