Thursday, February 19, 2009

Scary Monsters

In surveying the latest as more and more governments spend more and more of your money (will you ever get a 'merci'?) in order to "save" those businesses and individuals who have demonstrated they are incapapble of making rational decisions with their own finances, one sees the hobby-horse crowd is still busy beavering away:

The global crackdown envisaged by Brown follows the Guardian's special series, the Tax Gap, which highlighted the ways a range of Britain's biggest companies have employed secretive tax arrangements to reduce their liability. HM Revenue & Customs estimates that the size of the tax gap, which has seen companies shift ownership of brands to offshore tax havens, could be anything between £3.7bn and £13bn.

The other members of the G7 - plus the 13 other slightly less affluent members who make up the G20 - lose similar amounts. This means that the world's main industrialised countries could be losing in excess of £100bn in tax revenues a year.
Big scary monster numbers which various governments can no doubt spend far better than you the individual. What happens when our old friend perspective makes an appearance? World GDP is estimated to be around 60 trillion USD in 2008. The G20 represents around 90% of world GDP, so around 54 trillion out of the aforementioned 60. Great, wonderful, how exciting. So, what does the mentioned £100bn "lost" taxes (145bn USD) actually mean in reality? .003%. That would be three-tenths of one percent of the total G20 GDP in 2008.

Of course this meaningless percentage which is "lost" (to who actually?) is not the reason for the socialist crowd to ride the tax-avoidance train. There are undoubtedly personal reasons for some hard-left individuals: hatred of those more successful, seeking "research" funding for their own "think" tanks, etc. However, the centralising tenet for most of the tax-avoidance is bad (yet oddly not illegal) crowd is the greater expansion of the state and government to control more and more the individual. Harmonisation of tax rules (negating comparitive advantages) among countries and increasing taxes levied (negating the individual evermore) are the true end games of this very sordid group of social-justice-fetishists.

More control over the individual, more funding for the state, more goodies to pass out to the properly aggrieved and approved.

For those keeping score in the UK, the high figure (£13bn) quoted in the original article represents .007% of total UK GDP in 2008. That would be seven-tenths of one percent. Put another way, the £13bn represents around 7.5 out of 365 days of total UK government spending. If the "lost" taxes are actually closer to the £3.7bn number, well ....... you get the picture (2.2 out of 365 days).

Quite the fuss over such a microscopic slice of the financial pie. Especially as none of this is illegal, in fact quite the opposite. As some would undoubtedly say, Gosh....

Update: Right on cue, lest you think this whole tempest in a teapot about tax avoidance is all about do-gooderism and individuals paying their "fair" share:

The practice would have to be that strict conditions would also need to be imposed on the recipient state. In the case of Ireland the 12.5% tax rate would have to go. Beggars can’t be choosers.
Considering the source one assumes the Irish rate of tax would have to go .... up.

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