Tax Avoidance is Normal in our Culture

[Crown]

No, not in Greek Culture;

Lord Fink: tax avoidance is normal in British society

Tory donor who threatened to sue Ed Miliband also says he took ‘vanilla’ tax avoidance measures

Lord Fink, the former Conservative treasurer who threatened to sue Ed Miliband over his comments on tax avoidance, has conceded that the practice is normal in British society.

The peer – a multimillionaire former hedge fund manager turned Conservative donor and philanthropist – also said he did take “vanilla” tax avoidance measures, including transferring shares into family trusts while he worked in Switzerland.

In an interview with the Evening Stardard, Fink said: “The expression tax avoidance is so wide that everyone does tax avoidance at some level.”

On Wednesday, Miliband used parliamentary privilege to condemn “the tax avoidance activities of Lord Fink”. It was being stressed by Labour sources that he had not accused Fink of tax evasion – but the Labour leader was due to reiterate his comments in a speech due at lunchtime on Thursday.

The row between the two men had been in danger of escalating and diverting attention from the issue of wide-scale tax evasion and the inability of UK tax authorities to check the practice. Labour is also trying to launch a major education policy on Thursday on capping class sizes for the youngest pupils.

On his war of words with the Labour leader, Fink said: “I didn’t object to his use of the word ‘tax avoidance’. Because you are right: tax avoidance, everyone does it.”

Fink had threatened on Wednesday to sue Miliband if he repeated his remarks, and his aides said the Labour leader was intent on doing so.

But the day after, Fink indicated that he did not want to take legal action. “I don’t even want to sue Ed Miliband,” he told the Standard. “In my life I have been libelled a few dozen times and I have never sued anybody, even for some comments that were quite outrageous.”

Fink did indicate that he took exception to Milband’s remark at Wednesday’s prime minister’s questions about Cameron being in hock to “dodgy donors”.

“If he simply uses the words ‘Lord Fink did ordinary tax avoidance’, then no, I couldn’t sue him. But if he made the statement ‘dodgy’ about my bank account, that was potentially libellous. That was the issue I took exception to.

“I also took exception to him saying I had questions to answer. In fact, whenever anyone has put questions to me, I have answered them.”

On Thursday morning, Labour sources suggested the reference to dodgy donors was not directed at Fink.

Fink said his tax planning was at the “vanilla” or “mild” end of the spectrum, and he stressed that he rejected expert advice that he could save a fortune in tax by adopting more “aggressive” measures.

“I chose the mildest end of the spectrum that I was advised on,” he said. “What I did … was at the vanilla, bland, end of the spectrum.”

Fink said he “used the opportunity ... to set up some simple family trusts” while on a four-year posting to Switzerland. He transferred some shares to his children and his wife.

“Really what I was trying to do was, not like a living will, but to allocate a very small shareholding to each of my children so they could pay deposits on houses in London one day after we returned. There was nothing complex and they weren’t aggressive tax planning.

“My family and I paid tax on all the dividends, both in Switzerland and the UK. They were done because my children were under 18 and I wanted them to have something to help them make their way in the wider world.”

The background to this is The HSBC files which basically document how the rich and mighty used HSBC Swiss to launder and avoid paying millions (if not billions) in taxes. Most of them are donors to the Tory government (shock) from the UK perspective.

My favourite was how two owners of Le Monde launched a scathing attack that the editorial staff dared to print the names of the people who dodged taxes (no doubt many of them personal friends of theirs);

Two of the owners of Le Monde have hit out at the newspaper over its part in revealing how HSBC’s Swiss banking arm helped wealthy customers dodge taxes – with one declaring: “It wasn’t for this that I allowed them to gain their independence.”

How dare reports ... report eh?

[Patroklos]

I was under the impression the HSBC shenanigans were illegal. It sounds like he is saying he used loopholes to avoid taxes which I doubt is the case in the majority of the rich Swiss type events.

I have no problem with people paying as little in taxes as possible via legal means. You owe and should pay exactly what the tax code requires. No more. No less. Once you break the law you are just a criminal like any other.

[Eternal_Freedom]

I'm with Patroklos on this one. I'm not gonna hold it against him if he took legal (and apparently fairly minor) actions to avoid paying heavy taxes, especially since he still paid tax on the diviens in both the UK and Switzerland. It's a problem with the tax code, not people.

[Crown]

I agree that Lord Fink himself hasn't been accused of being involved in the greater HSBC scam, however he is a major Tory donor (as are a lot of the people who did in fact break the law with the HSCB scam), and anyone who knows anything about the Tories understand that their constant war against the welfare recipients in the UK should find it highly ironic that they constantly seek to demean, defame and disparage the weakest in society while at the same time find it 'perfectly normal to avoid paying taxes'.

These people are sociopaths. There is no other word that could possibly describe them.

[Borgholio]

I just find it humorous that a tax-dodger of his level is named Fink.

[Teebs]

Tax avoidance - the arrangement of one's financial affairs to minimize tax liability within the law.

Tax evasion - illegally escaping paying the tax you are legally obliged to pay.

It's quite true that tax avoidance is part of British culture, I'm fairly sure it's integral to the culture of every first world country.

From the UK and paid into a pension scheme*? That's tax avoidance. Have an ISA*? Tax avoidance.

I have no sympathy for politicians' apparent view that people should choose to pay more tax than they are obliged to, it's essentially the government choosing to hold people to a vaguely defined moral code instead of doing what it's meant to do and passing laws setting out what should be paid. I also think that the UK government (and many others) should crack down on tax avoidance opportunities, but simply criticising people for not paying tax they legally don't have to is a gross abdication of responsibility on the part of politicians.

*Income that's paid into pension schemes is, within certain limits, not taxed and when you take your pension you can take 25% of its value tax free.
**Special form of savings account where you pay no tax on your gains

[Elheru Aran]

Yeah, avoidance is something pretty much everybody would like to do. Money is something we hold dear as a culture. Without getting into the philosophical issues thereof, though, there is a very clear difference between using legal means to reduce your estimated tax burden, and using illegal means to put away massive quantities of money that the government can't touch.

[Crown]

Yeah, avoidance is something pretty much everybody would like to do. Money is something we hold dear as a culture. Without getting into the philosophical issues thereof, though, there is a very clear difference between using legal means to reduce your estimated tax burden, and using illegal means to put away massive quantities of money that the government can't touch.

And that's the rub; the people who can actually do it overwhelmingly belong to a certain socio-economic sub group, who just happen to have (by mere coincidence I'm sure) access to the corridors of power.

[ray245]

The idea that tax avoidance could be socially acceptable is problematic itself. Legally it is acceptable, but you are just being rather anti-social about it. Especially given the main mantra of conservatives is to reduce public spending, it reinforce the idea that there is no need to help others in society that weren't so lucky.

[Kon_El]

The idea that tax avoidance could be socially acceptable is problematic itself. Legally it is acceptable, but you are just being rather anti-social about it. Especially given the main mantra of conservatives is to reduce public spending, it reinforce the idea that there is no need to help others in society that weren't so lucky.

What is the problem with someone managing their finances so as to minimize their tax burden? Is it okay if a poor person does it?

[Terralthra]

To give the most basic response:

When I buy stuff online in the US, I actively seek to buy things from out of state, because that way I don't pay sales tax on it. Technically I'm supposed to pay the sales tax myself to the state it came from, but literally no one I know does this.

What's the problem? Those sales taxes pay for the roads that the trucks take to ship that item to me. If I'm making use of the roads, I should be paying the usage fee that keeps them maintained. Avoiding that tax is selfish.

[streetad]

The issue is muddied further as governments deliberately create tax-avoidance/tax-efficiency schemes to encourage certain kinds of behaviour such as saving enough money for retirement, investing in certain types of business or encouraging the wealthy to actually stay in the country where they will pay SOME tax.

The attempt to draw equivalence between these kind of schemes and actual tax evasion (which is what was happening at HSBC) is ridiculous and undermines the rule of law.

[Patroklos]

To give the most basic response:

When I buy stuff online in the US, I actively seek to buy things from out of state, because that way I don't pay sales tax on it. Technically I'm supposed to pay the sales tax myself to the state it came from, but literally no one I know does this.

What's the problem? Those sales taxes pay for the roads that the trucks take to ship that item to me. If I'm making use of the roads, I should be paying the usage fee that keeps them maintained. Avoiding that tax is selfish.

In your example, however, you are illegally avoiding taxes which is not the same as following the law to the letter to ensure you do not overpay. Because most people do overpay, not underpay. So who are the bad actors here, the people following the law or the people writing laws and enforcing processes that by design are so labyrinthine that they bilk citizens out of more than they owe as a matter of policy?

[Executor32]

To give the most basic response:

When I buy stuff online in the US, I actively seek to buy things from out of state, because that way I don't pay sales tax on it. Technically I'm supposed to pay the sales tax myself to the state it came from, but literally no one I know does this.

What's the problem? Those sales taxes pay for the roads that the trucks take to ship that item to me. If I'm making use of the roads, I should be paying the usage fee that keeps them maintained. Avoiding that tax is selfish.

Huh. In Illinois, it's pretty much the opposite—you're supposed to pay the sales tax to Illinois in the form of a 'use tax', but like you, I don't know anyone who actually does it.

[Metahive]

What's it filthy stinking rich people also being filthy stinking misers when it comes to taxes ? It's not like these people are stingy on principle or out of necessity, they do waste their money when it comes to overpriced luxuries and otherwise gratuitous bullshit, but paying their dues to the community they live in? God beware, every cent counts!

I wish wealth led to toothaches, the more money and possessions you hoard the more your teeth hurt.

[Ralin]

If everyone is well off and comfortable there really isn't any point to being rich, is there?

[Crown]

So who are the bad actors here, the people following the law or the people writing laws and enforcing processes that by design are so labyrinthine that they bilk citizens out of more than they owe as a matter of policy?

You're making the assumption that the people that are making the laws and the people taking advantage of the laws are not one and the same. In case you missed it Lord Fink is/was the Treasurer of the Conservative party who are currently in office in the UK. There is no separation here, the foxes are now living in the hen house.

[Raw Shark]

What's it filthy stinking rich people also being filthy stinking misers when it comes to taxes ? It's not like these people are stingy on principle or out of necessity, they do waste their money when it comes to overpriced luxuries and otherwise gratuitous bullshit, but paying their dues to the community they live in? God beware, every cent counts! [snip]

If you start off with the core principle, "I deserve to be filthy stinking rich, even if I was born that way," then it's a pretty short hop to, "People who don't have money haven't done anything to deserve it," and then, "Taxation is theft!" which has nothing to do with blowing wads of cash on yourself.

[Metahive]

If you start off with the core principle, "I deserve to be filthy stinking rich, even if I was born that way," then it's a pretty short hop to, "People who don't have money haven't done anything to deserve it," and then, "Taxation is theft!" which has nothing to do with blowing wads of cash on yourself.

Which is pretty odd, isn't it? Taxes put into the state pay for quite a lot of things that benefit the filthy stinking rich actually (like, uh, the police that protects their filthy, stinking wealth), but since it's not immediately obvious and personal gratification it doesn't register.

[Raw Shark]

If you start off with the core principle, "I deserve to be filthy stinking rich, even if I was born that way," then it's a pretty short hop to, "People who don't have money haven't done anything to deserve it," and then, "Taxation is theft!" which has nothing to do with blowing wads of cash on yourself.

Which is pretty odd, isn't it? Taxes put into the state pay for quite a lot of things that benefit the filthy stinking rich actually (like, uh, the police that protects their filthy, stinking wealth), but since it's not immediately obvious and personal gratification it doesn't register.

There is a large degree of short-sightedness involved.

[ray245]

What's it filthy stinking rich people also being filthy stinking misers when it comes to taxes ? It's not like these people are stingy on principle or out of necessity, they do waste their money when it comes to overpriced luxuries and otherwise gratuitous bullshit, but paying their dues to the community they live in? God beware, every cent counts!

I wish wealth led to toothaches, the more money and possessions you hoard the more your teeth hurt.

Owning an Yacht or some private island gives you some social capital among your peers and impress people aren't as wealthy as you. Paying taxes on the other hand doesn't improve your personal standing among your peers or your community.

There is a large degree of short-sightedness involved.

Then perhaps it is time for society as a whole to understand the point of taxation as a form of community building?

[Ralin]

If you start off with the core principle, "I deserve to be filthy stinking rich, even if I was born that way," then it's a pretty short hop to, "People who don't have money haven't done anything to deserve it," and then, "Taxation is theft!" which has nothing to do with blowing wads of cash on yourself.

Which is pretty odd, isn't it? Taxes put into the state pay for quite a lot of things that benefit the filthy stinking rich actually (like, uh, the police that protects their filthy, stinking wealth), but since it's not immediately obvious and personal gratification it doesn't register.

The police are more then capable of funding themselves with what gets collected already for local taxes and speeding tickets

[Metahive]

The police are more then capable of funding themselves with what gets collected already for local taxes and speeding tickets

Eh, see bolded part. Not really disagreeing with me, are you? You can nitpick long about how exactly certain services are financed, but that's not the point. The point is that the filthy stinking rich (or FSR from now on) have some sort of fundamental opposition to give back to the community that provides for them.

Besides the police the FSR benefit in other ways from state services that are financed by taxes. Take infrastructure (streets, water and energy*) or the whole legal system that ensures them being able to actually keep their wealth for example. Then there's also the fact that it's in the FSR's own best interest to not shit into the beds they are lying in. States where the gap between poor and rich excessively widens tend to become very unstable with violent uprisings soon to follow. I mean, look at all those aristocrats dangling from lampposts because they thought the starving masses should just go and eat cakes.

[Raw Shark]

There is a large degree of short-sightedness involved.

Then perhaps it is time for society as a whole to understand the point of taxation as a form of community building?

Society as a whole does understand that; this is why we have taxation, despite a vocal minority that thinks they should be exempt because special snowflake.

[Adam Reynolds]

Which is pretty odd, isn't it? Taxes put into the state pay for quite a lot of things that benefit the filthy stinking rich actually (like, uh, the police that protects their filthy, stinking wealth), but since it's not immediately obvious and personal gratification it doesn't register.

The problem is that the ways in which people receive direct benefit from the government generally are not easily seen. The taxes that they pay are inherently more obvious to them. It is thus easy for people to feel that they are losing out in some fashion. Regardless of the reality.