Unhelpful things lefties shouldn’t say part 3 – alittleecon

3. If [INSERT COMPANY NAMES] paid their taxes austerity wouldn’t be necessary. This is the idea I find unhelpful: That tax avoidance means we can’t afford things like children’s centres. libraries and swimming pools. It just isn’t true, writes Alex Little in alittleecon.

That’s not to say we shouldn’t get annoyed about tax avoidance… It’s about fairness rather than needing the money to pay for public services. Government needs to collect tax, but if tax is seen as optional for one section of the economy, why should any of us pay what the government says we owe?

So why doesn’t tax avoidance mean less money for public services? Just as we could start with tax providing the money for government spending, we could equally start the circle with the government spending some money into the economy which then comes back to it in the form of tax… As most transactions in the economy are taxed… for every £1 the government spends, it will get back £1 in tax, only not in the same time period. Individuals saving and imports exceeding exports extends the time it takes for that £1 to come back to government, but the delay doesn’t prevent it from funding the programmes it wants to fund.

Read the rest of this fascinating piece on alittleecon.

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  1. bookmanwales September 8, 2014 at 7:28 am - Reply

    Yet another attempt to use confusion to deflect the tax issue away from the wealthy. Basically taxing the wealthy doesn’t help the economy but better use of resources does ?

    Mr Bloggs earns £30k a year, pays income tax and NI on it, buys food, clothing, utilities, etc and is taxed on almost every penny he spends. Manages to save a few quid and then pays tax on his interest. Dies and then has to pay tax on all the things he bought on wich he has already paid tax.

    Mr Banker, gets a million pound bonus, sticks it in offhore account , pays no tax or NI on it, pays no tax on his interest, retires with a few million to some overseas haven and spends his money there.

    Mr Corporation, makes huge profits providing services the public are taxed to use via vat, pays no tax and sticks his huge profits again in overseas banks, no tax on interest etc. Then lends this money to the government and earns a sizable tax free interest payment that is paid for by the very people taxed to pay for a service he provides. Oh and don’t forget the odd few million pound he is given here and there for giving us the opportunity to buy his goods / services.

    I wonder which Mr I would rather be ??

    • Mike Sivier September 8, 2014 at 9:22 am - Reply

      The original article explains that Mr Banker and Mr Corporation, by keeping money that should at some point come back to the government in tax, are increasing the government’s deficit (this also happens when imports are greater than exports, which is why that is also important – although it doesn’t seem to get as much news coverage now that it is a habitual part of our neoliberal economy).
      The piece also makes clear that, if the wealthy aren’t being taxed, there is no justification at all for taxing the poor.

  2. Jeffrey Davies September 8, 2014 at 7:38 am - Reply

    ah but then they told every one of their mates even some senior civil servants that being payed in that offshore account saves them more yet these people are in power and tell the rest the pooir to pay while they themselves flout this law of paying into the pot jeff3

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