Be it Gary Barlow or Amazon, let's stop making excuses for tax avoiders

http://www.theguardian.com/commentisfree/2014/may/13/gary-barlow-amazon-no-excuses-tax-avoiders

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Tax avoidance is a hot topic of conversation again this week, but hardly a new one. Plato, in the first book of his Republic, explained "the just" will always lose out compared with "the unjust" and used tax as an illustration: "the just man will pay more and the unjust less on the same amount of income". David Cameron said, in defence of Gary Barlow: look at all the work he does for Children in Need. But charity is supplementary to civic responsibility, not an alternative to it. There would be a lot fewer Children in Need to start with, if we all paid our taxes. The principle remains the same as Plato identified and it is one of justice. As the boycotting of Starbucks last year showed, we have the power as consumers to alter behaviours. We must decide whether we reward or penalise the "unjust" with our choices – be they individuals or companies. We need to stop making excuses for them:

But it is up to the state to close the loopholes

Yes, the state must work continually to tighten and simplify the tax regime, which is a deliberate mess keeping an entire industry of accounting firms and tax lawyers fed. However, there will always be ways of beating the system – it is a personal or corporate decision to exploit them. Actions not proscribed by legislation are just that: legally permissible rather than morally unimpeachable. The general anti-avoidance clause being discussed at the moment should help, but only if pursued vigorously against avoiders large and small, private and corporate.

But he did nothing illegal

Personal responsibility is somehow obfuscated by expert advice – one was only doing what the adviser recommended. But such experts act merely as agents carrying out the client's bidding. Let us juxtapose someone like James Dyson or JK Rowling with Gary Barlow or Sir Philip Green. The former two insist on paying un-Machiavellian levels of tax, properly reflective of their significant income. The latter two have gone to extraordinary lengths to shelter their vast personal fortune from the taxman, whether by utilising creative domicile arrangements or by using aggressive tax avoidance shell-company constructs. All four have a lot of money and access to the best accountants and tax advisers. The difference is simply one of character.

But companies cannot be expected to be moral

The lines of responsibility become further blurred when discussing corporations that engage in aggressively creative tax planning. Perhaps it is because we consider companies to be naturally amoral creatures with no responsibility, other than to maximise profit. Corporate decisions, however, are merely a nexus of individual decisions, which are just as capable of being moral or immoral. If the totality of such decisions within a company consistently displays a lack of ethics, then the company in question is perfectly capable of acquiring an overall unethical character.

But these companies create jobs

Demand creates jobs. In some cases companies can create demand by innovating or opening new markets. When it comes to humdrum consumer goods, however, large multinationals muscling in on smaller businesses, having de facto economies of scale and scope and more sophisticated ways of extracting productivity, tend to destroy jobs. Employing people does not shield smaller local competitors from their tax obligations; it should not provide a shield for large ones. Furthermore, almost without fail, tax-avoiding companies are also low-paying companies. Many such companies pay their staff at or just above minimum wage. This is below a living wage and means that many will be partially subsidised by the taxpayer. Of course, this may mean we get product X a few pence cheaper. Maybe, on reflection, that is compensation enough. But let's not discuss this on the basis of a job-creation myth, especially when taking about companies which have decimated entire high streets.

But these companies pay lots of VAT

They do not. The customer pays VAT.

But these companies contribute in other ways, such as national insurance

They pay nothing their smaller competitors (who also pay tax) don't have to pay. We all pay rates for using local infrastructure and services. The fact that I pay my council tax does not exempt me from income tax. Providing protection for your employees is also not an optional perk in the UK – it is done via national insurance. This is a good thing and, again, it does not exempt an employer from tax (although it is, of course, tax deductible).

But these companies made no profit – they reinvest their profits, which is good

It is true – and entirely rational – that the tax system provides encouragement for companies to reinvest their profits, rather than pay them in dividends. It is also often the case that multinationals use mature economies in relatively rich countries, like the UK, to subsidise their expansion elsewhere in the world. But let's not labour under the misconception that this is beneficial on a strictly national tit-for-tat basis. There is a strong argument that a company that pays tax representing 0.1% of its revenue, is not paying for the infrastructure it uses and so costs everyone money.

But they could locate elsewhere

The part of an operation that services the UK market is usually located in the UK for cost reasons. It would be tricky for Starbucks to sell coffee to the UK public from Monaco. If parts of such companies can locate elsewhere because it is cheaper, I hate to break it to you, but they already have. Central to Amazon paying £4.2m in tax, despite sales in the UK of over £4.3bn was its decision to transfer its headquarters to Luxembourg in 2006 and reclassify its UK business as "order fulfilment". As for individuals, intent on shielding themselves from paying tax, intent on giving nothing back, I fail to see the mystical benefit of their physical presence in the UK.