The Obscurer

For The Avoidance Of Doubt

I’d written a quick draft of that rare thing called a “post” last Thursday when a phone call from school signalled a sickly daughter who needed collecting and caring for, and therefore the consigning of said draft into a saved items folder. And now the sickly one is back at school, and I’m not in work, and I’ve cast my eyes over the draft and decided it’s more-or-less fit to post as is, with minimal tidying-up, so I may as well.

For it’s the tax avoidance versus tax evasion distinction that was and is a frustrating one for me, relying as it so frequently does on such lazy thinking. Often is seems enough for someone to simply say, “ah, tax avoidance, remember, is perfectly legal” and consider it job done, as if “legal” and “right” are synonyms. We saw a close cousin of this attitude during the MP’s expenses scandal, with many of our elected representatives protesting that buying Persian rugs and duck islands at the taxpayers’ expense was within the rules and therefore fully justified and defensible. But we don’t, I think, feel that morality is or should be wholly defined by the law, or vice versa. And so the “tax avoidance is perfectly fine because it’s legal” argument is self-evidently bollocks.

For myself I think that tax avoidance is such a broad term that it is not an especially useful one. At one extreme you can have someone whose accountant is simply trying to make your money work for you by ensuring that you take full advantage of any tax reliefs available. Tax relief, I think we can assume, is put in place to encourage certain behaviour, be it home ownership, philanthropy, investment or whatever. Regardless of whether you think government should be promoting such things, it seems almost rude not to take the treasury up on its offer to partake in such activities. Personally I would baulk at even calling such things tax avoidance. They are, rather, just part and parcel of common sense money management and planning. At the border of the other extreme is, of course, tax evasion, which is illegal, plain and simple.

It is the middle ground where I think true tax avoidance lies; and “lies” seems to be the appropriate word. Take the K2 scheme that Jimmy Carr has been unfortunately vilified for (and I say unfortunately because I doubt he devised the scheme, and he’s surely not the most egregious example of tax avoidance in the country (that’s not even mentioning that there seem bigger fish to fry than tax avoidance) but is being picked on mainly for being famous; although, even at the most sympathetic face-value reading you would have to wonder why he didn’t ask questions when he was told his tax rate would be plummeting to 1% rather than just assume all was well). Insofar as I understand the scheme (and I doubt I do), money is received as income, but then rather than being taxed at source as it would be for (probably) you and (definitely) me, it is spirited away to a “company” in Jersey, and then “loaned” back to the original recipient at a vastly reduced tax rate. It is those inverted commas that show why it is dodgy; the company is not just any old financial institution providing a variety of services, but a shell existing solely to temporarily house someone’s income (yes, income); the loan is nothing of the sort, rather it is said aforementioned income being returned to that original someone minus the usual amount of tax. In short, the company and loan are a fib. What type of fib? May I suggest a big fib, and quite possibly a fat one as well?

That for me is true tax avoidance. It differs from tax evasion only in that it is considered legal, but it is considered legal only because the law hasn’t yet caught up with it; rather like a brand new hallucinogenic drug is legal only because the law cannot ban something that hitherto hasn’t existed, oh but it soon will. It is a world way from a financial expert carefully stewarding your money through the thicket of tax reliefs and exemptions to reduce your tax bill and ensure you don’t pay any more tax than you need to; rather it is a flagrantly dishonest procedure designed to shirk your genuine tax rate. And if we started referring to the former as, say, “tax planning”, and reserved the term “tax avoidance” for the latter – or even called it what it is, namely “tax evasion which isn’t quite illegal…yet” – then I think this debate may become a little more intelligent.

Death of The Obscurer?


Always The Bridegroom, Never The Bride

There are a handful of arguments against gay marriage, and they’re all pretty shit. Watching a Newsnight discussion on the subject yesterday turned out to be a frustrating dialogue of the deaf, but that’s half understandable. It’s difficult for the pro-gay marriage brigade to listen to and engage with the antis when the latter aren’t really making any sense. Here, seemingly, are the main points against gay marriage, and if these have been expanded upon elsewhere, and my objections either been put forward by those in favour of gay marriage or answered by those against, then it hasn’t happened within my earshot.

  • Marriage is a vital institution; important to the very fabric of society, and to tamper with it would be crazy.
    Let’s take that as read, for the time being, for the sake of argument. If marriage is so vital, surely extending it to other sections of society is a good thing? More importantly, just what does anyone think will happen if we tamper with this cornerstone institution which is suddenly so brittle? Literally, in what way would marriage be destroyed and lose its purpose? Even at a best guess, just what will be the terrible consequences of gay marriage of which we are being warned, because I’ve not heard anyone explicitly state what they think might happen, just some airy-fairy notion that bad things might. Personally I need more to go on before I agree with restricting others’ rights.
  • Marriage is an ancient tradition, and has always been between one man and one woman; to allow gays to marry is not to amend but to totally redefine it.
    Perhaps, but this begs the question why has it traditionally been between a man and a women? Did some philosophers get together to devise a societal institution and look at all the alternatives? Did they test the concept of gay marriage by way of Socratic dialogue including a full review of all the available empirical evidence before finally settling on the idea that this new fangled “marriage” thing was best served by only being between and man and a woman? Or has marriage been solely between partners of the opposite sex because of convention; because homosexuality was ignored, illegal or considered an abomination by various people at various times? And if so (and it is) is that any reason to stick with the status quo?

At heart the anti-gay marriage lobby is against gay marriage because they don’t like the idea of marriage between gays; but they know that this is a pathetically week argument on its own, as shown by the briefly ubiquitous Milo Yiannopoulos last night openly stating that he thinks straight relationships are superior to gay ones but failing to give a reason, because there isn’t one, because they’re not. So to bolster their case he and others engage in a reductive, circular argument drawing on the historical fact that marriage has always been between a man and a woman; but the reason marriage has historically been between a men and a woman is because historically people like them didn’t like the idea of marriage between gays. Which is where this paragraph came in.

Anyway, this is before we even get onto the other nonsense excuse heard last night and seemingly made up on the hoof that marriage is about bringing up your own biological offspring – obvious bullshit for several obvious bullshit reasons far too obvious and bullshitty for me to waste my time with here – and the old canard that marriage is the best way to build a stable relationship for said children, a cart before the horse argument since surely it’s rather more likely that it is stable relationships that do more generally lead to marriage.

Finally, though, I will concede one point; the fear that if gay marriage is legalised equality legislation will force churches to carry out gay wedding ceremonies against their consciences. Now, I have my doubts here – churches seem to find lots of reasons at the moment to refuse to marry people they don’t want to, and I don’t see why that would change – but funnily enough this issue is in the same ball park as the subject of that post; you know, the one I didn’t write about last week. So perhaps this will give me the kick up the arse to get it finished.

So consider this a rapid-fire teaser post to another thing possibly coming soon. Something to look forward to, you lucky people.

Cui Bono

I’m going to write that post if it kills me.

Not this post. Oh no, not this post. This post I’m dashing off because it seems to me that lots of people are missing the point about the impending changes to child benefit. And after all, erroneously thinking I’ve a cogent response when others are missing the point is the only reason to keep this blog this side of the mothballs. No, I’m saying I’m going to write that post if it kills me, the post I’ve spent the past fortnight trying to find the time and inclination to finish off.

But enough about that post. The point of this post is to address to the fact that (almost?) every report over the past few days referring to the half-brained clusterfuck that is the government’s “plan” for child benefit has been premised on the fictional idea of one household with a single-earner on an income of £80,000 losing their child benefit, while the dual-income household next door bringing in two incomes of £40,000 are allowed to keep theirs. Oh the humanity!

Perhaps. But why get hung up on child benefit? If we leave that to one side for a minute, the anomaly we are all suddenly getting worked up about is baked into the tax system already. Let’s take those two households again, each with the same gross income of £80,000; even without child benefit the household with two incomes will be better off in the first place due to their having two tax-free personal allowances; add in the fact that the single-earner household will then pay some of its income tax at the higher 40% rate while the dual-earners only pay at 20% and you could say we have another inequity right there.

This objection to the child benefit plans, then, rather than highlighting some terrible new unfairness, in fact just illustrates an existing quirk regarding how individuals, couples and households are taxed in this country, and how clunky our system already is. Things are complicated even further once National Insurance is factored in; something that slightly benefits the single-earner household in this example, but more by accident than design, and which in truth provides yet another layer of clunkiness. But it is a clunkiness that universal benefits such as child benefit can ameliorate; they are simple to understand, cheap to implement, given to all so that the deserving* receive them while the undeserving* get them taxed away elsewhere while they’re not looking. The alternative is complicated rubbish that the deserving* don’t claim for while the undeserving* pay their accountants to collect for them. Despite all Iain Duncan Smith’s talk of a universal credit, the direction of travel seems to be towards the latter.

The real daftness about these child benefit reforms is not so much the aforementioned and well-worn scenario of two fictional households, but more the case of an individual who earns just above the higher-rate income tax threshold and who, while paying 40% tax on but a fraction of their income, will also lose all of their Child Benefit at a stroke, potentially leaving them with a lower net income than a supposed lower earner situated just below the threshold. I don’t know if there is such a thing as a negative marginal tax rate, but if there is then this government has just found it. So well done them.

You’d almost think they’d cooked up a nefarious scheme to serve as an object lesson in the value of universal benefits, only they haven’t. This isn’t so much the “cliff edge” problem people have been talking about as some demonic game of financial Snakes and Ladders. Now, the government has stated it is looking into methods to deal with the problems thrown up by their half-baked plan dreamt up overnight to grab headlines during a party conference. But what?

Well I suppose they could concoct some further sort of means test, devise a kind of taper system, this would necessitate implementing an appeals process, and of course a review system when the wrong amounts are paid out…basically bugger about with child benefit until it is as expensive to administer and inefficient as the rest of the benefits system. Alternatively you could leave child benefit as is, and expend your energies instead on trying to make the the tax and benefits system in general more simple and straight forward.

I’d favour the latter myself, perhaps utilising something as a benchmark so we can gauge our progress, that of an actually existing example of a simple and efficient benefit. Child benefit, say?


*There must be some better terms to use here rather than “deserving” and “undeserving”, but I can’t think of them. Intended target group and unintended target group? Optimal and sub-optimal recipients? They sound almost as clunky as the government’s plans for reforming child benefit.

Morality Play

After Sunday’s derby match, and United’s defeating of City, a couple of tweets caused some mirth in the obvious quarters. Namely this

and this!/OfficialMR2/status/156041128662155264

The mocking responses were many and varied. “Good luck in the Fourth Round of the Moral Cup”, for example. And “enjoy your Moral Cup success”. And, “here’s to the Moral Cup Winners 2012”. And, well, mainly that same joke, really, over and over and over.

And fair enough, I guess. We lost, and claiming a moral victory is pushing it. But our performance was excellent, and the thing is, I know where Messrs Kompany and Richards are coming from; indeed it’s not a million miles away from what I was feeling after the match. To be precise, I remember saying “it’s not quite a moral victory, but it doesn’t feel far off.” And judging by the reactions of the fans in the stadium, subsequent conversations with other City supporters, and even Alex Ferguson’s downbeat assessment following his side’s 3-2 win, I’m far from alone here. (I also knew that, a couple of days later, being out of the cup, that fine feeling would count for nothing. And here we are.)

So damn those players for expressing themselves a little clumsily, if you like; yes, damn them all. And bring on your ridicule and your opprobrium. But we can take it. In fact we can do better than that. The fact that the players and the fans felt so positive in defeat to our bitterest rival, and so in tune with each other despite our cup exit, is something I take as a hugely encouraging sign.

Because, ultimately, I think it all comes down to whether or not you believe there is more to football than merely winning matches. I certainly do, and I don’t believe you’re a true football fan if you don’t. Real supporters know the thrill of a tightly drawn game, and the boredom of a functional victory; they recognise how a battling defeat can give hope for the future, while a fortuitous win may merely paper over the cracks. Not surprising, then, if for certain United fans – the kind, say, who equate a lack of trophies with a lack of history – this is a concept they they simply fail to grasp, and so find ripe for mockery. Gratifying too that, despite our recent influx of petrodollars, it is something that so many City fans do still understand.

For now, at least.


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