Wednesday 11 February 2015

"What will you do to crack down on tax dodging?"

My fellow PPC Rohen Kapur and I have received identically worded emails via 38 Degrees as follows:

I'm concerned about the recent revelations that HSBC has been helping the super-rich dodge their tax, and that the government has not been acting to stop this.

As a prospective parliamentary candidate in my area, can you let me know what you pledge to do to crack down on tax dodging and prevent scandals like HSBC from happening again?

I'm also concerned that HMRC are not doing enough to investigate these cases to recoup the tax and instigate legal proceedings.
How do you intend to deal with this?

1. Yes. We, YPP, will crack down on tax avoidance. That's at the core of our manifesto.

Unlike the Conservatives or UKIP, we are not primarily funded by landowners, land speculators and the financial sector, so we are quite happy to point out that the biggest drains on the real economy are exactly those people. Let's not dwell on who funds the Lib Dems, Labour and the Greens :-)

2. Our tax policy is to reduce taxes on output, employment and profits to one single flat 20% tax on all incomes (no tax breaks, no loopholes), and to collect the other half of revenues with Land Value Tax (approx. 3% of current selling prices) and a bank asset tax. Combined with welfare simplification and reform, all working households will be thousands of pounds a year better off. The gains to our core voters will be even higher.

3. With a radical simplfication of taxes on earnings, instead of HMRC having endless different departments chasing all manner of different layers of taxes and adminstering all manner of different tax breaks and subsidies, HMRC will be able to focus all their efforts on collecting that single flat 20% without fear or favour.

In particular, we would ensure that withholding taxes are imposed on all profits siphoned out of the country via interest or royalties. And shut the revolving door between the Big Four accountancy firms and senior ranks of HMRC or Downing Street.

4. As to the banks, they lurch from one scandal to another. What have we had since the financial crisis? LIBOR rigging, PPI misselling, interest rate swaps, money laundering, tax evasion, insider trading... The list for the years leading up to the financial crisis is of course endless, in every country in the world.

Remember also that about eighty per cent of bank lending is secured on land. With a proper Land Value Tax in place to keep land prices low andstable and a hefty bank asset tax to discourage credit bubbles, banks would be cut down to size and forced to focus on proper lending to support the productive economy (i.e. finance to small businesses or short term consumer loans).

The government holds the trump card in all this. If banks do not play by the rules, their banking licences will be withdrawn. End of.

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