An accountancy firm partner was bold enough to state recently: "No matter what legislation is in place, the accountants and lawyers will find a way around it. Rules are rules, but rules are meant to be broken." Evidently, what ordinary people regard as antisocial and corrupt is a matter of pride in accountancy firms.He adds
Major casualties of the tax avoidance industry are ordinary people, who are forced to pay higher taxes while corporations and the rich avoid theirs. Individuals on the minimum wage have to pay income taxes, but some 65,000 rich individuals living in the UK are estimated to have paid little or no income tax. The top fifth of earners pay a smaller proportion of their income in tax than the bottom fifth. Corporate tax payments now account for just 2.5% of national income, the smallest share ever.To add insult to robbery, the same accountancy firms running illegal and immoral tax avoidance schemes are also consultants to the same governments they are robbing. And they expect to be paid out of the reduced tax take they are responsible for. It's like having your house burgled and the burglar leaving a bill for security consultancy services. What's worse is you feeling perfectly happy to pay up.
Unless stopped, the tax avoidance industry will destroy nation states and the very idea of democracy. Without adequate tax revenues no government can deliver its legislative programme, provide public goods or redistribute wealth.
We can be persuaded to vote for governments that promise to invest public revenues in education, healthcare or public transport. But the tax avoidance industry exercises the final veto by shrinking the tax base and eroding tax revenues.
Have governments been watching too many movies - "Keep your friends close and your accountants closer"?