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Bloom: Wealth creators are justified in avoiding tax
Date 25/05/2013 15:29  Author webmaster  Hits 2121  Language Global
"We are drifting into a populist witch hunt against the society's wealth creators not because they have broken any law but because they have avoided taxes to quite justifiably protect their shareholders, employees and customers by rendering unto Caesar only that which is Caesar's and no more." - Godfrey Bloom MEP, UKIP spokeman for economic affairs.

We have endured now several weeks of discussion on tax, the emphasis on avoidance and something new - 'aggressive avoidance'. This is a particularly sinister development because the cornerstone of European civilization for more than a thousand years has been the respect of property rights within a system of law. Mainly common law in the United Kingdom with an historical mix of statute.

The development of Roman law forms much of the philosophical base for modern European states. The difference between Europe and Middle and Far Eastern potentates is that not everything belonged or belongs to the king. Property rights have been the base for economic and scientific development in modern times – in other words, post medieval, which one might argue finished generally in Europe circa the fourteen hundreds; although academics might argue the point to a few hundred years.



So are we, as electorates in western democracies, prepared to render unto Caesar that which is Caesar's? I am personally a believer in small government, the roll back of the state and a tax system that raises enough revenue to maintain the nation. This includes defence of the realm, police, maintenance of the Queen's highway and the logistics of a legal system. Others take a view the role of the state should be much larger and provide cradle to grave welfare and a bureaucracy of almost astonishing depth and complexity.

One might look at the number of young men in holy orders in the 15th and 16th century in the Iberian Peninsula and compare it to the number of people who are currently employed or sponsored by the state in modern day France or Britain. The ratio then as now is about one in four or five. Unsustainable 500 years ago, as indeed I would argue it is today, especially as the modern state has to borrow to support it. Leaving all of this aside for the moment under the rule of law the state must ensure property rights or preside over a collapsing system of executive subjective decision-making.

If the state can maintain a position, which acknowledges a citizen, institution or company has complied with the law - paid the required tax but is yet subject to further tax on a decision not of law but a bureaucratic option. It is the end of tax law as we know it. We revert to the eastern potentate who may take that which he wants by force. The citizen has no protection under the law. Societies where property rights are not respected fail. They are failing today in parts of the world that are yet rich in natural resources.

We are drifting into a populist witch hunt against the society's wealth creators not because they have broken any law but because they have avoided taxes to quite justifiably protect their shareholders, employees and customers by rendering unto Caesar only that which is Caesar's and no more. Incidentally, with the full historical support of common law. We have newspapers and politicians who are jumping on the bandwagon of this mob mentality who are not just wrong in their understanding of the democratic state but highly hypocritical to the point of intellectual dishonesty.

Perhaps the most high-profile of this rather unpleasant genre in Britain is Margaret Hodge MP, one of the richest women in politics and the most expensively educated. Hodge is also chairwoman of the House of Commons' Public Accounts Committee. She quite properly has been allegedly advised to keep much of her family wealth in trust. This is quite a legitimate method of precluding the state from appropriating your property. It has enormous inheritance, capital gains and income tax advantages. I know, I used to set them up for clients when I worked in financial services.

The citizen's first responsibility is to their family. There is almost no member of the middle classes who do not take advantage of tax avoidance schemes. Anyone who subscribes to a pension or individual savings account does so. Anyone who claims tax credits or indeed any form of tax allowance does so. Enterprise investment schemes, venture capital trusts and so on - the list is endless. Yet, Hodge is typical of the modern professional politician. They manipulate the argument for short-term political gain. Her attitude to Starbucks and Google is arrogant and synthetic - in my opinion.

She tries to make tax a moral issue. It is not; it is a matter of law. If it is a moral issue, surely she must stand down from her position as chairwoman of the PAC as she is allegedly complicit in tax avoidance procedure. If she genuinely does not understand the difference and feels she is in some way not advantaged by tax avoidance, she should stand down for incompetence. As I have written many times before, alleged intellectual dishonesty in my view is more serious then fiddling 50 quid on your expenses.

Ironically, the strongest newspaper and media group supporting her stance is The Guardian. Its infrastructure is wholly designed to avoid tax, I would argue. There are very well known television presenters whose arrangements are designed to minimise their tax, many in public sector broadcasting. Tax evasion, of course, is illegal although I doubt a moral case could be made against it unless we could persuade ourselves Caesar makes better use of our money than we could ourselves, I have yet to be persuaded.


www.publicserviceeurope.com
www.ukip.org

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