I felt my left wing credentials being called in to check (by only myself, I might add, but silence can speak louder than words or JSON) today when I brought up my twitter time-line and was presented with this lovely succinct image.
Left Wing Twitteratti caption: "This is the problem with catching tax avoiding companies". |
We are taught that as a business increases its profits, the tax it pays should increase proportionally to its income. Small businesses pay small tax, big businesses pay big tax, and HUGE companies pay small tax. Wait, hang on. So, the £70bn+ tax that has been evaded must surely come from HUGE companies? How many of them can there be?
There's Vodaphone, I've heard Laurie Penny talk about them (sometimes about tax, other times about her phone bill). There's Google, I use them. Oh, Starbucks! That's another. Jazzy's newsagent on Netherhill Road? Probably doesn't produce big enough profits, or despite being the classic Left enemy of a capitalist (well, why else would sell things for money?) a tax avoider.
So, we can assume for ourselves that the number of HUGE businesses avoiding tax to the level of £70bn is perhaps in the upper tens, if breeching the 100 mark at all.
Let's move on to benefit fraud, despite it's rather vague description. Is this all fraud from the DWP? or just Housing benefit fraud but no Child benefit fraud? Let's assume that it is over the same time period as the business figures, less we throw another parameter in to this graph (I'll get to that in a moment). In the UK for May 2014 there were 5.2 million claiming benefits. Most of these (99.3%) are claimed correctly and without fraud. Leaving 0.7% of 5.2M people apparently committing benefit fraud, that's 36,400 people. A tiny bit more than our estimate for the companies.
Right, so back to the graph. 300 people investigating around 100 companies gives no more than 3 people to a company, and 3250 investigating 36,400 people giving each investigator around 10 people to look at. However, and here's a difference: A company consists of many people, say one CEO and a board of directors. This would have the effect of, in some cases, rounding out the numbers such that both workforces were perfectly adequate for the task ahead.
A two dimensional graph, like the one above which shows two axis (amount of money and number of workers) represents a linear equation. To be an accurate graph, there should be changing variable except what the axis represent. In theory, this graph should actually be a 3 axis surface plot of money, workers and number of people under investigation. Until then, it's just a pointless exercise in the whole "those who shout loudest are the truth of the internet".
The best way to fix tax avoidance? Don't use Vodaphone. Don't buy coffee at Starbucks. Don't use Goog... in fact, I quite like my chromebook, android phone and android watch. Does this make me less of a left-winger?
No, I still vote for the party that I think will bring the better society rather than the ones that will dismantle it.
I hate these kinds of infographic too - they oversimplify something to the point of meaninglessness and they also mean a lot of people cannot produce sufficiently robust arguments. Which really annoys me. Real life and real politics is a wee bit more nuanced and more interesting as this blog post shows :)
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