Wednesday, November 15, 2017

The Human Cost of Tax Evasion

The Paradise Papers have once again revealed the deviousness of the super-rich deploy to keep their money away from the taxman and avoid their obligations to support the upkeep of roads, hospitals and schools. The Paradise Papers are about vast sums of money disappearing offshore that could be spent on public services here in the UK. 

Last year’s British Social Attitudes survey asked Britons about their feelings on this issue. Analysis of this data revealed that the British public believes tax avoidance to be commonplace yet less than half (48%) thought that legal tax avoidance was “usually or always wrong”.

By contrast, more than 60% of Britons believe it is “usually or always wrong” for poorer people to use legal loopholes to claim more benefits. 

In other words, people are significantly more likely to condemn poor people for using legal means to obtain more benefits than they are to condemn rich people for avoiding tax. This is a consistent finding across many different studies. For example, detailed interviews conducted by the Joseph Rowntree Foundation in the wake of the 2008 financial crisis found that people “tended to be far more exercised by the prospect of low-income groups exploiting the system than they were about high-income groups doing the same”.

 Throughout his premiership, David Cameron, along with his chancellor, George Osborne, kept the opposition between “hardworking people” and lazy benefit claimants right at the centre of their messaging on spending cuts. Though gestures have been made towards addressing widespread tax avoidance by the wealthy, very little has actually been achieved. This stands in stark contrast to the scale and speed with which changes have been made to welfare legislation.

The 2016 British Social Attitudes survey was conducted just four months after the release of the Panama Papers. Even then, the British public remained more concerned about benefit claimants than tax avoiders.

 The money we lost because people like Lewis Hamilton don’t pay full VAT on their private jet means thousands more visits to food banks. IApple had paid more tax. Fewer people might have killed themselves after a work-capability assessment.  If companies like Alphabet (Google) had not registered their offices in Bermuda, and the downward pressure on benefits payments was not so intense.  Quite simply, people get hurt when the rich don’t pay their taxes.

https://www.theguardian.com/commentisfree/2017/nov/15/benefit-scroungers-billions-rich-paradise-papers-tax-avoidance

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