Ritchie and tax fairness

Posted by Christie Malry on November 29, 2012 at 10:07 am

Ritchie has what he considers is a killer argument:

Fiona McTaggart MP said in a debate on Google’s tax affairs on Channel 4 on Tuesday that she expected companies to pay their fair share of tax.

Madsen Pirie of the Adam Smith Institute immediately jumped on her argument.

“Who is to say what’s a fair rate of tax?” he demanded (or words to that effect).

Fiona’s response was spot on. “Parliament” she replied.

Quite so. It’s called democracy Madsen. And it sets the rules, and the law.

But that's only half the story. Yes, Parliament sets the rate. But, much more importantly, it also sets the tax base.

Multinational companies have been criticised for avoiding tax. But what they've been doing is entirely legal. The legality point is relevant here because Ritchie is appealing to the primacy of Parliament. And they have designed what they consider to be a fair tax base, to be taxed at a fair tax rate.

It may be that political pressure gets too much and the base has to be extended further. They have the power to do that.

What isn't fair is to tell companies they'll be taxed on one basis, only to demand they be taxed more under a different basis because you don't like the first answer. That's what Ritchie and other tax campaigners are trying to do. Ukuncut et al are, in the view of Parliament, unfair.

Posted from WordPress for Android. Post may be amended or reformatted later.

People who read this post also read: