The big news from the UK is that the Electoral Commission has cleared Lord Ashcroft of making illegal foreign donations. Ashcroft had given £5.1m to the Tories through a company - Bearwood Corporate Services - which seemed to have no actual business in the UK. But the Electoral Commission has found that being registered in the UK is enough, and so the donations were legal. So we can expect a flood of non-trading shell companies established solely to allow foreigners to launder their otherwise illegal donations and influence the UK political system any day now.
But as swiftly as one scandal is dealt with, Ashcroft is involved in another. This time its VAT avoidance. In 2005, Ashcroft commissioned £250,000 in polling in Conservative marginal seats, and had the invoices sent to a company of his in Belize solely to avoid VAT. Cost to the taxpayer: £40,000 (in New Zealand terms, about 6 hip-replacements).
In the Independent, Johann Hari calls this what it is:
Before we figure out how this happened, we need to deal with the excuses offered by tax exiles. They often say they earned this money all by themselves, so why should they hand it over to the rest of us? But none of these men could have made a penny if they didn't live in a sophisticated state where they were given education, healthcare and a transport system, and kept safe from crime and fire and foreign attack. All of these services are paid for collectively, through the tax system. Tax exiles want all the benefits of an advanced society, without paying for it to keep going. There's a technical definition for this in the natural sciences: a parasite.The same applies to our rich. Bill English is trying to justify his planned tax cuts to the rich by arguing that only half of the top income earners pay the top tax rate. We should call these people what they are: parasites. And rather than rewarding them, we should make sure that IRD is properly resourced to bust their tax-dodging scams, and ensure they pay their full share.
