Economics Talk

mjt95 · Guest

Whitehall has blocked a request under the Freedom of Information Act to
disclose the cost of the "Group Litigation Orders" cases.

To explain, "Group Litigation Orders" are legal challenges from (mainly
large corporate) taxpayers against the government relating to the
government's proper application of its *own* law, the proper
implementation of European law, the practice of selective discrimination
upon the laws that the UK government want to implement and the de facto
racial discrimination inherent in UK law between foreign and British.

The most famous challenge comes from Marks & Spencer. M&S pays tax in
various European countries, but is domiciled in the UK (at least, it was
at the time!). M&S wanted to offset losses in a French branch against
profits in a UK branch, as it would have been able to do so had both
branches been in the UK. It did so with the principles of European
Commerical Law long-since agreed at European level. But the British
goverment rejected the claim. M&S rightly considered the rejection to
be a form of racism. Upon preparing the case, M&S discovered that the
British government's tactics were more than just plain racism.

Returning to the Whitehall's reply of the FAI request, Whitehall
admitted to fear of how the British media would react to the details.
In particular, releasing the facts could:

i) "lead to a press campaign against the UK involvement in Europe and
the reach of the European Courts."

ii) "call into question the government's adherence to its own fiscal
rules, which could increase the cost of borrowing."

Whitehall's reply then went onto some sort of apocalyptic
scaremongering, i.e. taxes would rise, inward investment would fall, sky
fall on heads, blah blah blah.

The apparent desparation of the reply has encouraged professional
observers to believe that the government well understands the
discriminatory practices of its tax policy and thus understood that it
could have lost £20bn of tax revenue. Like all hieves, the government
had pulled the poncey equivalent of "It weren't me wot dun it, guv; it
woz 'im."

Of course, the really depressing thing is that government obviously
hasn't accounted for the opportunity *benefit* of behaving honestly. If
the government obtained £20bn of tax from deceit, discrimination and
legalised theft, then how much *more* tax would it have collected by
being up-front, honest, transparent and predictable?

Put another way, with such a complex tax system, all taxpayers -
corporate or otherwise - need to consider the use of professional
advisors very carefully. Hardly surprising, then, that the government's
own staff don't understand the government's own laws! The government
should - but probably won't - appoint PriceWaterhouseCoopers to be its
tax advisors....!

Looks like the UK still has much to learn from Estonia, Canada and
Australia.

All of which boils down to the inevitable question: when will we be rid
of the economically illiterate shitheads of the Treasury?

(source: Accountancy Age, 12 Jul 2007, VNU publications,
http://www.accountancyage.com/ )

--

mjt

A supporter of http://www.taxpayersalliance.com/, fighting to stop the
government ripping off the taxpayer.

Tax cuts v public services? No! Tax cuts *for* better public services.