andrewducker: (Default)
andrewducker ([personal profile] andrewducker) wrote2011-11-22 11:00 am

Interesting Links for 22-11-2011

[identity profile] danieldwilliam.livejournal.com 2011-11-24 12:53 pm (UTC)(link)
I’m a ACMA and not in tax either but my tuppence worth.

I agree the sentiment that if the rules say you can do X and reduce your tax bill then you are morally entitled to do X. If the tax authorities want a different outcome then they should change the rules.

I think the tax system can get complex even without adding another factor.

You could go about making the tax system simpler and this might reduce the areas where the system can be gamed (or it might not). I think one consequence of this is that it might increase the unfairness of the tax system. Tax systems are complex because business and life are complex. When you try and overlay a simple system over a complex system you get areas where it fits badly. People will either feel the unfairness which given that you are taking money off them at gun point is probably less than ideal or they will change the way they operate. I don’t think tax systems should really affect the way people live and work at the gross level unless this is explicitly what you want the system to do.

When you try and adjust the simple system to iron out the unfairness you rapidly arrive at systems that are just as complex as the one you have just simplified used to be.

I suspect that HMRC and co assume a certain amount of gaming and set the base tax rates at a level to compensate. So the contest is not between tax payer and HMRC but between different tax payers to best manage their tax affairs so that they are paying less tax and their competitors are paying more.