In 1999 a man called Edward Troup described taxation as ‘legalised extortion’. (Guardian 11/04/16) In the light of the revelations of the Panama Papers, many might feel the term more aptly describes the ‘aggressive tax avoidance’ by presidents, princesses, drugs smugglers, arms dealers and others across the globe. Thanks to a lone-wolf whistleblower the full extent of ‘aggressive tax avoidance’ has been exposed. The very richest amongst us have hidden away many billions in order to avoid contributing a fair share to social spending in the economy.
‘Legalised extortion’ is a shockingly derogatory way to describe the system through which we are all supposed to contribute funds to finance the provision of collective goods. Collective goods include things like the police force, defense forces, security systems, roads and street lighting: things considered essential to a well-functioning economy.
It is hard to imagine that anti-government, anti-tax, and anti-fiscal-spending has gone so far that those expressing such extremist views against a proper and fair system of financing public expenditure are now running HMRC. To go further and place Edward Troup in charge of overseeing the inquiry into the Panama Papers scandal is like putting a fox in charge of a chicken coop. I fear for the health of the chickens!
Edward Troup built his career advising corporations on how to reduce their tax bills. The firm outlined to its clients the means by which vast sums of money could be stashed in linked, unnamed accounts across the globe. Either legally or illegally, according to the client’s preferences, tax bills on these vast, secretly held, sums of money could then be minimised, or even avoided altogether. (For example zero inheritance tax is paid on an estate owned by a company in an offshore account , because companies don’t die the way human beings do. This is a perfectly legal way to escape inheritance taxes. The Panama Papers have revealed that a vast amount of property in London has been purchased in the name of companies rather than individuals since 2010.)
Edward Troup was a partner in the law firm that advised Prime Minister David Cameron’s father, Ian Cameron. He left Simmons and Simmons to join the civil service in 2004. He is now the head of HMRC. He is on the verge of being appointed to oversee an inquiry into the Panama Papers.
The inquiry will have total control over the full extent of the information that has been leaked to the press in the Panama Papers. The Chilcot inquiry has still not been published more than six years after the inquiry began. This example demonstrates the way in which inquiries may be a mechanism by which truth is managed by the state, delayed and even concealed, rather than the means by which facts are exposed to independent scrutiny and acted on in the public interest in a timely fashion. This inquiry into the Panama Papers, in a similar way, may well be expected to choke off rather than speed up efforts to make the system more fair, effective, honest and transparent. With the fox in charge of the chicken coop what hope can there possibly be for the chickens?