Parliamentary Sketch – A Taxing question for you

So, the rich and famous pay less tax than everyone else. Of course, we’ve always suspected this to be the case.

But news that the most wealthy can leave the management of their financial affairs to handsomely paid advisers who use lawful “tax efficient” models to ensure they pay as little as 1% of their income in tax is a reminder that rich bankers weren’t joking when they boasted that they were paying less tax than their cleaners!

Those members of the league of superrich who don’t require public approval for their success – bankers, hedge fund managers, etc – are largely immune to the pressure of public “naming and shaming”. They can comfortably “brazen it out”.

However, high profile comedians and the famous who crucially depend for their success on their public approval ratings and support are much more susceptible to moral pressure. The media could help; ensuring, of course, that all of their own celebrity writers, presenters and senior staff haven’t any overseas tax haven skeletons and other tax avoidance ruses in their own cupboards. Perhaps “naming and faming” those wealthiest who sign a pledge that they are a fully paid up member of the “we’re all in it together” league of tax payers chipping in for the recovery.

That this hasn’t happened so far is troubling. We shouldn’t depend on occasional and one off ritual humiliation of individual celebrities to create the moral pressure to encourage others to stop lawful tax dodging.

The only other measure a Government can take to make sure that tax avoidance isn’t rife amongst those who are best able to pay their way is the poacher turned gamekeeper approach. That is to employ those same handsomely paid tax lawyers – whose role in life is to find the holes in the system for their wealthy clients to exploit – to help write the system themselves.

That may seem obvious and, in any case, may end up with a monstrously complicated and bureaucratic system which will be difficult for the majority of honest citizens to navigate.

Anyone know a pro bono tax lawyer?

26th June 2012

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