Friday, May 29, 2009

What really gets me...

What really gets me...

The expenses scandal has been driven by two conflicting stories – the amusing and the serious.  Moats, duck houses and helipads are all intensely funny (as well as being infuriating of course).  But I am, candidly, surprised that people are surprised that MPs have been using their Parliamentary allowances to the fullest extent allowed.  And really, once you accept that, for example, a Sky Sports package is an allowable expense what is the qualitative difference between that and a flat screen TV?  If gardeners are allowed, what does it matter whether they are mowing the lawn or clearing the moat?

Rather more serious are those where the spirit of law seems clearly to have been broken, through the constant flipping of primary and secondary residence designation and the associated avoidance of CGT paid as a result.

But the one that really gets me going is the ways in which MPs (and most especially ministers) have been going round the houses to find ways to avoid paying the taxes they foist on the rest of us.  Bad as it was that Jack Straw had been claiming the full Council Tax levy on expenses, while only paying the reduced rate, what really got to me was that paying Council Tax was an allowable expense at all.  Is this why the Labour Government have been so insouciant about spiralling Council Tax rates?  Because they’ll just claim it all back anyway?

When you throw in the specialist tax accountancy advice that ministers (including, for God’s sake, the Chancellor) have been claiming on their tax-free expenses, which is specifically unlawful under British tax law for everybody else, the impression grows that MPs really do believe that the law is for the little people.

And the apparent inability of the Chancellor to apply the laws he makes to his own personal finances throws a harsher light on the quality and quantity of financial legislation that has been pouring out of Westminster for the last decade.  As Rupert Darwall in the Wall Street Journal puts it:

Britain would have a far better tax code and lower tax rates if those who make the tax laws reflected a little on their own behavior and what it says about people's ability to arrange their affairs to avoid excessive taxation. As chancellor, Gordon Brown wrote more legislation designed to fight tax avoidance than any of his predecessors. The result is that the U.K.'s tax code is impossibly complex. The 2004 Finance Act ran to 746 pages, and the 2005 Finance Act was so long it had to be published in two books. The publication of the lawmakers' expense claims revealed the delicious irony of Mr. Brown making arrangements to pay his cleaner in a way that reduced her National Insurance taxes.

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