[First published on Free Life]
Whenever there is the appearance of some headline berating large corporations for arranging their affairs so as to pay as little tax as possible on profits earned in the UK, the indignation from the general public seems to centre on the belief that the “lost” state revenue was somehow a “lost” benefit to the average citizen. After all, won’t lower tax revenues result in fewer hospitals and worse schools? Such was the fury greeting the news, on August 3rd of this year , that Amazon UK’s tax bill fell from its 2017 figure of £7.4m to just £1.7m in spite of pre-tax profits having almost trebled.
Unfortunately for libertarians, tax avoidance (together with the deliberate blurring of the legal and moral distinction between that concept and that of tax evasion) has become a favourite topic of heavily indebted governments as they attempt to balance their books without reducing their profligate spending.
For anyone who has ever heard of him, Danny Alexander (now “Sir Danny”, for some reason) is something of a political has-been, having been ousted from his parliamentary seat and, consequently, his ministerial role of Chief Secretary to the Treasury in the 2015 General Election. Nevertheless, the following excerpt from a speech he made to the Liberal Democrat party conference in the autumn of 2014 remains one of the most chilling utterances of the state’s sense of entitlement with regards to taxation:
Liberal Democrats have led the crackdown on tax avoidance. The investment I announced at this conference in 2010 is now bringing in an extra £7bn. We are now insisting that tax dodgers pay the right tax up front – they will only get any money if their scheme is later proved in the courts to work. And we are using psychologists and behavioural economists in HMRC to get the money quickly. Tax dodgers beware – we know where you live, we know how much you owe, and now we know how you think. Your behaviour is unacceptable, and we are coming for our money.