All the fun of the fair

My mother – herself one of two siblings – once told me that her greatest fear in bringing up an only child was how to teach me about fairness and sharing.  As it turns out, her fear was unfounded.  My father believed strongly in meritocracy, which basically meant that he came first in everything, and so I didn’t win a game of Monopoly or get first choice in a box of chocolates until I was in my twenties.  “But that’s not fair!” I would wail.  “Precisely,” he would counter, building yet another hotel on Mayfair while scoffing the chartreuse cream from the Black Magics.  I’ve often thought that repeatedly losing all of my hard-earned Monopoly money to the paternal fat-cat was the genesis of my absolute belief that those who have acquired their money through dodgy means (e.g. waiting until I had gone to the loo and then reshuffling the Community Chest cards in his own favour) should not be allowed to keep it.

Fairness is on my mind at the moment, in part because of the Bernie Ecclestone bribery trial fiasco that I discussed last week.  One of the many troubling aspects of that story is that such measures – buying oneself out of a trial – are available only to the select few who can afford it.  And I had thought that we were all equal in the eyes of the law – everyone should have access to the same justice.  Granted, some can afford better lawyers, but surely it is wrong to have a system whereby those who have more money can be offered a better outcome (e.g. a financial rather than a custodial penalty).

And – forgive me for the rambling nature of this post, but it’s my blog and I’ll whinge if I want to – this has brought me to a realisation about my personal take on tax evasion.  Regular readers will know that I am Not In Favour.  But it is always tricky when someone asks in training – and someone always asks in training – “But what about tax avoidance – that’s not illegal, after all.”  And of course they are right.  But something about tax avoidance always gets my back up, and the parallels with the Bernie situation have finally bought it to light: it’s the unfairness of it.  Only wealthy people can afford to avoid tax.  Only they can buy the advice and the research and the ongoing vigilance that is needed to be a successful avoider of tax.  The rest of us are too busy earning a living to be able to spare either the time to do our own avoidance, or the money to pay someone else to do it for us.  So, just as Bernie’s millions bought him access to an outcome denied poorer defendants, those with pots of money can buy their way into a special VIP tax zone denied the rest of us.  My tax hero of the week is the actor Stellan Skarsgård (the one with the bare bottom in “Mamma Mia!”), who was asked in an interview about his views on taxation:

Mr. Skarsgård, where do you live?

I live in Sweden because the taxes are higher, nobody is starving, good health care, free schools and universities.  It’s a civilized country and I like that.

You prefer paying higher taxes?

Of course.  If you make a lot of money like I do you should pay higher taxes.  Everybody should have the possibility to go to school, and university, and have good healthcare.

And his bottom’s not bad either.

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6 Responses to All the fun of the fair

  1. Shaun Baker says:

    Hi Sue,

    Interesting – but you will never get around the subject of “tax planning”

    The Governments make the rules and the Accountants look for the loopholes.

    Unless they bring morals into scope you are always going to be faced with this dilemma!

    Regarsd

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  2. Hi Shaun
    Ah yes, I had forgotten that phrase “tax planning”! You.re right, of course: as long as there are rules, there will be people trying to get around them. And legislating for morals is the Holy Grail.
    Best wishes from Susan

  3. Derrick Paterson says:

    I put money into my ISA at the beginning of the tax year because it saves me more tax than putting it in at the end. Does this tax avoidance make me a bad person?

  4. Now, I’ve just been having a discussion with my husband about this very question, Derrick – are ISAs tax avoidance? And we came to the conclusion that the key factors are (a) does the government encourage you to participate in ISAs (which it does – because it serves their other purposes to have us self-supporting in our dotage, I guess), and (b) would you use the word “loophole” when talking about an ISA (which I don’t think you would)? It’s not easy to explain the difference, but I think we’re back to the shadings and gradations of tax planning vs avoidance vs evasion.
    Other things may make you a bad person, Derrick, but probably not investment in ISAs.
    Best wishes from Susan

  5. Claire says:

    I agree with Mr Skarsgård. One of my best friends lives in Norway, another one of those high tax countries. My friend is Syrian, lived in Belgium for many years (that is how I met her) before moving to Norway with her second husband. She has 3 children, one with special needs and one gifted child. She always tells me how happy she is to pay such high taxes, because she gets so much in return (we are constantly comparing notes, and yes, she wins!) Because government officials don’t screw the tax payer, like happens in so many countries (eg no luxury cars/ offices, they take public transport, no expensive lunches and dinners), people don’t avoid tax as much. Here we are always looking for ways to pay less tax, because we feel cheated all the time. Yes, those big companies are getting away with tax avoidance. They make more money, and the employees are earning less and less. When they get caught up in one of their little schemes, like you said, they just pay their way out of it. The ordinary tax payer gets totally screwed when he gets caught. Small businesses barely surviving go broke. There is something wrong with the system.

  6. That’s a very interesting point, Claire – that people might feel less like cheating the system is they didn’t believe that the system was already cheating them!
    Once we have our register of beneficial ownership, might there be some appetite for a register of tax liabilities, so that the big corporations have to make a public statement of where and how much tax they have paid…?
    Best wishes from Susan

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