Fairness of Taxation

[Javert]

Possibly.



In the first paragraph I tried to advise that the the best way to avoid tax is to be self employed and thus retain as much control over your income as possible. In the second I suggested that the best way to do this was to keep your head down and mouth shut. It worked for me and my various sidelines  during my working life, but it may not work for you

I guess the key question is - should you be trying to avoid tax in the first place?  



You could suppose, that in the 1950s, most very rich people accepted that it was their moral duty to pay a lot of tax.  Today, we seem to have a lot of rich people who think that because they are rich, they shouldn't have to pay any tax at all  :crzy



That said, I'll grant you there are lots of poorer people also trying to avoid tax, but at least some of them can argue that they are short of money.



Of course there may be other explanations also like maybe in the 1950s it was much more difficult to avoid paying tax.  I don't know - that's partly why I started this thread.



As someone on a pretty high income, I've always believed that people on higher incomes should bear a bigger share of the costs of the country.  As I've got older it seemed like my attitude was more and more unusual, which in my view is not a good thing.  It was kind of replaced by an attitude of "everyone richer than me should pay lots of tax, but not me personally".

[Borchester]

Shrug away internet forums are low hanging fruit for HMRC.

No they ain't.



HMRC does not have the resources to conduct the level surveillance of popular fantasy. Its major sources of information are ex wives and girlfriends who are invariably know as much if not more about the average punters finances than the taxpayer himself. And even when Ms White Hot With Girlie Rage does ring up, the case is invariably long and expensive and produces nothing because the defaulter has spent the money on another piece of tottie.

[Borchester]

Maybe I am misreading, but you seem to be making two opposite arguments in two consecutive paragraphs.  Have you adopted BBC rules of impartiality?

Possibly.



In the first paragraph I tried to advise that the the best way to avoid tax is to be self employed and thus retain as much control over your income as possible. In the second I suggested that the best way to do this was to keep your head down and mouth shut. It worked for me and my various sidelines  during my working life, but it may not work for you

[Javert]

Everyone wants schools and hospitals and police and someone else to pay for it.



The best way to reduce your taxes is to be self employed and to keep your mouth shut. That way you can put your wife down as an employee and your mistress as a business expense. HMRC's resources are finite and provided you aren't standing  outside the Tax Office shouting the odds, then it is very unlikely that anyone's flights of fiscal will be picked up on, let alone pursued.



And don't quote any fine points of law because they rarely exist. And when they do the case just gets kicked further and further upstairs. You may be lucky and have HMRC drop the matter. But as often as not the guys at the top will be delighted. Most tax legislation has holes in it and HMRC is often happy to have the courts run the rule over it. Unfortunately for the average taxpayer, HMRC usually has deeper pockets than they do so can drag a case out until the opposition is either broke or exhausted or both.

Maybe I am misreading, but you seem to be making two opposite arguments in two consecutive paragraphs.  Have you adopted BBC rules of impartiality?

[papasmurf]

Of course it will Pappy, of course it will. :shrg:

Shrug away internet forums are low hanging fruit for HMRC.

[Borchester]

I suspect after reading that HMRC will be tracking and tracing you.

Of course it will Pappy, of course it will. :shrg:

[papasmurf]

The best way to reduce your taxes is to be self employed and to keep your mouth shut. That way you can put your wife down as an employee and your mistress as a business expense. HMRC's resources are finite and provided you aren't standing  outside the Tax Office shouting the odds, then it is very unlikely that anyone's flights of fiscal will be picked up on, let alone pursued.

I suspect after reading that HMRC will be tracking and tracing you.

[Borchester]

Everyone wants schools and hospitals and police and someone else to pay for it.



The best way to reduce your taxes is to be self employed and to keep your mouth shut. That way you can put your wife down as an employee and your mistress as a business expense. HMRC's resources are finite and provided you aren't standing  outside the Tax Office shouting the odds, then it is very unlikely that anyone's flights of fiscal will be picked up on, let alone pursued.



And don't quote any fine points of law because they rarely exist. And when they do the case just gets kicked further and further upstairs. You may be lucky and have HMRC drop the matter. But as often as not the guys at the top will be delighted. Most tax legislation has holes in it and HMRC is often happy to have the courts run the rule over it. Unfortunately for the average taxpayer, HMRC usually has deeper pockets than they do so can drag a case out until the opposition is either broke or exhausted or both.

[johnofgwent]

Back in 1999, when I complained to my inspector of taxes that two gays and two lesbians personally known to me had transferred 95.1% ofvtheir shares to their partner in bed so as to avoid IR35 which specifically treated an unmarried man and woman living together as 'connected persons' but did not make the same for same sex couples, and therefore this was a clear breach of the taxpayers charter opening statement to treat all taxpayers with equal fairness, the guy decided he wasn't taking this in the chin and sent my complaint all the way to head office.



About a month later Elaine Carey, Dawn Primarolos political gopher wrote to me flatly denying this despite it being in the press release that ONLY a MAN and a WOMAN living together would be so treated, but was her final line that cracked me up



"The taxpayers charter commitment to equal fairness dies not mean two people in the same circumstances will pay the same amount of tax..."



Said everything I needed to know about the revenue scum

[Borg Refinery]

By the way, the tax rates don't really need changing, as you can see tax revenue as a % of nat. income drops several times when tax rates are raised. The problem is collecting the tax and defeating the avoidance measures and armies of lawyers, accountancy firms and banks cleverly hiding money.



That's where the real issue is, the tax rates could stay where they are if all tax was collected.

[Borg Refinery]

I'm not sure if this has been posted before, but I found this chart quite striking.



There is an animated version of this somewhere online, but basically it shows the evolution of tax rates for the US between 1950 and recently.  You can see how in 1950, the richest people in society paid a lot more tax as a proportion of their income, but the tax rate paid by the poorest people has remained remarkably constant, whilst the tax rate paid by the rich has been steadily eroded.



Most striking of all is that in very recent times, the absolute richest in society have been paying less tax as a % of income than the poorest.



https://i.ibb.co/ctZqPb3/Tax-Rate-USA.png">

Good thread, I posted this to the yanks on some other forum -



https://ibb.co/fkNK2Gk">

https://ibb.co/Ln1nWrr">

https://ibb.co/x58CZ9M">



"Kind of strange how the 1950s - the US 'golden age' - was configured tax wise.



I guess Dwight was a darned commie too.



..And LBJ appears to have presided over one of the largest drops in the top rate of income tax."



Someone replied (typical yank stuff  :crzy ):



"The rest of the competition was destroyed by WWII and we were rebuilding Europe with Marshall aid.  Airlifts aren't cheap."



Anyway, I pointed to this;

Challenge

Tax competition may be an important tool to attract investment, but more often than not it undermines the capacity of governments to mobilize sufficient resources to finance public services – including those services that are essential for sustainable development and economic growth. Particularly harmful are tax competition practices that a) erode the tax bases of other countries, thereby diminishing global welfare, b) deny other countries the opportunity to adapt their tax regimes in response to unwanted spillovers, due to a lack of transparency of the measures, or c) introduce market distortions in favor of specific groups or actors by shifting the tax burden to the disadvantage of other groups or actors, thereby undermining the fairness and social acceptance of tax systems

https://www.g20-insights.org/policy_briefs/tax-competition/">https://www.g20-insights.org/policy_bri ... mpetition/">https://www.g20-insights.org/policy_briefs/tax-competition/



I pointed this out too. https://delong.typepad.com/sdj/2010/08/where-is-the-peak-of-the-laffer-curve.html">https://delong.typepad.com/sdj/2010/08/ ... curve.html">https://delong.typepad.com/sdj/2010/08/where-is-the-peak-of-the-laffer-curve.html



Well, that place is great (mostly) but we tend to throw the toothless limey/obese yank stuff around a lot.

[Javert]

I'm not sure if this has been posted before, but I found this chart quite striking.



There is an animated version of this somewhere online, but basically it shows the evolution of tax rates for the US between 1950 and recently.  You can see how in 1950, the richest people in society paid a lot more tax as a proportion of their income, but the tax rate paid by the poorest people has remained remarkably constant, whilst the tax rate paid by the rich has been steadily eroded.



Most striking of all is that in very recent times, the absolute richest in society have been paying less tax as a % of income than the poorest.



https://i.ibb.co/ctZqPb3/Tax-Rate-USA.png">