The Public Teat

Some time ago, I rather idly suggested to DK the idea of a companion website for fakecharities.org. This would look at those companies that were living off the taxpayer. It would essentially be a searchable database, where you could look up how much a company was raking in from which bit of the state. It would be called The Public Teat.

By way of an experiment, I applied for the type of information I was envisaging from the DCSF - a department picked pretty much at random. I was a bit surprised to find that I got a response indicating that the information would largely be forthcoming. Bitter experience had suggested that most civil servants will try a refusal first, just to see if you will go away.

I had formulated the request quite carefully. Obviously, I was asking for a lot of data, so I asked for spend only through the main system, with the data restricted to supplier name, postcode and spend for the year.  This meant that it was essentially a simple query through the purchase ledger, perhaps with a join of to the supplier data file to pick up the name and postcode. I asked for the information as an electronic file too, so there were no cost implications.

The response arrived today and as so often in these cases, what was missing was almost more interesting than what was included.  DCSF had raised concerns over privacy as a possible issue in their acknowledgement, and I had said that I would be happy for them to redact the names and postcodes, leaving just a list of amounts.

I was therefore disappointed to see that despite this, they had decided to removed all information about individual suppliers in its entirety. Why would they do that? My guess is that there are probably some individuals who are taking very large sums from DCSF and the disclosure of even the amounts would be embarrassing. But then I've got a nasty suspicious mind. I've reverted to DCSF for the missing information.

The response file is here.

Richard Murphy on libertarians

Dickie's all upset with us:

I would love, for example, to see far-right libertarians thrown off the Guardian bogs as a matter of course...

I wouldn't sully my backside with your nasty socialist latrines anyway!

Left-wing journalism

Tony Curzon Price has written a piece on a proposed new tax:

Taxes are basically a good thing when you put a cost on something that needs some degree of discouragement. This is why a carbon tax would be good. Left-wing journalism falls into that category. Every time a left wing journalist misrepresents the facts, it should be counted as a pure social cost. Moreover, in a world of multiple news sources, I do not believe that someone who is actively searching for the truth actually needs left wing journalism.  Google does a perfectly acceptable job if you're looking for the truth.  And if you end up believing something that isn't true, I think that the likelihood of a mis-sell - of having swallowed a pack of fibs - is very high.

That suggests that left-wing journalism, which has a high private pay-off to the writer, also has a high externality, or social cost.

So, go ahead and tax left wing journalism.

(I've changed it a bit)

Urine tests for welfare recipients

From a reader:

I work, they pay me. I pay my taxes and the government distributes my taxes as it sees fit. In order to earn that pay cheque, I work on a cruise ship for a major shipping line. For the safety of all the passengers and the crew with whom I work, I am required to pass a random urine test, with which I have no problem.

What I do have a problem with is the distribution of my taxes to people who don't have to pass a urine test. Shouldn't one have to pass a urine test to get a welfare cheque because I have to pass one to earn it for them?

Please understand that I have no problem with helping people get back on their feet. I do, on the other hand, have a problem with helping someone sit on their ass drinking beer and smoking dope and making babies, that they do not want, cannot feed nor look after properly. Could you imagine how much money the government would save if people had to pass a urine test to get a benefits cheque?

Tax revolts and the BBC

Jonathan Pearce at Samizdata points to an article by Charles Moore in the Tellygraph who is trying to foment a tax revolt against the BBC. Having read exactly what it was that Messrs Ross and Brand said, (the details of the whole affair had previously rather passed me by), I'm inclined to think that he's right. I'm struggling, in fact to think of any saving grace that the BBC has. Maybe it is time that we all just said "Enough".

I can hear it now, the masses in the streets chanting:

Remember Ross! Remember Sachs!

And then don't pay your TV tax!

Sends shivers down your spine, doesn't it? Viva la revolucion!...errm, old boy!

Today is....

TAX FREEDOM DAY!!!

(Via the ASI) 

This is what they mean by fairness

Taxation Web reports that the government is set to reduce the period in which taxpayers can claw back overpaid tax. Currently six years, a clause tucked away at the back of the Finance Bill is set to reduce the period to four years.

It goes without saying that there is no similar reduction in the time in which government can pursue taxpayers for underpaid tax.

Taxation Web notes that the people who usually end up paying too much tax are pensioners. As I noted in an earlier posting, Labour party people aren't that bothered with pensioners, so it may be that they have considered and discounted the fact that this is not actually not be very equitable.

Socialists mean something different to you and I by "fairness". To them it's something along the lines of "pay up".

The madness of King Gordon

I've commented a couple of times on how the Labour party just doesn't seem to understand why it has become so unpopular, as demonstrated by their failure to come up with any sensible suggestions for new policies to regain the initiative.

There's no suggestion that the higher echelons of the government have twigged the problem yet either. Take a look at this article from the Low Incomes Tax Reform Group, which is a pretty clear example of the madness which has become the stock in trade of Labour government. It tells the story of a hypothetical French student called Henri who studies in the UK and works at home in his summer holidays. Having a bit of cash to spare at the end of his hols, he buys himself a pair of new trainers to impress Les Anglaises.

At this point, Gordon Brown, or more to the point, his tax policy on non-doms steps in:

The new Finance Bill proposes that if Henri lands at Dover wearing his new trainers, he should declare that fact to HMRC and be charged to tax on their cost.

We should also add that if Henri needs to buy some books to study in the UK and uses his French debit card to buy them, he will also have to declare that to HMRC and potentially pay tax on those as well.

These are what are known in tax law as “remittances”.

Henri could declare all his income (including his earnings in France) like a UK student and avoid the charge on remittances, but that would mean completing a Self-assessment tax return, reading around 100 pages of HMRC material about double taxation agreements and residence, as well as corresponding with the French tax authorities.

Whatever he does, he is in a fix. Henri may not pay any UK tax at the end of the day; but he will probably have to spend half the year studying tax law in order to satisfy the requirements of HMRC.

If you spend six months finding out how to pay your taxes and the rest of the year earning enough money to pay them, you wonder why anyone gets out of bed at all. But these are the facts of life in Brown's Britain.

Richard Murphy

Tim W's favourite accountant, Richard Murphy, wonders what the fuss is about Aberdeen Asset Management's rumoured departure from these shores.

Guess what? Here we have another company threatening to leave the UK that is not only not paying UK tax in 2007, it’s such a seasoned UK tax avoider that it’s downgraded its previously stated UK tax liabilities by £7.8 billion in two years.

Michael Meacher refers to our Dicky as one of the UK's foremost tax experts. Its a pity then that Mr Murphy has such trouble telling the difference between millions and billions. This is probably the same affliction from which Gordon Brown suffers.

Richard's argument is a bit dicky too (it always is). Why should their 2007 tax bill be the criterion used? What happened in 2006? Well, the comparative figures show that last time round they had a tax charge of nearly ten million and, adjustments aside, that's not an inconsiderable sum. And never mind the charge - what did they actually hand over in cash in 2007? The answer, according to the cashflow statement, is £9.7m and the year before that £6.7m.

So in simple cash terms, a company which has handed over £16.4m in cash in the last two years is, according to our Dicky, "contributing little or nothing".

You can see why they'd want to leave, can't you?

Something interesting from Belgium

No, really!

Inadvertently, the Region of Flanders in Belgium is positioning itself as a retirement haven for retired entrepreneurs from all over Europe.  In reaction to a decision of the European Court of Justice, Flanders has changed its inheritance tax legislation so that these businessmen can come and live in Flanders and save on inheritance tax on their estate.

This looks like it's going to be a scheme which is open to all but the smallest business owners, and once you're in, the rate of inheritance tax applied is Nil.

Flat tax in a developed economy

Via the ASI, the Cato Institute has a piece reporting that one Swiss Canton has introduced a flat tax with a rate of 1.8%.

Yes, you read it correctly, 1.8%. That's One Point Eight Percent.

The new tax regime in Oberwalden was introduced following a referendum in which 90% of voters voted in favour of the change.

One of the main barriers to the introduction on flat tax regimes in the developed world has been the argument, supported by bodies like the OECD, that this kind of system would not work in developed economies. We're about to see this argument tested empirically for the first time, and I've no doubt that the naysayers are going to be proved resoundingly wrong.

Where's a nice place to live in Oberwalden?  

Quote of the day

In the UK we have 8,300 pages of primary tax law, second only to India with 9,000. Even the US - thought by many to have one of the most complex tax regimes - has only 5,100.

Andrew Green, of accountancy firm Mizars. 

Thanks Gordon. 

3rd March 2007. A good day.

Trip to the seaside with the family today. Lots of bracing East Neuk fresh air in glorious sunshine while the baby Bishops exhausted themselves in running amok and disturbing the peace.

The news is looking good too.

The faeces are bespattering the air conditioning in the cash for honours department. Blair can surely not last much longer. If, as seems to be the general conclusion among the blogosphere, this is an attempt by the government to deliberately prejudice a trial and so get themselves off the hook, then Yates of the yard has done a fantastic job to keep the lid on it. It also suggests that Blairistas are very desperate indeed.

Iceland has a flat tax - the first developed country to adopt one. This could be the start of a revolution.

Spring is in the air and the government are in retreat. More wine please missus.