Jozef Imrich, name worthy of Kafka, has his finger on the pulse of any irony of interest and shares his findings to keep you in-the-know with the savviest trend setters and infomaniacs.
''I want to stay as close to the edge as I can without going over. Out on the edge you see all kinds of things you can't see from the center.''
-Kurt Vonnegut
Being Commissioner of Taxation means you are never far from controversy. Chris Jordan is the 12th man to hold that role and was appointed in 2013 after previously being chairman of partners for NSW at KPMG.
Jordan, whose term ends in 2024, is among a handful of tax office top brass being sued by the Australian Services Union, accused of making up a new category of remote working – “working from home” – so he and his top executives could bypass pre-existing working-from-home rules for staff. The case, which alleges breaches of workplace laws, is before the Federal Court. Speaking of working from home, there's happier news for Jordan on the personal front. Since late last year he has been in a relationship with Janine Perrett, the senior business journalist and former presenter on Sky News. Perrett and Jordan have long known each other, but the personal relationship is a recent development.
The professional one goes considerably further back. In 2016, Perrett filed a column for the Switzer Daily website in which she reported on Jordan's ‘‘commanding'' performance before a Senate estimates committee. ‘‘The only one in Canberra who seems to have his finger on the pulse of the electorate at the moment, finally, is the ATO chief,'' she wrote.
Perrett even commenced her column with the words ‘‘Oooh, I do so love a tough talking Tax Commissioner.'' Prophetic words, as it turned out.DOING THE NUMBERS Sydney Morning Herald
Former Sydney tax accountant Vanda Gould has been slapped with extra jail time after losing his appeal to overturn a conviction for attempting to pervert the course of justice.
The Court of Criminal Appeal rejected the 73-year-old's appeal.
Gould, who has had many legal battles in various courts with the ATO, is also suing tax commissioner Chris Jordan for defamation over comments made at the National Press Club back in 2017, which he claims alleged he had engaged in money laundering, insider trading and tax fraud.
Three books address the ethical, historical and economic aspects of taxation
Once again, it comes down to tax. From Sumerian clay tablets dating from 2,500BC recording tax payments to the Rosseta Stone, describing a tax break for priests (so important it had to be recorded in three scripts), taxation forms one of the enduring and defining forces of the history of civilisation. In the present day, tax has emerged as a defining theme of Joe Biden’s administration.
The new US president has vowed not to touch the payments of the middle classes, but he is targeting the rich and highly profitable companies to raise the funds for his infrastructure programme and to make America’s threadbare welfare state appear a little more European. Politically, this will be quite a fight in a delicately balanced Congress. House Republicans say Biden’s new taxes will “destroy jobs, drive down wages [and] drive up the cost of living”.
The need to raise revenue is not just a domestic US concern. The digitisation of economies and footloose profits have seen tech giants pay little tax, prompting governments to impose new levies on them, leading to trade tensions and threats of tariffs. If negotiations in Paris do not succeed in finding a new way of taxing multinationals after a century of no change, damaging trade wars are a distinct possibility.
Rarely has tax been so close to the centre of domestic and geopolitics, but this should not come as a surprise. Citizens now demand that governments ensure they can live their lives with more resilience against pandemics, global warming and ageing populations. The 2020s will be the decade when the maxim from Alexis de Tocqueville, writing 165 years ago in L’Ancien Régime et la Révolution, rings true: “There is scarcely any public matter that does not arise from or end in tax.”
When the population rises up against what they see as unfair impositions of tax laws, regimes and governments crumble The intense political difficulty of taxation is highlighted in another of the French political theorist’s insights: “A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.”
Most citizens accept that the state needs revenues to finance public goods such as defence and policing, and essential services including health, education and social security. As US Supreme Court Justice Oliver Wendell Holmes noted in 1927: “Taxes are what we pay for civilised society.” Yet, voters tend to prefer taxes that other people pay. To ensure that they collect sufficient funds, governments have historically imposed draconian penalties for those caught fiddling the system.
It is the combination of a demand for money backed by menaces that led Edward Troup, the former head of the UK’s tax authority, perhaps unwisely, to write that taxation is “legalised extortion” before he entered public service. When the population rises up against what they see as unfair impositions of tax laws — whether it was George III’s rule over the American colonies, Louis XVI in France or Margaret Thatcher’s poll tax — regimes and governments crumble. Tax, therefore, should not be left to accountants or the money pages of newspapers. It is far more important than that.
A branch of economics has long understood this truth. But economists, with their equations and dismal communication skills, have failed to shape day-to-day tax debates, leaving a void of informed commentary. Three new books are seeking to fill this hole, putting the question of taxation in ethical and historical contexts.
The most passionate and easiest to read is Tax the Rich!, written by Morris Pearl and Erica Payne. With the subtitle, “how lies, loopholes, and lobbyists make the rich even richer”, readers might expect a revolutionary manual for those wanting to get their hands on the money of those with megabucks.
It is nothing of the sort. Written on behalf of a group called the Patriotic Millionaires, it is a blunt description by the rich, trying to persuade their fellow plutocrats to be taxed more. This is not an altruistic venture by Pearl, who made his money on Wall Street, and Payne, president of the Patriotic Millionaires. The book is rooted in the fear that if America continues to avoid the question of taxing rich people more, they will suffer. “I don’t want to ride around town in a bulletproof car with a trained security guard.
I don’t want to worry that my children or grandchildren are going to get kidnapped, or worse,” Pearl writes in defence of being called a “traitor to my class”. The book’s best elements stem from the righteous anger at the way political funding, lobbying and shamelessness, has led to massive opportunities for legal tax avoidance, ensuring that the US tax code, in effect, has one rule for the rich and another for most citizens.
As such, Pearl and Payne will be delighted with the ambition of the Biden administration, which has proposed to close many of the loopholes they criticise, including the ability of people in finance to dress up salary as capital gains and the creation of a minimum corporate income tax rate on global profits, eliminating the ability of US companies to shift profits to tax havens. Tax the Rich!, is ultimately undermined by lacking a conceptual framework on which to ground its criticisms of America’s tax system and suggest improvements.
A more egregious failure is one known to trouble economists and philosophers. At no stage does the book consider whether multimillionaires deserve their riches. It merely seeks to tax away some of the gains. This shows a naive faith in government that the authors think it can tax the rich effectively, when many of them achieved their wealth through the same lobbying of politicians, the exploitation of uncompetitive markets and even crony capitalism. It is impossible to levy the same criticism at Michael Keen and Joel Slemrod’s Rebellion, Rascals, and Revenue, which builds its argument and chapter structure in the mould of a public economics lecture series, but disguises the insights and theory brilliantly with copious reference to historical events. The unintended consequences of taxation are brought to life with the story of the British colonial rulers in Sierra Leone, who introduced a hut tax in 1898 only to spark a rebellion.
To repress the dissent, British soldiers torched huts, destroying the base on which they wanted to collect revenues. Titles reviewed Many essential lessons stem from Britain’s infamous window tax, imposed between 1696 and 1851. It replaced a much despised hearth tax, which required inspectors to snoop inside people’s houses, while windows could be easily verified from walking down the street, and was linked reasonably to the ability to pay, since those who could afford large houses paid the most. Of course, it was not that simple, because taxes need to be defined in law and households responded to the incentives provided by the tax. Some canny people built properties with one window being used to light two adjacent rooms.
More obvious avoidance came in bricking up superfluous openings, leading to dark houses, stunted growth and that most modern of criticisms, renaming the tax to make it sound bad. Instead of a window tax the medical press dubbed it a “tax on health”. This is a modern reference book that offers a historical precedent for almost any tax debate or controversy imaginable. Donald Trump, who imposed trade tariffs insisting Chinese companies would pay, would have benefited from reading the chapter on tax incidence — which discusses who actually bears the burden of any tax rather than who pays the cheque to the authorities — before he was so quick to start trade wars using tariffs on imports as his weapon.
Keen and Slemrod have amassed the most remarkable collection of evidence to bolster and illuminate their case — including the unforgiving approach of Prince Vlad of Wallachia, nicknamed “the impaler” for the way he dealt with tax-shy merchants. But they are realistic enough to disagree with de Tocqueville and understand that tax revolts are rarely just about tax. “Tax measures are more often a tipping point,” they write, “sparking conflict whose deeper source lies in more fundamental disputes over the ways in which a wider range of sovereign powers are allocated or being exercised.” In particular, they highlight that history’s best known tax revolt, when rebels dumped tea into Boston Harbour, prompting the American Revolution, is misremembered.
It was not sparked by tax increases imposed by the distant power of Britain, but was instead a violent protest by vested interests against a tax cut that threatened their existing business. Well before the British government faced revolting Americans, it had its own challenge, again with many contemporary parallels in organising its tax system fairly after the 1707 Union between England and Scotland. In The Dreadful Monster and its Poor Relations, Julian Hoppit chronicles the troubled history of taxation and public spending in the UK over three centuries.
With a meticulous fiscal narrative of the union with Scotland, the 19th century equivalent with Ireland, and devolution of taxes more recently, Hoppit seeks to dismiss two myths that survive today, still scarring a supposedly United Kingdom. Through the history of the unions, part of the nation sees London as the “dreadful monster” imposing taxes and sucking resources from distant nations and regions. Meanwhile, those in the capital see the business done there as the golden goose that benefits the whole nation with the farther flung “poor relations” draining its wealth.
The truth, Hoppit argues, is far more complicated and through a detailed collection of statistics he demonstrates how taxes paid by Scots did rise sharply after the Act of Union, and faster than those in England, but equally, the level of taxes paid by Scottish people remained lower than those south of the border. Grievances arising from confusions between levels and rates of change are just as powerful today as they were in the 18th century. The Irish Union of the 19th century, punctuated by the great famine, was an even more troubled fiscal affair with separatism ultimately fuelled by the language of overtaxation and inequity.
Hoppit effectively shows how difficult Irish independence was both for the finances of the Republic until accession to the European Economic Community in 1973 and for the UK, which has ever since sent significant sums to Northern Ireland — currently £5,000 net per head — to make its community more viable. Everything in this history suggests that fiscal aspects of independence for Scotland would be anything but smooth and rational.
These three books show the importance of taxation to history and contemporary politics, providing an invaluable primer to some of the underlying tensions behind contemporary political debate. While tax isn’t everything, it is a vital component of a modern nation state. There is no avoiding this fact.
Tax the Rich! How Lies, Loopholes, and Lobbyists Make the Rich Even Richer by Morris Pearl, Erica Payne and The Patriotic Millionaires, New Press $17.99/£12.99, 272 pages
Rebellion, Rascals, and Revenue: Tax Follies and Wisdom through the Ages!by Michael Keen and Joel Slemrod, Princeton $29.95/£25, 536 pages
