Tax Freedom Day is later than before

We have the annual press release from the Adam Smith Institute, which tells us that this year Tax Freedom Day falls on June 3, four days later than in 2015. Oh the joys of having a socialist governments. Oh wait, what am I saying? Well, you know what I mean.

British taxpayers have worked a gruelling 154 days this year just to pay their taxes, four days more than in 2015. This year also sees the date creeping into June for the first time in fifteen years, a red flag that Britons’ tax burden is moving in the wrong direction.

Whilst net national income has increased by £34.6bn from 2015, government has actually gobbled up £35.4bn more in taxes, meaning the government has actually left Britons £1bn worse off than last year, a reminder that tax reform must remain a priority.

I am afraid even if the country does vote for Brexit on June 23, this is not going to be solved unless this or a future government starts thinking seriously about tax reform and about what it is government needs money for.

Mixed news from the House of Lords

Two Questions from Lord Stoddart of Swindon. The first one was straightforward as was the reply:

To ask Her Majesty’s Government, further to the Written Statement by Lord Deighton on 26 November (WS 37) concerning the meeting of ECOFIN on 7 November, whether they plan to continue their opposition to the proposed Financial Transaction Tax; and whether they will indicate that they will not facilitate the collection of the tax in the United Kingdom.

HMG, in the shape of Lord Deighton reassured everyone:

The UK is not participating in the Financial Transaction Tax (FTT) proposed to be adopted by 11 EU member states.

The Government strongly objects to certain extraterritorial aspects of the European Commission’s proposal, which in our view breach EU Treaty requirements.

While any eventual FTT is likely to be significantly narrower in scope than the current proposal the Chancellor has been clear that the government will not hesitate to renew its legal action against the FTT if our concerns are not addressed.

Well, that's a relief or partially so, as the chances of HMG holding out are not very strong, if past experience is anything to go by.

The second Question elicited a more intriguing reply:

To ask Her Majesty’s Government, further to the Written Statement by Lord Deighton on 26 November (WS 37) concerning the meeting of ECOFIN on 7 November, what will be the effect of the proposed amendment to Directive 2011/96/EU; and whether it transfers further powers over taxation to the European Union.

Once again it was Lord Deighton who replied (well, to be quite precise, as these Questions were written one, the minions dealt with it all, with nary an intervention by the Minister):

The amendment to Article 1 of the Parent Subsidiaries Directive introduces an anti-abuse measure, which requires Member States to withdraw the benefits of the Directive with respect to tax arrangements, where gaining a tax advantage through exploiting the Directive is a main purpose.

UK officials have worked successfully to incorporate UK changes into the text. These ensure that the rule is proportionate, is in line with OECD recommendations on Base Erosion and Profit Shifting, and does not delegate further powers to the Commission.

I shall leave the details to the financial experts among my readers (there must be some) but would like to point out something interesting. The new rule is in line with OECD recommendations. That is in line with what the Boss has been saying for quite a long time (and it feels even longer): it is not always the EU that decides on these and related matters. There are organizations above and beyond it and the EU merely puts their rules and recommendations into place.

Happy Tax Freedom Day!

Yes it is today and I shall be going to the Adam Smith Institute later to celebrate by drinking some heavily taxed alcoholic beverages. According to this article, this year's Tax Freedom Day is three days earlier than last year, which is not quite the progression we are used to but welcome nonetheless even if it is statistically not that significant.

This means that Britons work 148 days of the year solely to pay their taxes (including direct taxes like income tax and national insurance, and indirect taxes like VAT and corporation tax). This is three days earlier than 2013's Tax Freedom Day, which is not statistically significant.

For those who are interested in the background, here is Eamonn Butler's account of the history of Tax Freedom Day.

Couldn't have put it better myself

My friend, Jim Bennett, author of The Anglosphere Challenge and co-author of America 3.0: Rebooting American Prosperity in the 21st Century-Why America's Greatest Days Are Yet to Come, summed up very what the panacea of taxing the rich to distribute among the poor really means:

Actually, tax the non-connected slightly more prosperous, and give the money to bureaucrats and crony NGOs claiming to be working on behalf of the poor.

We call them quangos rather than NGOs and our political funding rules are different from American ones but those are details compared to the essential point.

Happy Tax Freedom Day

A day later than last year but it has arrived. Allister Heath in City AM analyzes what that means:

For an average UK resident, the entirety of January, February, March and April, and virtually all of May, went on part-financing the state – the first 150 days of the year. It is only money earned from today that is retained by families to spend as they see fit.

The budget deficit is primarily a form of deferred taxation – and if the government were running a balanced budget, tax freedom day would actually fall on 13 July. As the economist Gabriel Stein argues, the government will spend the equivalent of all of the income generated by the economy for the first 196 days of the year. So much for the supposedly savage cuts to public spending from the coalition – and tragically, even though expenditure remains so high, parts of the public sector, including the NHS, are nearing crisis again. The system is bust, and needs radical structural change.

It always seems to me rather odd that whenever a tax cut is contemplated by people who believe on the basis of historic evidence that lower taxes help the economy to grow, there are immediate discussions as to where the missing money will have to come from. Which other tax is to be raised? Is it not time to start wondering why exactly does the government need all this money? What is it doing with it and should we be assuming that the government is the right organization to be doing all that is now assumed to be its responsibility. Again, historic and present data would indicate that it is not.

Allister Heath's article ends with the words:

Taxes are too high, and yet Britain’s welfare state is in crisis. We need to face up to this lethal dichotomy, and start to think the unthinkable.

Indeed.

I don't think it means what he thinks it means

The word the Boy-King who, for some unfathomable reason, is the Prime Minister of this country keeps using is "moral". I do not think it means what he thinks it means. He clearly thinks it means "whatever I happen to think of as policy on any day that might appeal to the media and all those who tend to vote with their emotions rather than their brains".

This blog has already pointed out that he and his Chancellor think we all have a moral duty to pay as much tax as this or any other government want to land on us as long as they pronounce it to be fair. He (Mr Cameron, Boy-King and Prime Minister), on the other hand, has a moral obligation to squander our money by handing chunks of it over to various kleptocrats who oppress their people and prevent their countries from developing economically. It is called foreign aid and is, according to the same source, entirely fair as well as moral.

Returning to the question of tax avoidance, Mr Cameron has once again pronounced, that

foreign companies like Starbucks and Amazon which have avoided paying large corporation tax bills in the UK lack "moral scruples".

As opposed to politicians, one presumes, who see no problems about feathering their nests at the taxpayer's expense without contributing anything to the economy unlike the said foreign firms. I love the way he has decided to use the word "foreign" to whip up discontent. Apparently "international" will no longer do.

According to the article, Britain has a very low corporate tax and it is a fair tax, so people should not avoid it and there will be a war waged on companies that do. As a matter of fact, it is not particularly low at 24 per cent (the lowering to 21 per cent is not due till next year) and as to whether it is fair, we have already discussed that. Who decides what is fair? A government that is incapable of reining in spending or reforming the public sector or even thinking of reducing the extent of government activity might not be the best set of people to discuss fairness. A politician who seems unable to grasp that a large international business contributes a great deal to the economy and, in one way or another, pays a lot of tax is not the best person to talk about fair levels of taxation. Just what did that PPE course consist of when David Cameron was at Oxford? Not basic philosophical or economic ideas, clearly.

There is something very worrying about a politician who keeps using the word "moral" to describe his policies, however ramshackle they might be.

This is not taxation but payment of protection money

Of course any serious discussion of taxation should start with the obvious question: what is the tax money for? What should the state be doing that no other entity can do as well or, at least, as usefully? For the time being, let us leave that to one side and concentrate on how taxes are decided on and raised.

One does not have to be an adherent of the flat tax in order to agree that taxes should be proportional, fair, consistent and comprehensible. In other words, politicians should not, out of the blue, demand a new tax from one or more firms contrary to the rules they themselves laid down. That is not taxation but payment of protection money and that is exactly what is happening in this country.

After a great many attacks on large international companies who dared to do exactly what the tax legislation encouraged them to do and arrange their fiscal affairs in order to pay corporation tax in countries where the regime was more favourable, thus paying out more money to the shareholders, two things happened.

One was that our benighted Chancellor of the Exchequer or his minions realized that the best way of bringing those companies back into this tax jurisdiction is by changing it into a more favourable one. So, in April 2014 the rate of corporation tax will go down to 21 per cent, which is too little and too late but, at least a sign of some understanding somewhere in the Treasury.

More immediately, however, pressure has been put on the big companies to cough up or else. Dutifully, Starbucks has offered to do so. Ignoring their fiduciary duty to their shareholders they have looked around for a way of keeping the Treasury and the politicians, whose own idea of fiscal honesty is not exactly beyond reproach, and came up with an offer of £20 million over the next two years, which should keep a couple of those new Police Commissioners and their ever growing staff of highly paid buddies in business.

Starbucks said it will no longer claim tax deductions for the royalties it pays, the coffee it purchases, for interest paid on intercompany loans, or for capital allowances and losses carried forwards.

When those costs – which it is legally entitled to claim as deductions – are removed, it believes it would owe £10m per year. And if it is still not profitable in 2015 and beyond, it may make this donation again.

Quite so. They are making a donation. This is not a tax, this is protection money: go away, please go away, we'll give you some money.

But lawyers warned the deal, however nobly intended, does not represent a reasonable way to pay taxes. “Starbucks is operating within the law, and has not done anything wrong. There is no legal or scientific logic to this move,” said Richard Jordan from law firm Thomas Eggar. “It is a PR response, giving the people what they want to hear.”

Meanwhile, the European Commission is looking at ways

to reduce tax avoidance, seeking a common policy on the treatment of tax havens and coordination on “tackling aggressive tax planning”.

Well, I hope that will apply to all those pensions paid out to former Commissioners and their employees. (I do see pigs flying, I really do.) In the meantime, we'll send the bully boys round and businesses will pay up or they will be harassed by politicians and the media. Just the sort of country one wants to live in.

A moral duty?

So, according to much (though not all) of the media and a supposedly Conservative Chancellor of the Exchequer we all have a moral duty to pay "our fair share" of the tax. Oh really? And who exactly decides what a fair share is? Whose fault is it that the level of taxation is so high that people and companies who earn a lot by contributing a great deal to the economy are fleeing the country? Whose fault is it that the whole system is complicated to the point of complete incomprhension with endless additions here and there that allow, nay, encourage tax avoidance?

As for the media and the many vox pop comments on the subject, one begins to despair. No, not begins - one despairs completely and utterly.

It appears that there is no clear distinction in people's minds between tax avoidance (completely legal and one anyone who has an ISA or a complex pension arrangement is taking part in) and tax evasion (illegal but one many people indulge in whenever they pay in cash to avoid VAT). It, furthermore, appears that people have no ability to grasp the similarity between international companies choosing the country with the best tax system in which to pay tax and them choosing the best ISA or pension fund. The words "international" and "company" act as a red rag and all ability to think disappears. Finally, it would appear that having read about arrangements to pay low or no corporation tax, journalists, politicians and others who express opinion, assume that it means no tax at all being paid. No National Insurance, income tax, VAT, business rate. Nothing.

It is such a relief to be able to read a sensible analysis of the issue on the Adam Smith Institution blog. I recommend it to anyone whose blood pressure is going through the ceiling. Happily, I am genetically predisposed towards low blood pressure. Otherwise, I would have had to abandon politics a long time ago.

Some things do not change

Before I blog about Thursday's victory for the Sod Off Party I want to turn to an interesting continuity in English history and that is the relationship between the government (the King and the Royal Household in the fifteenth and sixteenth centuries) and the wealth creators (the City of London then and now).

Here are two related news items.

John Cridland, Director General of the CBI, has warned a so-called Conservative Chancellor, to wit Georgie-Porgy Osborne, not to follow the example of his Labour predecessor and raid pension funds again. Or, in other words, stop punishing those who earn money by creating wealth for the country and who use that money to provide pensions for themselves; stop regarding all money that is made in this country as something that rightfully belongs to the government.

At the same time, the ever more ridiculous Public Accounts Committee in the House of Commons, grilled and prepared to chastise executives from various large international companies for using perfectly legitimate ways of avoiding (not evading) taxes, mostly by positioning their headquarters in countries with more favourable tax jurisdiction.

The idea of MPs lecturing the rest of us on fiscal rectitude is too funny for words. How many of them are still there only because they have not been caught out in some light-fingering of what they term expenses but is really part of their salary? How many of them will be caught out in the future, much to our amusement? How many of the self-righteous who lambast those executives ensure through ISAs, pension funds and every possible loophole available that they pay only as much tax as they can get away with? I do not think that is wrong. In fact, tax avoidance is a civic duty, in my opinion, but hypocrisy on that scale begins to make one feel very ill, indeed.

As we know, the answer is very simple: make this country into one of those favourable tax jurisdictions and the companies will place their headquarters here. In the meantime, they  run businesses, sell goods, employ people, pay other taxes, make and spread wealth. How many MPs can say the same for themselves? Certainly, not our lamentable Chancellor, whose family undoubtedly has excellent tax accountants and who, himself, has worked outside the Conservative party very briefly as Wikipedia says accurately:

After graduating in 1992, Osborne did a few part-time jobs including as a data entry clerk, typing the details of recently deceased into a NHS computer database. He also briefly worked for a week at Selfridges, mainly re-folding towels.

Nothing wrong with folding towels or typing details into an NHS database but a few weeks in either job is not what one might call being in the big bad world and knowing about economic realities.

As I mentioned before, I am reading, inter alia, Thomas Penn's account of Henry VII's reign. The emphasis of Winter King is on the last years when Henry's carefully and bloodily built up regime seemed to be tottering once again but, necessarily, there are detailed descriptions of earlier events, particularly the marriage of Prince Arthur, the Prince of Wales, to the Infanta Catherine, daughter of Ferdinand and Isabella of Spain. The marriage was supposed to signify that Henry had finally full control over his country and the various troublesome nobles (he didn't, as it turned out), could place his dynasty among the older ones of Europe (he was, after all, the grandson of a Welsh adventurer) and could mount a display that rivalled those of his Yorkist predecessors and Continental contemporaries.

The preparations, needless to say, took several years and, contrary to practice, Henry and his tightly knit Royal Household took full control, not letting the City of London do the planning but demanding that the City paid for it. In fact, that characterized Henry's relationship with the City even more than was the case with previous monarchs: distrust of their independence, envy of their wealth, need to control them tampered by the desire to get as much of their money as one could. Not much has changed there, as I said at the beginning of this post.

Matters came to a head in the late summer of 1501 when Edmund de la Pole, the Duke of Suffolk, a Plantagenet with a better claim to the throne than Henry himself (at least in his and other nobles' opinion) fled the country again. Henry had intended to place him at the centre of the various celebrations though he was to be kept under tight administrative and financial control. His presence was supposed to show that he had submitted but, at the same time, he was not allowed to have the title and lands he considered to be his own. A muddled and unhappy situation that resulted in yet another widespread conspiracy and Suffolk's flight from London to the Low Countries.

Thomas Penn writes:

Henry and his counsellors decided that something more was needed in the wake of Suffolk's flight. Sir Reynold Bray, one of the king's inner circle and a familiar and unwelcome face in London's corridors of power, strode into the Guildhall to demand a major change to the plans. The customary wine fountain, positioned outside St Paul's on the wedding day to keep the crowds in good voice, should be transformed into another pageant, the most spectacular of them all. An artificial mountain studded with jewels and covered with red roses, wine gushing forth ceaselessly from its depths, this 'Rich Mount', a play on Henry's family name of Richmond, would be an emphatic statement - and the city, Bray stated, would foot the bill. Outraged, the city leaders pointed out that they had paid for all the other pageants and a lavish present of gold plate for the Spanish infanta, and refused point-blank, unmoved even by Bray's uncompromising bluntness. The king's household grudgingly covered the cost.

 Apologies for the slightly lame prose. Not mine, obviously. But the tale it tells is instructive. Perhaps our own government will finally realize that you can push these people only so far.

Who is this "we" Mr Greenslade?

Roy Greenslade in today's Media Guardian is proposing a solution to a problem, according to him, "we" have all been pondering over:

We have been puzzling for years about how to subsidise journalism once it makes the final transition from print to net (see here and here and here). One obvious model is the funding of the BBC through its licence fee.

Well, speak for yourself, Mr Greenslade. I have not been puzzling about it at all.

I do know that various media and other outlets have been working out how to make the internet pay and have come to various, mostly unsatisfactory answers. One solution would be a pay wall on all newspapers and news sites but that is not a viable one as long as the tax-subsidized BBC can pump huge amounts of money into its own site without needing to charge consumers.

Mr Greenslade now proposes a similar arrangement for all or some newspapers on line (well, actually, he is repeating a solution proposed by one of his colleagues, David Leigh) and that is a levy on all broadband users to distribute in some unexplained fashion between various hacks on the net because the world cannot manage without them. There are, he acknowledges, some practical problems around but he is sure they can be overcome.

At a time when ever more people are beginning to realize that the BBC's fiscal model is unjust, ridiculous and out of date, it takes some doing to propose a similar one for all journalists. I am delighted to say that the comments make short work of Mr Greenslade's arguments.

We all avoid taxes (or should do)

I am happy to say that I have never seen Jimmy Carr do his comedian act but, I understand, it is the usual "let's bash the bankers and rich people and anyone who is not part of the trendy left" variety. Indeed, a number of people I know have expressed some surprise that he is described as a comedian at all. But I digress.

The problem with Carr is two-fold: he has avoided taxes (a completely legal and, indeed, legitimate) action and he has done so after making all sorts of nasty sneering attacks on bankers and their like who avoid taxes. In this, Mr Carr is no different from Comrade Livingstone who was caught out during the Mayoral election campaign. That sort of hypocrisy, not exactly unknown among the Left, makes one laugh helplessly.

On the other hand, the idea of a Conservative Prime Minister calling the actual tax avoidance not the hypocrisy immoral is only funny to those of us who never believed in the Boy-King's credentials as a true conservative. He is a big-statist and a man who believes in high taxes because he believes that people should have their lives run by the state and not have the choice to do what they want with their money. His Chancellor, a disaster if ever there was one, is endlessly thinking of schemes that might get rid of  legitimate tax avoidance or allows people to decide to give their money to charity, as it were, or to spend it on their children's education. Then Georgy-Porgy has to retract or do a U-turn.

The truth is that we all avoid taxes if we can. Every time we buy ISAs or look for a savings account that pays less tax we are doing just that and, indeed, we should be. There is nothing immoral in it. It is highly moral not to give more money than is absolutely necessary to the state to squander on huge pharaonic projects as well as regulatory disasters (just to name two things the state does). Let us not even consider how many of us pay cash for work rendered because that is the only way to avoid huge amounts of bureaucracy as well as evade VAT.

Here is a highly entertaining article by Mark Littlewood, Director of the IEA, on how he avoids tax, though he does admit sheepishly that he is not as good at it as Jimmy Carr. Though, I suspect Mr Littlewood is not about to cave in publicly on the subject. I also suspect that when the hue and cry dies down, Mr Carr will go back to using whatever scheme saves him more money.

And the solution: well how about a less complicated system of lower taxes? Could that be achieved? The Taxpayers' Alliance has produced a report, which suggests that it is possible to do so. Of course, we do need a government that believes in low taxation and small state. Not sure how we are going to achieve that.

Happy Tax Freedom Day

Two days later than last year, as the Adam Smith Institute points out, but we have reached it: Happy Tax Freedom Day in the UK (it came around on the other side of the Pond a little while ago).

Tax Freedom Day falls later this year down to a number of factors. The double-dip recession, the VAT increase from last year, our high personal taxes, as well as fuel duty and stealth taxes, all mean that the government is taking a larger share of our hard-earned income. Britain’s tax burden is still too high and tax cuts are desperately needed to boost economic growth.

This year’s corporation tax receipts are a good example of how tax cuts can pay for themselves. There were large increases in tax revenue from onshore corporation tax, coinciding with the government’s cuts to the headline rate of corporation tax. Reductions in the corporation tax rate have brought the government higher revenues as more companies choose to invest in the UK. By stimulating growth and investment, tax cuts really can pay for themselves.

However, our Tax Freedom Day still falls long after the USA’s, on April 17th and Australia’s, on April 4th. Our only comfort is that our tax burden isn’t quite as high as France’s, which will have to wait until July to celebrate its own Tax Freedom Day. With Hollande now in power, that day could get even later in years to come.

There is always someone worse off than you are, as the old saying goes.

Take that Ms Toynbee

One of the best things that happened to the Telegraph is that it acquired Tim Worstall as columnist. I am rather astonished that the editor had the good sense to offer Tim a slot. He and I do not necessarily agree every time but we do dislike the same people, Polly Toynbee being high on the list, though I do realize that it does not place us into a particularly select group.

Yesterday's column had an interesting title: Let's give Polly Toynbee the Britain she wants. I have always assumed that Polly Toynbee envisages a kind of Soviet society where she and her friends and relations would be exempt from the poverty and misery that she would like to inflict on everyone else and have always enjoyed the thought that in the Soviet Union even the bosses had a constrained life that was much poorer than average existence in the West.

However, Mr Worstall has gone one better: he has taken Ms Toynbee at her word. Apparently the silly cow Grauniad columnist has expressed the wish of seeing the same social and economic balance that one can find in the Nordic countries.

She clearly knows nothing about Nordic countries. Presumably she did not read Graeme Leach's paper on economic lessons from Scandinavia that might have surprised her about the level of taxation and regulation in those countries.

Perhaps she will read Mr Worstall's collection of facts as opposed to myths so beloved by the Guardinistas.

Let's change policy to achieve that laudable aim. We should copy the Finnish education system, for example – it is, after all, the number one such system in the world. There they divide into academic and vocational at 16 and there's none of this nonsense that all must go to university – that's reserved for the small fraction that are indeed academic. Or the Swedish system of education vouchers. Parents decide on the school they want children to go to and the local council stumps up the fees – whether it's a public or private school.

From Denmark we'll take a couple of policies. Privatise the ambulance and fire services certainly. They've been working well there for nigh on 90 years. We'd want their taxation system as well: the national income taxis 3.76% and the top national rate is 15%. True, total income taxes are high but the rest is levied by the commune, a political unit as small as 10,000 people. At that scale, taxation is subject to the Bjorn's Beer Effect. If you know that it's Bjorn who levies your taxes, Bjorn who spends your taxes and also know where Bjorn has his Friday night beer, then he's going to spend your money wisely. Otherwise he can't go out for a beer on Friday, can he?

From all of them we'll take the abolition of the national minimum wage, fornone of the EU Nordics has one.

Sweden has also abolished inheritance tax, gift tax and the wealth tax. Those sound like three excellent ideas to copy.

We'll have to raise VAT as well, of course: for this is something that people don't seem to realise about Nordic tax systems. In many ways they are more regressive (yes, regressive, not progressive) than our own. This is because those countries follow the basic economics of taxation. You need low corporate and capital taxation, moderate income taxation and high taxes on consumption.

I suspect Ms Toynbee will have fit if she reads that. I also suspect that she will go on peddling her nonsense without bothering to find out any facts.

A few general comments about the Budget

There was an e-mail from George Osborne in my inbox; addressing me as Dear Helen, he explained at some length how radical his Budget is. First of all, I had not realized we were on those terms and, secondly, I do not think that kind of over-the-top description of a pretty so-so Budget is appropriate.

Immediate reactions were predictable: Tories whoopped with joy and called it brilliant, those on the left screamed with horror, smokers talked darkly about fascism (like they know what the word means) and the rest of us were left bemused for a while then realized that it was not radical, not brilliant, not evil but an itsy-bitsy, give a little - take a little kind of Budget. Some good ideas, some not so good ones, most things postponed till next year and nothing very daring or brilliant.

There have been a few rational analyses from the Adam Smith Institute, from the IEA and from Reform via Reuters (this being less coherent than the other two). None of them are impressed though acknowledge that there are some good things. I'd say that Osborne is displaying an almost Brown-like obsession with micro-management and dislike for people who make money.

Anyway, discussions about the Budget will go on till at least Sunday though the news from Toulouse and, possibly, China might eclipse them.

A few general points need to be made, however. Osborne's proposed regulation on tax avoidance (which is entirely legal) shows that he is one of those who believes that money basically belongs to the government and we all have a duty to hand over as much of it as they require at any given time, this duty being moral as well as legal.

As the statement from the ASI put it:

The General Anti-Avoidance Rule is a bad idea. It leaves far too much latitude for bureaucratic discretion. It adds another layer of complexity on our labyrinthine tax code. And it is an affront to the rule of law. Radically simplifying taxes is a much better way of ensuring people pay their fair share.

That, however, appears to be contrary not just to the Chancellor's thinking but to that of many others inside and outside the political world. I took part in a number of discussions today with people (many of whom are in not so radical UKIP) who solemnly announced that if there are tax cuts then the money has to be replaced from somewhere else. When asked why they thought the government absolutely had to have this money and spend it on all those projects they sounded stunned. The idea that perhaps the state should not be spending quite such a large proportion of our money and that, perhaps, it would be better if some things the state spends money on now were actually taken out of its greedy grasp was completely alien to their way of thinking.

Then there were the other discussions with people who fulminated about "greedy bastards" who did not "pay their fair share" and did not "give back to society from which they had benefited". Really, it is as if people like  Hayek, Ayn Rand or Milton Friedman had never written their various seminal works.

People, I explained, who create wealth and make money do not benefit in some unspecified way from society and their best contribution to it is to continue to create wealth. (And, no, I did not believe the assurances that the people who were arguing with me never, never avoided paying all the taxes they could have paid if they did not take certain precautions.)

Even more astonishing were the many assurances that paying taxes in order to support the NHS, the education system and the welfare structure was essential if we wanted to live in a humane and civilized society. It was our contribution to such a society. The idea that people could look at the questionable NHS, the disgraceful education system and a welfare state that has created a huge underclass and call it civilized and humane seemed quite extraordinary. Almost as extraordinary as the assumption that paying taxes is the only way of contributing to the welfare of other people otherwise it is dog eat dog and an I'm all right Jack attitude.

It is at times like this that I despair for this country.

But I thought Cameron vetoed it

In this case I am talking about the Financial Transaction Tax, unpopularly known as the Robin Hood Tax (though taking money from wealth creators to enrich a bureaucracy is not quite what the men of Sherwood Forest were about). Once again, we have news from European Voice and the Daily Telegraph that the tax is on the agenda and that Merkel and Sarkozy (particularly the latter) are determined to push it through despite opposition from Britain and Sweden as well as possible others. The one thing neither article bothers to explain is how precisely it will be brought in. At present I am assuming that it will come in under Single Market rules and that means Qualified Majority Voting. But they might think of some other way. In the past it was established that a new tax needs primary legislation by Parliament. We shall see how many of those eurosceptics will dare to put their heads against the parapet. Of course, numerous questions in the House of Lords in the past established that if a tax is imposed by the EU and Parliament votes against it, the UK will be taken to the ECJ. That will give the Boy-King something to veto, surely.

Makes sense to the BBC

In BBC-speak people who consider that they and others should look after themselves and their families whenever possible and help other people in their own way with their own money, if necessary, are absolutely selfish. Being unselfish is wanting to pay higher taxes (or wanting other people to pay higher taxes) that can then be used and abused by highly paid but seriously victimized officials to make people do what is good for them in the eyes of those officials. Makes some kind of a logical sense and can be the only explanation why the BBC should misrepresent the National Social Survey as Philip Booth explains. Read the whole posting.

Still opposed to the financial transaction tax

In response to a question by Lord Pearson of Rannoch about the proposed financial transaction tax under Article 311 of the Treaty on the Functioning of the European Union, Lord Sassoon wrote:

The Commission has put forward a proposal to introduce a financial transaction tax under Article 113 of the Treaty on the Functioning of the European Union. Proposals put forward under Article 113 require unanimity in the Council of Ministers, giving the UK Government a veto over any such proposal. The Government oppose a European financial transaction tax.

In addition, the Commission has put forward a proposal under Article 311 to use revenues from its proposed financial transaction tax to part-fund the EU budget. Article 311 also requires unanimity in the Council of Ministers, giving the UK Government a veto over any such proposal. The Government oppose any new taxes to fund the EU budget.

We shall see what will happen later on in the process but this is where we stand at the moment officially.

This may be of greater interest to Americans ...

... but the OECD's anti-tax competition agenda concerns us all. It's just that we have various levels of government, starting with the EU and going all the way down to our own political establishment who are all anti-tax competition.

The Coalition for Tax Competition has addressed a letter to US Senators and Representatives, calling on them to stop spending American taxpayers' money on this rather unhelpful organization.

Even if we had a balanced budget, OECD funding would be contrary to US interests. The Parisbased bureaucracy increasingly promotes a left-wing economic agenda, despite the fact that US taxpayers contribute nearly one fourth of their annual budget. We have long been disturbed that the OECD has a “harmful tax competition” project that seeks to hinder the flow of jobs and capital to low-tax nations. And since the United States is the world’s biggest beneficiary of international capital flows and tax competition, it is the height of folly for the American taxpayer to subsidize this effort

Quite so.

We shall see

Lord Stoddart of Swindon, a man who appears in this blog frequently asked HMG

whether they could agree to an European Union financial transaction tax without parliamentary approval and a referendum.

The reply from Lord Sassoon was somewhat convoluted but it did give hostages to fortune:

Agreement to a directive on a financial transaction tax would require unanimity in the Council of Ministers, giving the UK Government a veto over any such proposal. Therefore such an EU tax cannot be imposed on the UK without the UK's agreement.

While the UK Government are not opposed to financial transaction taxes in principle, the Government do oppose a European financial transaction tax.

Any EU directive on a financial transaction tax or any other tax could not be implemented in the UK without parliamentary approval of the requisite Finance Bill legislation.

But what, I ask myself, if it does not come in the form of a directive.

We need people like him

Oxfam, the charity turned NGO but claiming all the benefits of charitable status, is at it again. It is campaigning for the infamous worldwide Robin Hood Tax, a contentious political issue with misleading arguments. How do taxes on banks not affect people who are shareholders or pensioners or, simply, depositors?

One chap in Taunton has decided to campaign against what he rightly sees as political campaigning on the part of Oxfam. The NGO's big charity's answer?

Oxfam is seeking court action to ban a pensioner from one of its shops, and is asking him to pay a £10,000 legal bill.

But Barry Nowlan, 63, of Taunton, says he has a legitimate complaint about Oxfam’s “political campaigning.”

The charity banned the retired bank clerk and Lloyds shareholder from its shop at The Bridge in Taunton after he complained about a poster which highlighted Oxfam’s call for a “Robin Hood” tax of banks and financial institutions.

The charity accuses Mr Nowlan of causing: “great distress” and “harassing volunteers”.

He denies the claims but admits entering the building since Oxfam banned him by letter.

Oxfam says seeking an injunction at county court is a “last resort.”

Mr Nowlan said on Friday: “Oxfam claims its Robin Hood Tax will come from bank profits and bankers’ bonuses, not from the ordinary people”. But banks are owned by shareholders.

Someone pointed out to me that Mr Nowlan is probably a royal pain the derrière. Probably. But we need more of them.