Friday, June 22, 2012

The 'rich' do not bear their fair share of taxes; nor do many major corporations

A recent hot issue in the UK is that of tax avoidance (which legally is different from tax evasion, apparently) practised by practically anyone with a reasonable income - - an article in London Times lists " From dentists to doctors and financiers to footballers, through lawyers, dressmakers and an award-winning baker: investors in tax-efficient schemes read like an A to Z of working Britain."

The reason most of these tax avoidance schemes work is because of complex tax legislation that from time to time favours investments in one activity or another.  Over the years these range from encouraging investments in forests (green!) to films and music (culture and arts?) and so forth.

In Hong Kong, individuals pay a standard rate with a basic allowance.  There are no special allowances. This means a reduction in the need for tax inspectors, tax accountants and the rich pay their fair share. Why can't the UK and others follow this excellent example?

A simple search on the Times website for tax avoidance found five pages of hits - l - and the news items cover not only the UK but other countries and continents.

Furthermore, not only individuals are avoiding taxes, but giant companies including hi-tech ones like Microsoft, Apple, Google, Facebook, rich as they are are reducing tax liabilities by forming companies in low tax regimes and pretending all their trading is done in those countries!  According to Forbes - - "Apple, Amazon, Google, eBay and Facebook All Accused of UK Tax Dodging"

No wonder the world's economy is in a mess.

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