Is tax avoidance eating our democracy?

Those at the bottom of Britain’s profoundly unequal social class system are subjected to a relentless barrage of criticism and condemnation. It seems no accident that whilst shows such as Benefits Street, Skint, On Benefits and Proud, among others, have become vehicles through which righteous indignation can be legitimately expressed regarding how certain elements of the population live, especially when such lifestyles are supported by taxes paid by ‘hard-working families’. The protagonists of these shows are often represented as part of an ‘undeserving underclass’ that is fraudulently or dishonestly receiving support from the state.

On the contrary, shows such as ‘Tax Dodgers Street’ are conspicuously absent and no television shows as of yet have been dedicated to exploring the lives of tax avoiders or evaders (perhaps partly because they are less willing to receive such publicity). Tax avoidance and evasion have, of course, not been completely absent from public debate in the mass media. The Panama papers pushed the tax affairs of David Cameron’s father into the spotlight, ‘nondoms’ dominated the 2015 general election for a few days, and, in recent years, a number of celebrities have been embroiled in tax avoidance scandals including the most recent Paradise papers leak. Notwithstanding these events, most of the media attention on issues related to tax and benefits has focussed on the bottom of the income distribution rather than the top, suggesting that tax avoidance and evasion and benefit manipulation and fraud may not be considered moral equivalents.

But if the many problems and injustices that not only afflicts, but also defines British society, is to be solved or ended, then the spotlight must not be controlled by the powerful. At a time of staggering global inequality and the unblemished rise in poverty within the UK, it is perhaps surprising that people are not more animated by the determination of the ultra-rich to avoid their obligations to support our roads, hospitals, soldiers and schools.

It seems that in some cases, our society and law favours the powerful. For example, the sanctity of property is judged to be more important than the rights of human beings: the rich can leave properties empty for long stretches of time, even as million suffer the consequences of a housing crisis, and the law will protect the absent property-owner from homeless squatters. British prisons are full of people from deprived backgrounds, mostly suffering from mental distress: over 6 in 10 male prisoners and 5 in 10 female prisoners suffer from at least one personality order, according to the Prison Reform Trust (2016).

Benefit fraud – costing an annual of £1.2 billion, or 0.7 per cent of social security spending – is treated as a despicable crime, while tax avoidance – worth an estimated £25 billion a year – is even facilitated by the state, with accountancy firms that promote such tax avoidance seconded to government to draw up tax laws.

The modern establishment relies on the mantra of ‘there is no alternative’: potential opposition is guarded against by enforcing disbelief in the idea that there is any other viable way of running society. So the Britain that existed before the emergence of the modern Establishment, in the decades following the Second World War, is portrayed as some sort of dystopia: a statist, dreary, aspiration-sapping hell hole besieged by bureaucrats and out-of-control trade unions.

In seeking to challenge the demonization of this period of recent British history, it’s important to point out that post-war Britain had higher taxes on the rich, stronger trade unions and widespread state intervention in the economy. It has also experienced higher levels of economic growth, which was more evenly distributed than today. Today’s establishment – formed from the late 1970’s onwards – has presided over a Britain with lower levels of growth, which has been less evenly distributed, as well as the three great economic crises of post-war Britain: the early 1980s, the early 1990s and post-2008. The subject of taxes has been an ongoing issue for many years, but have we become complacent in where our money actually goes. Is the government, the media or our own ignorance to blame? Should we be more scrutinising of the information that we are fed and form our own perceptions on social class and democracy?

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