Ben Harris-Quinney is Chairman of the Bow Group and International Security Research Fellow.
A febrile media and discontented nation feels as if it is about to tear through the tax records of everyone who has ever stepped into the public eye. On what basis? Not a vast conspiracy or crime, not even an immorality, but simply the apparently sudden realisation citizens may have been rationally avoiding tax.
Jimmy Carr’s hypocrisy in criticising low tax policies of governments, companies and individuals may have ruined his credibility as a social commentator, but that is all it should have done.
The Government is straying on to very dangerous ground for a myriad of reasons in criticising tax avoidance so strongly, but fundamentally the suggestion that there is any immorality in avoiding tax assumes that tax, in its collection and subsequent redistribution, is an indisputably moral act. It isn’t, and aside any state imposed moral imperative, the heavy taxation of Britain’s wealthiest citizens is neither to the net benefit of our economy.
It shouldn’t matter who you are and what you do in the modern economy, all that should matter is whether you are a net benefactor or a net detractor. Any public anger should be directed solely at those who consistently detract from our nation’s economy, be they on a bonus, or on benefits.
By international comparison HMRC is a relatively efficient and ruthless body in the pursuit of justifiable taxes, but it does not utilise a running tally of what each citizen, each company puts in to the economy, and each takes out over a lifetime.
I find it highly unlikely that Jimmy Carr is anything other than a significant net contributor to the UK economy, if all citizens were like Jimmy Carr, this may be a more annoying nation, but it would indisputably be a wealthier one. To attack Carr and his ilk for legally avoiding tax (though still paying significantly more than most) is tantamount to the idiotic mentality of the mob on a wild witch hunt.
I don’t believe it is even right that a consistent benefactor to the economy should be sent to prison for evading £5000 of tax, when we live in a society where their neighbour might have freely taken a million from the state in welfare and housing benefit. It is equally wrong for a multinational company to take state funded bailouts far in advance of its net contribution, and then freely avoid tax, and for a small business to be penalised severely for missing a tax payment in harsh times.
If we are to truly engage with the morality of tax and nationhood, it must be right to say, greater freedoms for those who have given more, fewer freedoms for those who have given less.
An advance to a system where those who give more get more, and those who give nothing, get nothing, may sound like the fantasy of pragmatic conservatism never to be achieved, but moving on from the castigation of bankers and comedians, Europe’s recession has already started to ask more serious questions of its national dependants (net detractors).
The Spanish have long operated a “confianza” system, which has been further tightened under the new PP government. New members of the workforce are required to pay in for a period of months and years, which will dictate what level of welfare they will be entitled to should they later fall out of work. If a citizen never pays in, they will now be able to take very little out.
Before leaving office former President Sarkozy announced plans (now presumably to be scrapped) in France to limit welfare benefit payments currently available to immigrant workers to those who have enjoyed residency for 10 years and have worked for five of those.
In the UK the last six months have seen proposals for earnings for those receiving state benefits not engaged in work programmes to be limited to £24,000. In March 2012 the Home Office announced plans to only accept non EU migrants after 2016 that earn an average wage of over £35,000 and to deport any that later fall below that level of earning.
This is a reasonable early step in attempting to ensure that new citizens are a net benefit to our economy, but what of our incumbent domestic population?
This country can comfortably afford another generation of Jimmy Carrs, it cannot afford another generation of welfare dependents. There are few privileges so great, and yet so easily earned as citizenship of the United Kingdom, with all the benefits and security that it entails. It is time for HMRC, the government and the public at large to start to recognise in very real and public terms those who add to our nation, and those who detract.
If it is acceptable to reward immigrants with the benefits of citizenship, welfare and access to public services based on the level of their net contribution, then surely we must aim to apply the same rules to all.