Will Roney

The One-Percenters – are we going after the wrong target?

In Non-Fiction Writing on January 30, 2012 at 11:20

There is a backlash going on right now against the 1%-ers. Protesters say that they don’t pay enough taxation compared to the rest of the population, but is their target of the Occupy protestors the wrong target? It is fresh to see that people are prepared to stand up and say what they believe in, but if you think that Big Business should pay more tax, is this the right way to go about it?

The one-percenters are arbitrarily defined as those that pay the top one percent of tax. This includes many of the world’s top corporations and businesses. The contention is that these companies do not pay their fair share of tax as a result of their activities. The sting in the tail is that on top of this, the Occupy protestors believe that not only do they not pay their fair share of tax, but pay outrageous bonuses that offends the other 99 percent – often those for whom a bonus is a distant dream.

As with any system of taxation there are those that seek to evade and those that seek to avoid. Evasion is an illegal act and is punishable by many different laws. Avoidance is a perfectly legal act, and is something that business financial advisors exploit to the maximum. After all, surely no-one voluntarily pays more tax than is necessary?

The question boils down to how taxation is collected. I am no expert, but taxation is derived from revenue earned during the year. This revenue is collected as a basis on trade in a home nation (in my case, the UK) and in the case of multinationals, the proportion that is raised in the home nation.

Ultimately what companies do (by and large) is governed by taxation law. They will modify their businesses to exploit loopholes and areas of low taxation to maximise profits for the business and their shareholders. The only time that this approach will change is when the rules themselves change.

If the rules change, then the financial advisers will see how these modifications affect the overall taxation picture and they will change their advice accordingly. Government is about providing a framework for all of us to exist, and in the case of taxation, providing a financial cage in which to trap as much taxation as possible. If the cage has holes don’t ask the caged animal to sit there and stay put. If you need to patch a hole, then Government is your answer.

It is a positive move that the actions of a few are being highlighted by the many. If you believe that the 1% are taking too much from the financial system compared to what they put in, then this argument must be backed up with numbers. There has been little debate about how much revenue is raised proportionately by the highest earners, compared to the lowest. It would be interesting to see an argument from the Occupy protesters that concentrated solely on the facts, but this has yet to be proven.

Until that happens, if you were part of Big Business would you voluntarily pay more tax if the law didn’t require it? Or do the taxation laws need to change instead?

Discuss.

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