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Tax cheats have nowhere to hide. Whoever you are – an investment banker looking for a discreet home for the annual bonus, or a plumber paid in cash after doing a job for a friend – the taxman is on your case. The bloodhounds have been unleashed in almost every tax jurisdiction in Europe and North America where governments are scrambling to plug gaping holes in national budgets. Desperate times require stringent measures, we are told, as politicians on the left and right wag their fingers at those who would avoid payment.

But there is more to this than political convenience. A fundamental shift in opinion lies behind the new fiscal rectitude. Tax is no longer to be seen as something we tolerate, a necessary but reluctant burden. The pursuit of tax revenue is being hailed as a moral crusade by the state and those who seek to challenge a tax bill or pursue legal avenues to avoid it, are cast into darkness as sinners.

Last week the worshippers of Mammon at Goldman Sachs were hung out to dry in Westminster, accused of attempting an "opportunistic money grab" and of failing in their "civic duty." Goldman's alleged sin was their intention to delay the payment of the annual bonus to London staff to the next tax year, in order to take advantage of the government's decision to reduce the top income tax rate from 50 per cent to 45 per cent.

The bankers quickly abandoned the scheme and a host of other big firms have also scrapped similar plans in order to avoid being put in the stocks and pelted with mud. Not only the firms themselves but thousands of accountants and tax lawyers will be blindsided by the new law of fiscal public relations. Only five years ago, such a simple and legal avoidance plan would have attracted no comment; after all, it is the government's intention to reduce the tax rate, is it not?

Few give a fig about Goldman bankers being hit in their wallets, but the net is widening. Today it was revealed that the Crown Prosecution Service plans to sharply increase the number of tax cases it pursues in a direct attack on the professional and skilled labouring classes. Both lawyers and plumbers are in its sights as it increases the number of tax cases it handles fivefold over the next two years.

The obvious intention is to scare the pants off anyone tempted to omit disclosing a bank account or to hide a large wad of cash in the sock drawer. And you could say that the threat was justified, given the appalling state of the government accounts. But there is something more worrying about this recent rise in bullying behaviour by governments over tax. It suggests that our legislators want us to believe that the state has a moral right over our earnings.

The message was made clear to Starbucks, Google and Amazon when the three U.S. multinationals were hauled over the coals by a parliamentary committee in Westminster for their tax avoidance strategies. So aggressive was the inquisition that Starbucks agreed to pay more tax in future, regardless of whether it was legally owed.

This is worrying because whatever we feel about Starbucks and its tax accounting, most of us still fundamentally believe that what we earn is our money and that we agree to give the state its share according to law, not public opinion.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 9:38am EDT.

SymbolName% changeLast
AMZN-Q
Amazon.com Inc
+0.01%179.84
GOOG-Q
Alphabet Cl C
+0.36%152.49
GS-N
Goldman Sachs Group
+0.61%417.79
SBUX-Q
Starbucks Corp
+0.75%92.19

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