Saturday, March 06, 2010

Johann Hari: The worst thing about Ashcroft is that his behaviour is legal.

It's a new day and a new report of scandal with Ashcroft in the headline.

That's to be expected. It's pretty much open season just now.

But what outraged me yesterday was a line in a column by Johan Hari.

Much has been made of the fact that Ashcroft is a non-dom, although it has been highlighted that this means he pays tax on his earnings in this country. But Hari says this:

The second group are non-British citizens who come here and refuse to pay taxes on their global fortunes. Under New Labour, this group has been so cravenly courted that the IMF actually classified the British Isles as a tax haven for foreigners until 2008. Now, they pay a paltry £30,000 a year to count as a non-dom – and then nothing. For people so rich, it's the equivalent of handing us the small change down the back of their settees.
Can this possibly be true? That there are people who pay, not a percentage of their income as the rest of us do, but a simple one-off yearly payment? I am by no manner or means an expert on taxation but I found what Hari was stating to be utterly shocking.

Is there really a rich over class who are allowed to get away with such shenanigans?

Hari implies that there are and that many of our ills could be solved if we started to tackle tax evasion amongst the richest people in our society.
We are constantly being told by a chorus of conservatives that the financial crisis caused by their market fundamentalism can only be solved by slashing back spending. But this is unnecessary if only the overclass start to pay their taxes. Look at the country we are told is the exemplar of over-spending, Greece. In fact, it suffers the worst tax collection rate in the democratic world. According to a study by Professor Friedrich Schneider, some 25 per cent of taxes are not paid, making up $20.5bn a year. If Greece ended this culture, its financial situation would look very different. Why don't we hear this story, instead of the nonsense that they pay their teachers and nurses too much?
The vast majority of Britain's citizens pay our taxes, and we pay them on time because we fear the fines which late payments incur. The notion that there are a group of super rich citizens driving on the roads which our taxes have built, lit by the lights which we are paying for, kept safe by the police which our hard earned income has provided; who are, rather arrogantly, stating that their money is theirs and we have no right to expect them to pay a percentage of their income in taxation is, to put it frankly, sickening.

That's the real scandal behind the Ashcroft affair. Someone, somewhere; some faceless civil servant - or, worse, one of our elected politicians, elected to look out for our interests - actually came to this deal with Ashcroft and thought that what they were agreeing to was reasonable.

Whilst ready to fine the rest of us or, worse, throw us in jail should we attempt to evade taxation, they agreed that one of the richest men in the world could pay a one-off £30,000 a year fee and live as if his obligations to our society had been met. Even worse, that he could sit in the House of Lords and pass laws, including laws on taxation, that the rest of us would have to live by.

Nor is Ashcroft the only offender here:
The invaluable Tax Justice Network has calculated that rich individuals "avoid" £13bn a year and rich corporations £12bn. (Indeed, a third of Britain's top 700 companies haven't paid any tax at all.) That's enough to double the education budget – or to pay off Britain's entire deficit in seven years without a single dent in public spending.
If the rich don't want to pay taxes in order to live here then the answer is simple. Let them leave. But if they want to buy huge swathes of Mayfair and enjoy the pleasures of one of the finest capitals in the world, then there has to be a price for that. You don't pay, you don't play. Simple.

And Hari warns us that there is a terrible lesson for all of us here about the real character of David Cameron:
The Conservative Party has been engaged in a 10-year cover-up that tells us a lot about how they would govern the country. Since he became leader of the Party and accepted more than £10m from Ashcroft, David Cameron has had a clear choice. He could have done the patriotic thing and revealed publicly that Ashcroft was avoiding paying £127m in taxes – the sum that would have accrued to the British people if he had kept his send-me-to-the-Lords pledge. Instead, Cameron chose to protect Ashcroft and his private interests with a wall of obfuscation. It's an extraordinary insight into the man who wants to be our next prime minister. Made to pick between the national interests of the British people and the sectional interests of the super-rich, he choose the over-class – and we should assume he would do the same in Downing Street.
Cameron and his mostly Etonian cabinet have refused to do anything as rude as to even ask Lord Ashcroft what his tax status was, despite the assurances he gave when maneuvering for his lifetime peerage.

They, instead, chose to look the other way. To assume that he had kept his word whilst, in actuality, he had refused to abide by the promises made by the Tory leader on his behalf.

Should the Tories get elected, we have just had a valuable glimpse into whose interests they will actually be serving. And they are not ours. When the super rich are involved, they will always, always, avert their gaze and look the other way.

Click here for Hari's article.

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