Urban Fathers' Liberation Front

Confused dads working out the city

Carr Tax

on June 23, 2012

There’s plenty in the media at the moment about tax, largely on the back of our Prime Minister’s decision to drag one person’s tax affairs into the national spotlight. This has prompted thoughts on whether this was right (eh, no), whether rich people should pay more tax (well, probably), and whether more of us would seek to avoid paying tax if we could (well, probably, again).

I’ve been an employee for most of my working life, and have had the good fortune to have had no periods of unemployment.  As such, my tax affairs have been relatively straightforward, and I’m no tax expert.  Having formed a new company recently, this has all changed.  I am now liable for Corporation Tax, but not for a little while, and this is dependent on the company running a profit.  Having formed a company, I do have to get an accountant to verify my accounts when I submit my returns.  I have sought to find one, and in doing so, I have already been advised on how I should structure my accounts in order to minimise the tax burden, all of it legal.

But it is not paying tax, or the legal processes that are available to minimise tax, that perplex me.  I’m not even that concerned that there are slightly dodgy means – seemingly still legal – that wealthy comedians and others might use to limit their tax obligation still further.  There are two things that really perplex me.

The first of these is rather dull.  I do wonder why we need a higher tax bracket to capture more money from the higher earners, just because they have more money.  Surely if everyone is taxed at the same level – say 25% – then this would be a fair and equitable method that no-one could feel aggrieved by.  The contributions are then proportionate to earnings, whatever those earnings are.

But secondly, I can’t for the life of me work out why the bigger earners feel that they have to find ways to reduce their tax burden.  They are, by definition, the people who are most able to pay it.  People in this country (perhaps grudgingly) work to ensure that they pay their dues and understand that the tax burden is there for the good of society as a whole, even if this means scrimping and saving from month to month.  Most people get by on what they can earn and put aside.

What’s really depressing is that people who earn millions, and clearly are successful and able to live without financial concerns, are seemingly so petty and greedy that they have to find ways to keep more of their money, money they may not even need, thus denying the country and it’s infrastructure the funds it needs to make improvements for the benefit of everyone.  What is it in the mindset of some wealthy folk that they feel justified in doing this?  And whilst some super-rich will pay their taxes, and give generously to charities, this doesn’t soften the impression that those with means way above the average person will seek to deny society to ensure they keep much, much more.

I sincerely hope we see more grovelling apologies from people who were quite happy to avoid tax, but who are suitably embarrassed because they’ve been found out.

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2 responses to “Carr Tax

  1. bethsaysboo says:

    Admirable stance on Tim Minchin’s Twitter feed about this, seemingly proving that not all comedians, or wealthy folk, seek to avoid tax. It’s not everyone, and I hope that I didn’t suggest that it is.

  2. papaleach says:

    This is a selective approach which singles out Jimmy Carr and leaves unmentioned similar tax deficits of less widely known but significant evaders and “non domiciles”, no doubt including Tory party donors and so on. Cameron seems incapable of seeing as partisan his own selective approach, (as in other areas such as referring Sayeeda Warsi to official censure for her relatively minor misdemeanor of the ministerial code, but not Jeremy Hunt). HMRC told the Independent the Jimmy Carr scheme was just ‘the tip of the iceberg’. The slowly emerging facts about numbers of uncurbed blatant tax evading arrangements between government itself and many of its higher earning ’employees’ is shocking. It has been going on under both Labour and the coalition. Its seems to indicate that higher earners in management and administrative levels think they deserve different tax treatment to the ordinary masses. And that those arrangements were sanctioned by officials at similar levels in Government, indicates a ‘mindset’, not a minor aberration. It’s as much a part of the phenomenon of so called “entitlement culture” as the claiming of benefits. Since this issue was raised, Mr Cameron has moved his attention to young people’s housing benefit, with the aim of tackling this so called culture of entitlement. He and commentators and thinkers on the right are always looking downwards when they conceive of this. But it’s the same culture that allows venture capitalists and hedge fund managers to see healthy companies, their assets and pension funds as fair game for their manipulative speculation for private enrichment. In this debate he says he wants to initiate, I am deeply skeptical of Mr Cameron’s even handedness.
    Returning to the original issue of tax, I like Sir Robert Skidelsky’s comment on the Jimmy Car issue (also in the Independent), that the tax avoider is refusing to pay for the upkeep of the sate on which his own security and welfare ultimately depend. Such people should not be allowed to live here. (Or, I might add, be allowed to bankroll the Tory party without living here).

    (I am looking forward to Robert Skidelsky’s book “How much is enough?” which comes out this Thursday. I have been awaiting it, ever since his lecture at St Paul’s Occupy Tent City University fell on the same day that I took my granddaughter to the pantomime).

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