At my venerable age I ought to have lost any capacity for being astounded by politicians’ effrontery. And so I have, except that Dave Cameron manages to restore some of it with metronomic regularity.
This time he has launched a moral crusade against tax avoidance, using the comedian Jimmy Carr as his whipping boy. Now my understanding is that there exists a valid distinction between tax avoidance and tax evasion. The former is legal; the latter isn’t. And it’s legality rather than morality that politicians are supposed to uphold. For them to comment on the morality of legal tax shelters is akin to Dr Shipman enlarging on the fine points of care for the elderly.
Now in the moral gospel according to Dave, our money doesn’t belong to us. It belongs to the government, which decides how much of it we can keep for our families. At present, middle-class people are expected to keep less than half of what they earn in the sweat of their brow. The state confiscates the rest and wastes most of it on schemes ranging from unnecessary to ill-advised to idiotic to downright subversive.
It’s hardly surprising that most taxpayers don’t share this concept of morality. The more savvy among them explore, with the help of their accountants, every possible way of resisting state extortion as best they can. According to Dave, this is ‘quite frankly morally wrong’.
Dave is willing to admit under duress that ‘there is nothing wrong with people planning their tax affairs to invest in their pension and plan for their retirement – that sort of tax management is fine.’ That is, it’s fine now, when focus groups have told Dave that his original plan to tighten the pension loophole wouldn’t be well received. Alas, because those bloody wrinklies now tend to live longer, they are too numerous to ignore. Their vote can make or break even such an impeccably moral politician as Dave.
Other than that, rest assured that this self-described ‘heir to Blair’ feels about private pensions the same as his role model does. Blair’s first act was to launch a five-billion-pound assault on pension funds. Given half the chance, Dave will live up to Tony’s legacy, but not just yet. For the time being he has to count on his general economic policy, rather than specific raids, to reduce private pensions and other savings to dust.
I’m not going to comment on the specifics of the particular offshore shelter from which Jimmy Carr has benefited. Nor will I compare it to other shelters collectively described by Dave as ‘very dodgy tax avoiding schemes’. As far as I’m concerned, if they are legal they aren’t dodgy. And if they are illegal, they are the business of the CPO, not of our morally crusading Prime Minister.
He and other politicians correctly see every pound left in our pockets as a threat to their power. Economic independence isn’t the same as political liberty, but they largely overlap. Since our state isn’t so much a democracy as a spivocracy, taxation is for it more than just a means of sustaining its solvency. It’s a weapon for the spivocrats to increase their power in relation to private individuals. Regarded in that light, every man who’s clever enough to shield his income from Dave’s grubby hands is committing a moral act.
My hat’s off to Mr Carr, and more power to him. But there is a way for Dave to give his flaming moral sense a rest, at least on this issue. It’s called flat tax.
Charge everybody a flat rate of about 20 percent on any income above a £10,000 personal allowance, permit only legitimate business deductions, and no problem, moral or otherwise, with tax avoidance will ever arise. I can’t calculate the precise effect of such an arrangement on the Exchequer, but people who can, Nobel-winning economists among them, assure us that, at worst, the state will break even on the revenue thus derived. That means it’ll come out ahead, as the need for costly tax-collection efforts will be vastly reduced. Even more important, Dave won’t be tossing and turning at night, kept awake as he is now by affronts to his morality.
If the purpose of taxation were strictly economic this would work famously. But since extortionist taxes are there to send what Vince Cable calls ‘an important message’, that is who’s boss, and to whom our money really belongs, a flat rate will never happen. Never mind that progressive taxation violates the founding principle of Western justice, that of equality before the law. We’re not about legality here, are we? We’re about morality, as defined by Dave and his jolly friends.
The American writer HL Mencken once said that ‘the state remains, as it was in the beginning, the common enemy of all well-disposed, industrious and decent men.’ Dave must be a Mencken fan – he does his level best to prove him right.