Tax and Tax Dodging
The Green Party has consistently campaigned against tax dodging – both the ‘legal’ (though morally reprehensible) tax avoidance, and the blatantly illegal versions. We have also campaigned against tax havens (including the City of London and British territories which specialise in this). We estimate that many tens of billions of pounds could be raised this way, rendering austerity and the cuts in public services unnecessary.
And it’s not just an issue about tax revenue loss, important though this is, it’s also a moral issue about opposing greed and wanting a better, fairer society.
Those who want to enjoy the benefits and amenities offered by a civilised society need to take on the responsibility of paying for those benefits and amenities – fairly, equally and openly – and according to their relative means. Indeed clamping down on Tax avoidance, alongside a new Wealth Tax on assets in excess of £3m, are a key part of our strategy to rebalance our society and roll-back the inequality that has grown so perniciously under the sponsorship of the last two governments.
Unlike Labour and the Tories, who both have donors, peers and MPs who have significantly benefited from tax loopholes they have conspicuously failed to do enough to close whilst in office, we have tried to act. Caroline Lucas, currently the only Green MP, sponsored a bill to do something about Tax Dodging in 2011. It was not supported by Ed Miliband or David Cameron. Caroline was also one of the first MPs to indicate her full support for the idea of a new tax Dodging Bill promoted by NGOs and Church Leaders.
The Green Group in the European Parliament has been leading the fight against Tax Avoidance within the EU and in particular our Finance Spokesperson, Molly Scott Cato MEP, has been very active in challenging the dodgy tax dealings of EU officials and Bankers in Luxembourg and elsewhere. More Greens in parliament means a real prospect that we can do something effective towards eliminating this stain on our society.
Here is what Greens believe the government should do, and what I pledge I would fight for if elected:
1. Give the fight against tax evasion sufficient resources to do the job properly: at the moment there are ten times as many staff investigating benefit fraud as there are investigating tax evasion – but tax evasion is sixty times greater than benefit fraud. Both Conservative and Labour governments have failed to address this problem.
2. The penalties for tax evasion need to be strengthened, and to include both financial penalties and prison sentences. Financial penalties should include recovery of the amount due, as well as punitive penalties on top of that amount. These penalties should be applied rigorously.
3. While there are good reasons – supporting business and charities – that tax payers should be able to ‘write off’ against tax, it should be made clear that the primary purposes of those parts of the tax code are not to reduce the tax burden, but to allow money to be invested or donated appropriately.
4. Organisations such as banks and accountancy firms which are found to have aided and abetted tax evasion should be subject to similar penalties to those who have avoided tax; fines should be sufficiently large to be punitive to financial institutions which routinely deal in billions. The government should also make it clear that companies which are found to be institutionally and chronically aiding tax evasion could be barred from operating in these areas.
5. As individuals at the top of a company can be charged with corporate manslaughter when their actions, or inaction, leads to someone’s death being caused by their company, the directors, executives and management of financial institutions should be legally responsible for the actions of their company in supporting and aiding tax evasion, and should be subject to financial and criminal penalties.
6. The government needs to end the position whereby banks and the ‘Big Four’ accountancy firms are held to be fit and proper advisers to the Government on the very financial affairs where they are advising their clients how to avoid their responsibilities. There is effectively a revolving door policy for legislators and civil servants moving into the financial sector, and financial sector staff entering Whitehall, which makes a mockery of the Government’s efforts to appear impartial in enforcing policy and law.
7. The government should increase pressure on countries which act as tax havens, acting in concert with the EU and other concerned countries, for open and transparent monitoring of funds transfers and financial transactions.
I genuinely feel that only the Green Party takes this issue seriously. It goes without saying that the Tories and Liberal Democrats don’t as they have done next to nothing to prevent it as the Coalition Government.
Labour too indulged the super-rich (Peter Mandelson famously said he was “extremely relaxed about people becoming filthy rich under Labour”), and did virtually nothing in its 13 years in office from 1997 to 2010 to close tax loopholes or close down the infamous excesses of the City of London.