Cameron's taxing the poor and giving to rich
I WILL say this for David Cameron. He's not very good at governing. His economic policies are disastrous. But he's brilliant at public relations.
Just look at the way he's disguised the fact that his government of millionaires has showered tax cuts and tax benefits on the rich but disguised this by whipping up a storm of anger against "scroungers" and "life style beneficiaries" so the poor are being made to pay for the economic crisis the rich have created.
The Government's Welfare Reform programme is in a huge mess. Three quarters of the benefit cuts are still to come. Another £10 billion will be cut from welfare and Camerson is suggesting nasty ways of doing it, like taking housing benefit from young people. His universal credit, intended to be in place before the election, is proving so complicated and expensive that it will probably be postponed.
Yet, his response to this is to blame the work-shy and the lazy. This is both unfair and wrong. Most of the unemployed want to work. The great majority of those on benefits need them. If we spend a lot on housing benefit it's because we've not built enough council and social housing for 20 years. If unemployment spending is high it's because the economy has been run so badly we've lost so many jobs.
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This desperate populism is designed to distract attention from the fact that putting debt reduction above everything - jobs, growth, wellbeing, decency - is depressing the economy and increasing both the deficit and borrowing. More people out of work and more cuts in benefits will make this worse.
The only way out is to get growth and to boost taxes. Yet this government is letting increasing numbers of companies and the rich off their tax obligations. London has been turned into Taxhaven on Thames. The investigation staff at the Revenue have been drastically reduced. There are more people investigating Social Security fraud, which is mostly petty, than tax fraud which is in millions.
Elaborate schemes for tax avoidance, like the one Jimmy Carr used to get his Income Tax down to 1 per cent, are sold to high earners. Big companies handle their finances through tax havens. Multinationals use transfer pricing fiddles (such as a company charging its subsidiary £3,000 for a lavatory seat) or charge debt claims incurred elsewhere all to reduce their tax.
The result is a £35 billion gap between tax due from companies and tax paid, a write off of £11 billion in tax uncollected, and £25 billion owed by big companies in dispute. On the Public Accounts Committee we're investigating Vodaphone, let off £4.8 billion in tax, and Goldman Sachs which made £2 billion in profit but paid only £4 million in corporation tax.
An increasing number of big corporations are not fulfilling their tax obligations to this country. Firms like Google, Amazon, Microsoft, New International, which should pay corporation tax at 24 per cent are paying below 2 per cent and 8 per cent. So taxpayers pay more because corporations pay less. Britain provides these corporations with markets, trained and educated staffs, roads, and in a safe company environment. They don't help to pay for it.
It's a scandal. We'll propose a bigger and better investigation staff, a single purpose rule like the one in Australia which strikes down schemes purely designed to reduce tax.
We need a rule that all profits generated here are taxed here.
But until we do all that David Cameron and his millionaire ministers should stop blaming the poor, the unemployed, the sick and disabled and see that their fat friends pay what's owing.