30th June 2012
Theodore Dalrymple blows the whistle.
High rates of taxation are to accountants what anabolic steroids are to athletes: they stimulate performance. Or, as one accountant said: “It’s a game of cat and mouse. The Revenue closes one scheme, we find another way round it. It’s like a sat-nav. I’m driving, get a message there’s been a smash, press the button to re-route. That’s all we do with tax avoidance. The Revenue puts a block in, we just go round the block.”
Funny how that works.
Whether this is the finest use to which formidable intelligence can be put may be doubted; but in high-tax regimes, it is all but inevitable. The British chancellor of the exchequer, popularly though unjustly criticized for having been born with a large trust fund, said that he found the tax-avoidance scheme “morally repugnant,” thus establishing his credentials as a man of the people. Could he be a member of the same government, I wonder, whose head, David Cameron, is reported on page 12 of the same newspaper—after several pages of almost undiluted indignation at the conduct of the rich—to have offered financial asylum to the French who want to flee President François Hollande’s proposed 75 percent tax on incomes greater than $1.25 million? WE WILL ROLL OUT THE RED CARPET FOR FRENCH TAX REFUGEES, SAYS CAMERON, the headline read. Not since the Revolutionary Terror or the expulsion of the Huguenots have there been so many French refugees in London, and that was before Hollande’s proposed tax increase.
And when they’re setting tax rates, they never consider that people will, like, flee the jurisdiction in order to avoid paying. The Congressional Budget Office has become champions at it; they haven’t correctly forecast the amount of a tax increase correctly since they were created in 1974.
There is surely something inconsistent about a government that welcomes foreigners fleeing their own country to avoid tax, but excoriates its own citizens who do everything legally possible to do the same. The inconsistency can, perhaps, be explained by the fact that 50 percent of the population is now dependent, directly or indirectly, on the government for its income. That is why the government will never draw any general conclusion from this paradox.
Yup. Money in, no matter what its source, good; money not in, whether for good or ill, bad.
As a more fitting subject for the moral indignation of members of Cameron’s government, I suggest the following question: How and why is it that, after 11 years of compulsory attendance at schools, at a cost to the taxpayer of $80,000 per head, more than one-fifth of British children leave state schools barely able to read or write?
America probably isn’t there yet, but it’s certainly well on the way. I suspect that the D.C. schools could beat that.