John Mills, Tax and Dishonesty

June 7, 2013

On the issue of taxation abuse, we need to move on from the oversimplified distinction between legal avoidance and illegal evasion.

At the moment some avoidance has shocked people, while other avoidance, such as my tax free savings, is not such an abuse. In order to sort out the difference between good and bad avoidance, I suggest people concern themselves with whether the avoidance was dishonest or not.

In the case of George Osborne’s complaint about a Labour donation, we need to ask, was John Mills dishonest in his method of avoiding tax in this donation? If he was, then Labour is in trouble, if he wasn’t then we are not. Mr Mills chose not to sell the £1.5m of shares and give the cash to Labour, as that would have been taxed as a capital gain. By giving Labour the shares, then Labour will be taxed on the dividends, but only liable to the capital gains if they are sold.
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Ending Legal Aid will lower standards.

May 5, 2013

The government’s reputation for incompetence shows no signs of abating, as they mimic the management ethos of Mid Staffs hospital and apply it to the criminal defence service.

These are government proposals which are to be applied to solicitors’ firms providing advice in police stations and courts. They propose the removal of choice of solicitor from the service user, in order to create a greater economy of scale and drive down costs. But, by doing so they will remove the competition which drives up standards and establish a local monopoly, rarely the most effective model to promote efficiency.
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Getting tough on late payment to SMEs

April 12, 2013

There was an interesting article in last week’s Economist about a speech made by Chuka Umunna to the Federation of Small Businesses, which began with the sleepy audience unengaged, but went on to inspire them to shout, “Hear hear!” I suspect this was following the announcement that Labour would crack down on big companies that deliberately hold out payments to small companies for months on end.
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The Oligarchs of the Internet

December 19, 2012

Rather like in ancient Rome or the end of the Soviet Union, the sudden expansion of the internet has produced a small number of oligarchs controlling a huge amount of industry.
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Obama, Miliband, Tax and State

November 3, 2012

I’ve completely changed my mind, thanks to Peter Watt. I used to agree with Peter’s position, that taxation is a necessary evil, not a automatic right of the state. Then I read his piece, “It’s not our money stupid, it’s theirs”, and I’ve since reversed my position completely.

This is part of a wider debate about whether the state creates private business, that began with a gaff from Obama. “If you’ve got a business, you didn’t build that. Somebody else made that happen.”

It was a gaff, but the rest of the quote made sense of what he meant. “There was a great teacher somewhere in your life. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that”.

The debate re-emerged in this country during the party conference season. Miliband had described a Tory tax-cut with the visual image of David Cameron writing out £40k cheques to his mates. At the Tory conference Cameron responded, “When people earn money, it’s their money. Not the government’s money: their money. Then, the government takes some of it away in tax”.

Previously I was very much in agreement with David Cameron on this one, but reading Peter’s article got me thinking. If it were the case that the state acts as a hindrance to wealth creation, then why do millions of enterprising and ambitious young people, from the developing world, risk their lives to enter the western world every year? Surely if our top heavy state was standing in the way of business, why don’t they stay in their own country and make their fortune there? Read the rest of this entry »


Prosecuting Libor – Lessons from Hacking

July 8, 2012

“He’s wrong,” said Ed Balls, on the Andrew Marr Show, publicly contradicting the regulator, Adair Turner, who previously claimed that cheating the Libor market was not a criminal offence. It was a ridiculous example of how a regulator can’t see the woods for trees, and it was right of Ed Balls to bring clarity.

Adair Turner is an economist and an academic. He can’t be expected to know the law, and we’ve learnt in recent years that we need a tough lawyer to perform the role of regulator. It is therefore extraordinary that his replacement will be Mervyn King, another economist and academic, who also can’t be expected to know the law.
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