Said Our Beloved Leader recently.
Fair enoughski, so what sort of policies are the government contemplating..?
Exhibit One: "Benefits cheats should be shamed by having their photo pinned to every lamppost in their street, an official at the Department for Work and Pensions (DWP) said."
Exhibit Two: "Middle-class taxpayers are to be offered a partial amnesty if they settle their unpaid bills before October. Higher-rate taxpayers who have not yet completed their self-assessment forms will be given three months to declare any untaxed income they have earned before 2010. Any who come forward will face reduced penalties of £200, as well as a fine amounting to 10 per cent of their unpaid tax."
It's also interesting to note (from that first link) that the Tories have now adopted New Labour's strategy of expressing large numbers in terms of the number of nurses it would pay for: "£1.5 billion is enough to pay for something like 40,000 nurses in the NHS," Mr Cameron said during a PM Direct question and answer session."
That seems about right, they are paid about £30,000 each plus a bit of overheads. Now, given that figure, and knowing that the NHS employs about 400,000 nurses, we could pencil in a figure of about £15 billion a year for the total cost of employing all those nurses. I do wonder sometimes how they spend the rest of the NHS budget of £106 billion a year.
Bring back the typewriter
7 minutes ago
15 comments:
"...spend the rest of the NHS budget..."
Paying off PPI loans, and salaries for middle and upper management?
"I do wonder sometimes how they spend the rest of the NHS budget of £106 billion a year."
Not on the food.
Tax evasion is actually much worse for honest taxpayers than benefit fraud because the amounts are much larger. According to HMG benefit fraud runs costs taxpayers £1.1 billion, although others say it's as much as £5.5 billion. Tax evasion on the other hand costs £15.5 billion according to HMG or as much as £70 billion according to others.
So one bunch of criminals is taking at least 3 times as much out of the taxpayers' pockets as the other.
£70bn? You been listening to the retired accuntant from Wandsworth?
PJH, yes stuff like that.
AKH, but not stuff like that. That's "front line" so gets cut first.
D, there are various official figures for benefit fraud, I think the best estimate is £5 billion, plus most of the £10 billion running costs which are entirely unnecessary. Nobody really knows how much tax evasion/avoidance is, it all depends on how you define it but somewhere in the region of 5% - 10% of potential receipts seems about right, i.e. £25 - £50 billion a year.
PJH, agreed, £70 billion is clearly exaggerated.
Most of the rest probably goes into the pockets of drug companies. The NHS is so like the MoD!
Absolutely. That's why I compared worst-case benefit fraud to best-case tax evasion to get the 3x figure. but even using Mark's figures it would be at least 2.5x
AC, no it doesn't. Total NHS spend on drugs is about £12 billion, apparently they are quite good at haggling and getting bulk discounts, or using generics. So wherever it is they waste money, it is not on drugs.
The MoD is a different story altogether.
D, let's call it three for sake of argument.
... so Mark, this 3x figure for avoidance...
Does it include the non-taxed interest on my ISA?
The rebate (yes, I get the sense you disagree with this, but..) I get on my contributions to my pension fund?
The NI I don't pay because I do that contribution?
The VAT/excise/whatever I don't pay because I
purchase stuff not in the UK? (This last mentioned because it struck me - If I get drunk while on assignment the States, I'm not paying UK Duty on getting drunk - is this tax avoidance? The proles need to know!!)
I'm not talking about tax avoidance which is perfectly legal, no matter what some people may think. I'm talking about tax evasion. None of the things PJH mentioned are illegal so none of them are tax evasion.
The 3x figure is for evasion. If you want to throw avoidance in there too you're on your own.
What Jimmy Carr did (avoidance, not evasion) wasn't illegal either.
He was embarrased into admitting his avoidance was unpallitable, and recanted since it seems his target audiance seemed to read the papers that reported it.
The "cost" of tax evasion is negligible to the economy as it's generally spent more wisely than the state. The only real cost is the gain to accountants from unnecessary tax complexity/
PJH, no avoidance doesn't include those things. It stands to reason if the shadow economy, cash in hand jobs etc are 5% to 10% of the economy, then tax evasion is also that much.
What about a self employed person who claims 75% business mileage when actually it's only 65%? What about people using home as office who don't pay Business Rates? What about people claiming single person's Council Tax discount who take in a lodger? What about women who wear children's size clothing with is VAT exempt? What about employees who claim to be self-employed to save NI?
There are infinite grey areas between avoidance and evasion, like what Jimmy Carr did (these grandiose schemes are dreamed up by lawyers and most of them come unravelled at some stage), or buying more cigarettes in Belgium than you will smoke yourself and giving your friends some, I'm generalising here. Of course, there are no official figures for evasion or avoidance or anything else, except maybe for VAT carousel fraud, which they once said reduced VAT receipts by about £8 billion a year (or some such staggering figure).
Suffice to say, D and I have agreed that "three" is the multiple, which seems about right as three times as much tax is raised as is spent on pensions and welfare payments (and it's not like pensioners aren't at it as well).
SB, possibly true - what the taxman loses, you gain in cheaper builders. The problem is that for a given tax take, if some people don;t pay at all, other people have to pay a higher rate, so in net terms, there are dead weight costs (it's moving away from a flat tax where everybody pays the same rate).
And we can say the same for benefit claimants, they can spend "their" money more wisely than the state would have done.
PJH wrote: What Jimmy Carr did (avoidance, not evasion) wasn't illegal either.
He was embarrased into admitting his avoidance was unpallitable, and recanted since it seems his target audiance seemed to read the papers that reported it.
Agreed. But that's where I differ from Richard Murphy and his supporters. As far as I'm concerned, tax avoidance is the result of stupid taxes and badly drafted tax regulations And so totally the government's fault. So it's up to the government to fix it by fixing the tax and benefits system.
What Jimmy Carr did on the tax side is the equivalent of what a young teenager does on the benefit side when she becomes pregnant to get a council house and an income. It's not illegal, it's not fraud and it's not right either. But I don't blame them. Jimmy Carr and the girls are just responding to economic incentives. If HMG doesn't like what happens it's up to HMG to change the system.
And I hate to say it (nah, not really) but both benefit fraud and tax evasion could be cut to very low levels if we switched to an LVT/CI system. And tax avoiders (who would have to avoid tax by having smaller or no landholdings) would be heroes rather than pariahs as they are under our current system.
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