I know that politicians care about the working stiff who
pays her taxes,
if only out of a fear of jail.
I know that British politicians are trying their best
to lighten the load of these troubled classes.
However, it seems as if politicians've always got their hands
in the cookie jar, being that, by helping rich people evade tax,
they're also helping themselves.
Observing the suffering, and yet still padding his nest. Sick
Read 'em: daily Mirror
Manna from havens: Taxing questions for Osborne over new loophole for the rich
The Government will lose out on an estimated £1billion in tax revenues, that’s according to the Treasury’s own figures.
Dead loss: Chancellor George Osborne's move will cost £1bn Dead loss: Chancellor George Osborne's move will cost £1bn
Try this for a money-raising venture.
You are a multi-million pound corporation in Manchester and you decide to open a branch in Spain.
You then open another branch in the tax haven of Luxembourg.
At the end of the year you take the profits from all three and place them in a Luxembourg bank account.
Now, here’s the good bit.
Thanks to George Osborne, you only have to pay Luxembourg tax rates on all your profits, whether they were made in Manchester or Alicante.
Of course, these rules would never apply to small enterprises such as hairdressers or window cleaners.
But from 2013 they WILL apply to huge multi-national firms based in the UK and, as a result, they are going to be able to avoid paying millions of pounds in tax in this country.
To qualify, you would have to be a corporation with other corporations in the countries where you are shifting profits and dodging taxes. You’d also need to be rich enough to afford expensive tax lawyers and accountants.
Currently the law stops companies from abusing the system in this way and the Government has the right to force you to make up the difference.
But Mr Osborne decided this was bad for British business. So earlier this year, he sneaked measures to RELAX tax haven laws into the Finance Bill.
The Government will lose out on an estimated £1billion in tax revenues, that’s according to the Treasury’s own figures.
And, as we are being constantly reminded, the Government is not exactly awash with cash at the moment. So this money, which could pay for schools, police and the NHS, has to be raised elsewhere.
That means us all paying more in fuel duty and VAT but getting less in benefits and tax credits.
Let’s make this clear: not content with giving a tax cut to millionaires in his March budget, the Chancellor is also cutting the tax bill for the companies they run by £1billion.
But we are not the only ones to lose out.
Let’s say you are a UK multi-national which owns a brewery in Ghana. You don’t want to pay corporation tax in Africa because it is too expensive, so you shift profits made from the brewery to the low-tax regime of the Cayman Islands.
Previously, the British government would come after you for the tax they are losing. Now George Osborne is going to do nothing about it.
Not only does it mean less money for the UK coffers, it also means the citizens of Ghana lose out too.
The charity Action Aid has estimated that Mr Osborne’s decision to relax the rules will cost developing countries £4billion.
That is money which could be spent on education, vaccinations and poverty reduction. It could also make these countries more reliant on aid from nations such as... yes, you guessed it, Britain.
Aid, incidentally, paid for by taxpayers.
The Chancellor recently said tax avoidance was “morally repugnant”. But since entering the Treasury in 2010 he has pushed through policies which have made tax dodging easier rather than harder.
Take the deal he signed with Switzerland. Many British millionaires use the low-tax country to stash their cash, costing the Treasury billions.
To great fanfare, Mr Osborne announced a clampdown on Swiss tax avoidance.
It was nothing of the sort.
Under the new laws if you are a very rich UK citizen and have a bank account in Switzerland the Treasury can now demand you pay 40% tax on dividends and 48% on interest and other income.
If you agree to pay the new rates you DON’T have to disclose how much money you have in the bank.
It could be that you had made enough from interest and share dividends to pay the top rate of tax, 50% in the UK until April 2013, but the Treasury is not bothered about that.
George Osborne has achieved the exceptional feat of bringing in the only “tax avoidance” laws in the world that reward secrecy.
The deal also contains more holes than a slice of Gruyere cheese.