Thursday, March 02, 2017

Would this work here?

UK Labour plans to force the rich to make their taxes public:

A Labour government would force all taxpayers who earn at least £1m a year to make their tax records public, shadow chancellor John McDonnell has said.

As Philip Hammond prepares to deliver his first full budget next week, McDonnell told the Guardian he hoped more transparency about individuals’ tax affairs would cut down on tax avoidance and encourage a more open civic culture.

He said that Labour had been inspired by the practice in some Nordic countries, including Norway and Sweden, where the publication of tax records is common.

“There is a big issue now about, people don’t have trust in the establishment – they don’t think they’re listening to them, don’t think they’re paying their way or being fair. So one way of re-establishing some element of openness and transparency would be, why not – over a million, you publish your tax return. Why not?”

Its clearly an anti-avoidance measure, but it only captures certain types of tax-dodging: people who do it on their own books. Whereas in New Zealand the problem seems to be the wealthy using trusts and other corporate vehicles to effectively hide their incomes and evade the top tax rate. So, while its a useful transparency measure, we'd need to combine it with others to effectively detect upper-class tax fraud.