On BBC Question Time this week, the room erupted in applause as an audience member offered his simple solution to austerity. It was during a fierce debate on tax dodging – following from the ‘Panama Papers‘ revelations – that the man in the red jumper exposed the economic approach.
The timely comment came just after another audience member summarised the government’s narrative on austerity:
The man in the red jumper went on to say:
There’s £36 billion of austerity measures, there’s over £30 billion of unpaid tax. It don’t take a genius to realise, if you close the tax loopholes, get that £30 billion in tax, we don’t need need to take austerity measures.
He is referring to the tax gap as set by HMRC itself – £34 billion. This figure includes both tax dodging and errors. However, tax expert Richard Murphy estimates that tax dodging alone might cost Britain more than £100bn a year. Murphy offers a series of reasons for the gulf between his research and HMRC’s. He slams the government’s methodology, especially on estimating tax evasion:
It is simply absurd to estimate losses to tax evasion on the basis of the tax returns that are submitted to HMRC when, very obviously, the failure to submit a tax return at all is the main way in which a tax evader seeks to achieve their goal of non-declaration of tax owing.
Read on...Support us and go ad-free
This seems to be so glaringly obvious it should not need pointing out, and yet it has to be, because as a matter of fact HMRC do not look at data outside the tax system to estimate most of the tax evasion gap. It is, inevitably, and seriously, understated as a result due to the most basic of methodological errors on its part that fundamentally undermines the credibility of the data it has to offer.
Considering tax evasion usually happens outside the tax system, HMRC’s data is very dubious. Murphy estimates that tax evasion costs us over £88bn per year, while tax avoidance costs us around £20bn. Leading to a £100bn total.
What we lose to tax dodging each year could pay for either:
- 475,000 nurses for a decade every year (an annual starting wage of £21,388)
- 27,000 primary schools every year (an average cost of £3,700,000 each)
- 666,666 affordable homes every year (an average cost of £150,000 each)
- 183 state-of-the-art hospitals every year (based on the £545,000,000 cost of the new Queen Elizabeth Hospital in Birmingham)
As the audience member says, the untold fortune lost every year makes austerity redundant.
Bloke in audience says, 'If the rich paid their tax, we wouldn't need to have austerity'. #bbcqt
— Michael Rosen (@MichaelRosenYes) April 14, 2016
Hats off to this man for exposing the toxic economic orthodoxy, in the most ‘common sense’ way possible.
– Learn more about tax at the accessible Tax Research UK.
– Write to your MP to express any concerns about tax dodging.
–Support The Canary so we can continue to tell it like it is.
Featured image via Youtube screenshot.
We need your help to keep speaking the truth
Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.
Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.
We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.
In return, you get:
* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop
Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.
With your help we can continue:
* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do
We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?