From the TUC

Labour and tax avoidance

03 Feb 2009, by in Economics

Over at Labourlist there’s an entertaining spat between Derek Draper and the Tax Payers Alliance, and rightly they commend Vince Cable in the Guardian today (on day two of their excellent tax series.)

But I can’t help feeling that this is just a bit superficial. As one of the commenters reminds us there is a difference between tax evasion (illegal) and tax avoidance (legal, if sometimes pushing at boundaries). Tax avoidance is to some extent therefore a battle between the tax authorities and creative accountants and to another extent a set of activities tolerated by the government. Richard Murphy has rigorously documented UK government collusion with tax haven secrecy and has too many examples where the Treasury has given into big business lobbying on tax – a big contrast with President Obama.

The big question is why has Labour been so uninterested in this issue. The TUC, Polly Toynbee and Vince Cable have been plugging away, but Labour is late to the party.  Why don’t we have a general anti-avoidance principle? Why don’t ministers call the bluff of companies that threaten to move? Why don’t UK ministers support a common EU corporate tax base (not rate)? Why don’t they suppport country by country reporting?

I like sticking it to the Tax Payers’ Alliance too, but that is not quite enough.