Friday, 30 November 2012

Cameron's Potemkin: austerity over equity

Some claim that hypothetical efforts to combat tax evasion and avoidance by individuals and corporations, reaping surplus profits and wealth during the 'age of austerity', are dubious and complex. (Many of them employ this tactic to straightforwardly excuse the ideological basis for the austerity itself).

Prime Minister David Cameron and Chancellor George Osborne are claiming to be supplying funding to tax collection efforts against avoidance, and to find it "morally repugnant", respectively.

The anti-evasion "efforts" of Cameron's government will apparently yield a paltry £7 billion a year by 2014; this is less than 8% of the estimated £95 billion a year expense of tax avoidance and evasion by high-earners and multinational firms.

A legitimate effort to tackle the systemic efforts of firms to avoid fair social contributions, unlike that of the Cameron government, has been undertaken by the Green Party MP for Brighton Pavilion, Caroline Lucas. In March 2011, she cited a "report by Tax Research UK," revealing "that around 500,000 companies ‘disappeared’ from the UK’s Register of Companies in the year to March 2010 – with billions being lost to the Exchequer as a result." Based upon this report Lucas proposed a private member's bill, the Tax and Financial Transparency Bill 2010-12, to comprehensively counteract it. The Tory majority Parliament, inflicting austerity onto society, voted against it.

It is estimated that the revenue lost to the treasury from corporate manipulation of this loophole is £16 billion a year; amounting to £80 billion over a 5 year period,  falling only £1 billion short of the £81 billion of cuts in George Osborne's brutal 2010 spending review (the remaining £1 billion could be found through renationalisation of Britain's railway system).

Cameron and the Conservative Party have an awkward balancing act. For populist political gain, they must appeal to the moral indignation instigated by the wealthy's tax avoidance through constructing a PR facade of doing so, while ensuring placation of the vested interests whose generous party donations are their lifeblood. The Tory parliamentary body shutting down any legitimate effort to do so makes clear their absolute facetiousness.

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