So very much has already been written about the tax avoiders, not just Philip Green, Boots and Barclays but the charmers who earn 'only' around £200,000 and think it's just NOT FAIR that they have to pay so much tax - the people who'd rather pay a little to a smart accountant and a bit to a tax lawyer than the full whack to the inland revenue.
David Mitchell pretty much nailed the point here. To very briefly summarise - why should anyone pay any more tax than they have to? The averagely paid don't voluntarily stump up extra money for the taxman so why should the rich be expected to do so? As he correctly points out, the fault lies entirely with the government for providing these loopholes. The argument that they do so in stupidity and are amazed to find the loopholes exist doesn't entirely hold water because the obvious rejoinder would be to enquire why they don't just close them. Er, could it be because they don't want to?
As already mentioned on this blog, I recently visited an excellent exhibition about the early years of the band Queen (it's only on for another three days (including today), so you've got till Saturday 12 March to visit - more information here).
Around the time of their third album, the band members noticed that they were still being paid £60 per week, Freddie was being told he couldn't have a piano (but that they could rent him one) and Roger was being asked to stop hitting the drums so hard that he was breaking the drumsticks because replacing them, apparently, was an unbearable expense. They certainly wouldn't have stumped up to buy Brian a new fireplace. The managers of the record company were simultaneously doing things like buying their third Rolls Royce or installing more swimming pools in their homes. The penny dropped (or rather, the pennies weren't dropping, ha ha) and the band began a lengthy process of extracting themselves from this exploitative situation.
(A few of the details above may be incorrect - I'm not trying to remember the definitive record, just the key ideas.)
Now, in principle, this is not a terrible approach to business. Record companies invest in a large number of musicians and, while some bring in untold fortunes, most pootle along earning little (or maybe nothing) until the company loses interest and drops them. Depending on the ratio of money-minded managers to artistically-minded managers, this may take a while or may happen quickly. Either way, there must be some cross-subsidy going on here - the successful bands must expect to pay out a (fair) percentage of their megabucks to the company so that it can continue to take risks on new acts. After all, there are probably bands as talented as Queen who never earned very much at all due to bad luck, or bad timing. Queen themselves had a major setback when Brian May was struck down with illness on their first American tour - I imagine many bands would not have recovered (artistically or financially even if medically) from something like that. It was only the continued financial help from the record company which took them to a place from which they could conquer the world.
Clearly I'm not condoning the supertax that Trident Records continued to levy far beyond the point of reason but what would happen if Queen had soaked up the starter capital from Trident while struggling and then, as soon as the money started pouring in, had refused to pay anything more to Trident and employed fancypants lawyers to make sure of this? I suspect that Trident wouldn't have lasted and, if such practice had been common, they would have been killed off long before they started working with Queen in 1971.
And yet that is how the super-rich behave with regard to taxation in this country. Consider the United Kingdom to be a massive venture-capital organisation. The country puts up the money for each and every one of us - it takes the colossal financial risk of education, health-care, roads, telecoms, airports, railways, utilities, etc, etc for each and every one of us.
A country can't act like a record company and simply drop the people who aren't going to bring in massive profits - it has to look after us from cradle to grave. And part of the social contract is that the rich pay their taxes properly - they subsidise everyone else - that's how they pay back the huge investment that was made in them and how they ensure that future generations can also benefit from a similar investment.
How long would venture-capital funds last if the successful businesses could simply run away and hide in a foreign country, continue to pull in large sums of money but refuse to hand over the agreed percentage? How long can nations function in any meaningful sense if they keep providing hiding places where the rich stash their money and then acting like they can't see it?
David Mitchell is right - the law needs to change - but, for this to happen, there must be the political appetite for it. Clearly, there is overwhelming public appetite for it - but governments don't care what the public think. There is only one way to change the situation and that is for the general public to be able to hide their money the way that the super-rich can enjoy.
I know very little about tax law, tax shelters, holding companies and all those other funny words rattled out on the news and in conspiracy theory films. However, somewhere out there is someone who could explain how the little people can shirk their taxes like the big boys. (The next sentence is me making it up as I go along.) Perhaps we need to establish an off-shore umbrella holding company which can employ millions of ordinary Brits and then subcontract their services to their regular employers, charging their usual salary but siphoning it through a tax efficient shell company before remunerating its theoretical employees in dividend payments. Perhaps we don't.
However we do it, once the little people are doing what the big people are doing, a change will have to come. Political appetite will not change by the public shouting in the street - not while the corporations are lobbying governments about how their employees couldn't be expected to get out of bed in the morning if they only earn 60% of a fortune instead of all of it. Political appetite will change when the tax gathered by the inland revenue slumps and no one is breaking the law.
Pros: Massive, legal protest. Everyone saves a few quid on their tax bill for a while. Law change to properly close many tax loopholes.
Cons: Country may go bankrupt - but with any luck the government wouldn't attempt to butch it out but would make the necessary changes quickly, thereby preventing anarchy and finishing with a substantial increase in funds to the exchequer.
Over to the experts - come on people - let's make this happen.
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