The issue of politicians and their tax returns has been in the media once again recently, sparked in part by increased scrutiny of tax avoidance measures. The prime minister has said (via the chancellor) that there are no plans to publish his returns, while the man who would like to be in his shoes, Boris Johnson, said on a trip to the US last week that other UK politicians should follow his lead (and those of their US counterparts) in publishing their returns.
Here. the Voice’s Nick Thornsby and Paul Walter debate the issue. Please do share your thoughts in the comments below. You can read Part One here.
Nick Thornsby: A number of people in response to our opening gambits went further and suggested that the tax affairs of everyone should be a matter of public record. In some ways I would have less of an issue with this than singling out politicians for special attention (though I am unconvinced by the logic of the argument).
Ultimately, I think that inherent in the case for politicians releasing their returns is the acceptance of the widespread public belief that politicians are venal, self-interested cynics. A number of them may be, but many are not, and we are not going to correct that picture by forcing politicians to lose yet more of their privacy.
The United States is an interesting example. It seems to me that the routine release of tax returns has had a negligible impact on public faith in politicians, but has, potentially, acted as a fig-leaf of transparency (so to speak!) covering much more fundamental problems arising from the corrosive power of money and vested interests.
And, of course, the release of tax returns by senior politicians there is accompanied by the release of certain medical records, too. That, I think, would be rightly accepted by most here as an unjustified invasion of privacy, yet the logic for it is the same.
So we are back to striking the right balance. There are deep problems with politics in this country, the solutions to which I think we will broadly agree on. I am just not convinced, however, that less privacy for politicians and candidates is part of that package.
Paul Walter: The problem is that taxation is a very controversial area – particularly tax avoidance. Also, there are things which are legal which I suspect the public want to see made illegal. So politicians, who obviously have a key role in tax legislation, ought to voluntarily publish their tax returns so they are above criticism here.
Jimmy Carr isn’t an elected politician but the public seemed to think it was OK that his tax affairs – completely legal at the time – were the subject of open scrutiny.
And, strangely, perhaps paradoxically, the politician whose financial affairs do seem complex enough to warrant release of his tax returns is the very person who is calling for politicians to release them – step forward, Alexander Boris de Pfeffel Johnson. On top of running London for a princely salary, he gets paid something like ten times the national average wage for knocking off 800 words in his pyjamas on Sunday morning, and has had some complex American dealings. I am not a fan of his, but on this occasion I salute his bold stand on this. It is quite right that voters can see whether or not he is paying his fair whack of tax.
But, as I have labouriously repeated, this should be voluntary, and if politicians decide not to volunteer their returns, then voters can make up their own minds about thie reluctance to do so.
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14 Comments
I am unsure what publication of MP’s tax returns would achieve. If some of the electorate believe that all politicians are money grubbing crooks ( ignoring the honourable exceptions like for instance Vince Cable and Ed Miliband et al, are they going to have their cynicysm reduced by this measure? I suspect that a deep rooted cynicism will cause them to believe that they don’t trust politicians to be honest on this either.
There are people still operating in the House of Commons and the House of Lords that many believe should not be there after the revelations of the MPs expenses scandal, I don’t expect the general cyncism to reduce appreciably whilst this is still the case.
I would welcome any strategy that does reduce cynicism about MPs in general, because I believe that the current situation is damaging to all parties and potentially to our democracy.
It is parliament who are constantly reminding us, the public, that, “If we have nothing to hide; we have nothing to fear”….
Two comments:
1. The comparison with the US is a nonsense. In the US, everyone has to file a tax return. In the UK, it is only those with complex arrangements (freelancers, company directors, higher rate taxpayers who want to claim pension tax relief) who need to do so. So by asking candidates to release their tax arrangements (whether voluntarily or not), you would be discriminating on income.
2. More generally, tax returns are only relevant in context. Although the Daily Telegraph purchased the data on MPs’ expenses, their journalists showed they were unable to identify even basic facts such as, for example, whether an MP had, in fact, claimed for everything listed on a receipt. I have very little faith that the majority of journalists have the capability, let alone the capacity, to identify anything significant from any candidate’s tax return.
Guy
On point 1 people could publish their P60s generated under PAYE if they didn’t have a return.
Not that this is an argument for or against just what it would practically mean.
Expats
It is not parliament as a whole but successive governments in trying to get legislation through. One such advanced of this train of thought was Tony Blair, funny his arrangements are significantly more opaque than even most very rich people.
Psi 26th Feb ’15 – 12:48pm ……Expats…It is not parliament as a whole but successive governments in trying to get legislation through. One such advanced of this train of thought was Tony Blair, funny his arrangements are significantly more opaque than even most very rich people….
Psi, As far as Blair is concerned, I’ll repeat a remark once made about Harold Wilson…”If he swallowed a sixpence, he’d ‘sh*t a corkscrew”.
@Guy – It’s worse than that. By twisting (or ignoring) the perfectly legitimate reasons behind certain tax situations politicians could be tainted and traduced in a way that would make it very difficult to defend themselves. The media has a 5 second attention span and “tax cheat” is two memorable syllables.
See the treatment of Brian Paddick a few years ago for a salient example: http://markreckons.blogspot.co.uk/2012/04/guido-shows-why-tax-transparency-wont.html
It is clear there is much confusion about just what exactly we will learn and gain from the disclosure of “tax returns”.
As Mark Thompson’s blog makes very clear there can be a large difference between someone’s actual income in any particular year and what actually is required to be disclosed to HMRC on their paper/online SA100/SA200 et al. for that year, which in turn can be different to income on which HMRC deem to be taxable.
To my mind the current outcry on “tax avoidance” (ie. tax mitigation, tax avoidance and tax abuse) by both companies and individuals when presented by a large headline figure divorced of any context, is becoming an ill informed witch hunt, based wholly on envy – the religion of the mediocrity, and we all know the final outcome of witch hunts conducted by mob’s and vigilantes and it isn’t justice…
As there happens to be a fairly direct link between a politician’s pecuniary interests and the policies he or she can be expected to support, anything that reveals more about those interests to the voter is to be encouraged.
‘In the UK, it is only those with complex arrangements (freelancers, company directors, higher rate taxpayers who want to claim pension tax relief) who need to do so.’
Also people with several pensions, or untaxed income such as government bonds or rents. My wife has had hiccups where theRevenue were getting tax on a pension wrong, and she would have been paying extra tax if she’d followed the letter they sent saying “Now you’re and old dear, you don’t have to file a tax return.” She spent quite a lot of time on the phone sorting this out. Then a few years later they implemented self assessment 3.27 (randomly generated by me software version number) and she had to do it all again, but it was harder to find a person on the other end of the phone.
The computerised self assessment system did the easy bits first, more complex bits followed over a decade or more. Family trusts, for the child of deceased person, are still not quite there.
Jayne Mansfield – ed moliband fell well short of his own elevated standards when he planned (with his mother and brother) to avoid inheritance tax on his father’s estate.
Tabman
then used the defence “my mummy did it not me”
David-1, if you really are interested in knowing what may be driving your PPC/MP then perhaps you should be lobbying for PPC’s/MP’s to go through something like the Met Police background checks and have the results made public. Putting to one side all the basic security clearance and criminal records checks, these go to another level of financial investigation, looking at income and outgoings to see if a person is living within their means or not. It isn’t an easy set of forms to complete, even if you maintain your finances in good order.
But the real issue is that we are too keen to get the stick out when actually what is needed is more of the carrot – there are a good reasons why people are given bonus’es linked to targets.
@ tabman @Psi,
I think you will see that I was referring to the MP’s expenses scandal which I assert is the cause of so much of the current cynicism about MPs.
Further cynicism is caused by second jobs, which many believe can be the cause of a conflict of interest.
My own view on tax avoidance is that one should revisit the rules and make changes where necessary, not complain about people who operate within them.