UK Conservative's Tax Dodge Advice Video is Just the Tip of the Iceberg

What do we make of political leaders in already deeply unequal countries explicitly giving out advice to the wealthy on how to game the tax system?
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Ben Cohen
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What do we make of political leaders in already deeply unequal countries explicitly giving out advice to the wealthy on how to game the tax system?
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Practically speaking, if you have had some success in life it is unlikely that you'd willingly deny your children money in favor of handing it over to the government. Funding public schools and roads is all well and good, but your hard earned cash could buy your children a house, give them a great education or help them with their own debts.

Trying to avoid paying more tax isn't a particularly bad thing, just an intrinsic part of our nature that fluctuates between selfish and altruistic behavior. It is hard to conceptualize how your tax contributions work in your favor over time (better schools, better health care etc), so our governments have to strictly enforce tax codes to stop people gaming the system. Of course this can go too far in either direction and result in catastrophic consequences (think Somalia or the Soviet Union), so getting the balance is absolutely crucial.

So what do we make of political leaders in already deeply unequal countries explicitly giving out advice to the wealthy on how to game the tax system?

The Huff Post UK reported that conservative Chancellor of the Exchequer George Osborne did just on BBC's Daily Politics back in 2003 (while his party was out of power). He said:

The one piece of advice I would give to Bill [a viewer] is that there are some pretty clever financial products that enable you in effect to pass on your home, or the value of your home, to your son or daughter and then get personal care paid for by the state

I probably shouldn’t be advocating this on television.

Given the conservatives are in the middle of an election, this revelation is particularly damaging. The Tories already have a reputation for cronyism and have a disastrous record on wealth inequality, and can ill afford to be painted further as the party of the rich. But this comment reveals a greater truth about the people running the British government, and what their views about society are.

The conservative party in Britain had presided over a radical transformation of the British economy over the past five years, slashing back the state and ushering in era of mass privatization. Ostensibly, this was about rebalancing Britain's finances and reducing the debt, but conveniently for the rich, they barely felt the impact of it at all. Instead, children were punished through massive cuts to education and welfare and the brunt of suffering fell on the poorest Brits. The economy barely recovered in the years after the financial crash - no surprise to those who understand that it is impossible to cut your way out of a recession. But the Conservatives pressed on regardless, ripping away at the functions of the state and leaving a new infrastructure built on socialized risk and privatized profit.

As Polly Toynbee and David Walker in the Guardian argue:

Despite failing to win the election, the Tories proceeded to savage welfare, destabilise the NHS, decouple schools from collective control and replace public service provision with markets and contracts. These developments were foreseeable, but even Cameron’s fiercest critics might not have expected that during its five years in office, the government would go on to jeopardise the unity of the UK itself and threaten Britain’s standing in the world.

George Osborne was at the helm of all of this, arguing that cutting and privatizing was the only solution to Britain's problems. Of course it wasn't, but the belief in deregulated markets and self interest trumps all - even reality. So when Osborne went on the BBC and gave a listener advice on how to avoid paying tax and reap the benefits of everyone else's contributions, he was revealing his vision for British society. Having won the election in 2010, got to enact his vision and create a country where the rich avoid paying tax and corporations benefit from the infrastructure originally paid for by the state.

The conservatives are asking the British public for another term in government. If they have any sense, they'll realize the conservatives were never an actual government in the first place - just a thinly disguised PR wing of the financial industry, and send them packing.

UPDATE: If you want to understand how toxic the Tory economic policies are and the extraordinary risk they pose to the future health of the UK economy, check out this fantastic little clip from economist Ross Ashcroft: