Saving in ISAs and taking the bus – crimes according to CleggPosted on September 9, 2010
There are very few people out there in politics who genuinely mix up tax avoidance and tax evasion. Among the lay population the two can easily be confused for obvious reasons, but it’s long been a hobby of high taxers to deliberately elide the two in order to mislead the public. Sadly, Nick Clegg has repeated that sin in his speech to Lib Dem conference.
Tax evasion is a crime – and it should be punished. Tax avoidance, on the other hand, is simply a smear term for perfectly legal, indeed desirable measures taken to not pay any more tax than you have to. It’s not wrong – it is by definition obeying the law.
If Nick Clegg or anyone else doesn’t like the levels of tax that people lawfully pay, then he should use democratic routes to change the legal rates. Smearing the law-abiding to imply they are criminals simply isn’t on. If they actually go down the proposed route of inspectors and lie-detectors to pick up on legal tax minimising, what will they do when they find it? They have no power to punish people who haven’t broken any laws or rules.
To properly illustrate the kind of behaviour Nick Clegg is talking about when he criticises tax avoidance, I thought it would be handy to start a list:
Saving money in ISAs - the ISA is specifically set up to help people avoid paying tax on their savings. If tax avoidance is wrong, then surely the Government will be slamming itself for aiding and abetting the sin by introducing such a shameless avoidance vehicle?
Giving money to charity – in order to encourage people to support worthy causes, there are a variety of tax-exemptions and reductions available on money given to charity. Will Nick Clegg be taxing charitable donations, or discouraging people from giving?
Taking public transport and buying greener cars – Successive Governments have ramped up fuel duty in order to discourage people from driving gas guzzlers or indeed from driving at all. The clear intention of the policy is to encourage people to avoid this tax by either using public transport or buying greener cars. Indeed, the Lib Dems have been key proponents of both forms of tax avoidance.
What other forms of evil tax avoidance is Nick Clegg planning to clamp down on? Suggestions on a postcard.