Last week, it emerged that comedian Jimmy Carr has been using a tax-avoidance scheme to pay only 1% income tax, effectively saving himself £1.6million every year. The scheme, which is completely legal, works by allowing investors to pay in their earnings, and then have them loaned back to them. As the loan could technically be recalled by the company, it does not qualify for income tax.
This is quite a complex issue, with Twitter naturally a hub of jokes, fury and denial. There were three main camps that people seemed to fall into;
- The scheme was legal, he did nothing wrong.
- This is disgraceful.
- It was wrong, but well done Jimmy for handling it so well.
I’d like to address each of these points which, in themselves, bring up a lot of other issues.
He did nothing wrong
Of course, the most obvious defence here is that the scheme used by Jimmy Carr, and over a thousand other taxpayers, effectively shielding £186million worth of tax from the government, was completely legal. The trick involves a loophole in British tax law. The key word there, in my opinion, is ‘loophole’. To those who say he did nothing wrong, I’d reply that if you have to examine a law very closely in order to find a way of getting away with doing whatever that law forbids, you’re unlikely to have a halo to hang on the hat stand when you get home tonight.
The other issue here is that we are all assuming that the law is synonymous with ‘right’. The law and morality are actually two separate areas that meet in the middle like a Venn diagram. If we all followed the letter of the law, but nothing else, society would be in a very bad state.
You’d do the same
This was part II of most of the Jimmy Carr defenders’ arguments. Another comedian tweeted a couple of days ago, ‘All those paying as much tax as you can…you’re an idiot’. It seems sensible, doesn’t it? If you can get around it, then why not? You’ve worked hard for that money, and none of us should ignore the fact that, no matter how much money you earn, seeing half of it disappear is going to be a bit of a shock. It is a survival trait to always want more, and part of this means that we look at what we have lost without considering what we gain. Therefore, even if you still have £1.6million left, you’re probably still going to be thinking ‘Oh my god, I’ve just lost £1.6million’.
It’s not about scale, either. Jimmy Carr is used to earning millions. If you earn £30,000 every year, and someone took £15,000 of that, you’d be horrified (the fact they take £6,000 of that seems bad enough). For someone else, living comfortably on £15,000, they could consider that greedy of you.
This is disgraceful
But actually, although I can understand the reasoning behind wanting to tax-dodge, I wouldn’t do the same myself. Paying tax is about more than the law, it’s about responsibility. Everyone in society owes their situation to the willingness of others to pay their way. Did you pay for your own schooling as a child? Did you pay for the healthcare that inoculated you against diseases that threatened your life? If you’ve ever been unemployed, it was someone else’s tax money who provided for you while you searched for a job. When you retire, the working generations will pay your pension, just as you paid the pensions of those who were retired when you were employed.
A counter argument to that from the perspective of a rich person would probably be ‘but I get the same level of service from my taxes as people who pay less, so why should I have to pay more for the same, just because I earn more?’ Taxes do many things; at a basic level they fund the entire country. They pay for a complex infrastructure that we all use as a foundation for our lives. If person A earns a lot more than person B, then they have benefitted more from that infrastructure than person B. Surely it is only right that they contribute more, considering they have made better use of it? I don’t begrudge people earning millions in the slightest (would like to be one of them, someday) but it’s like ordering a pizza between you and three other friends, and you eat half. You get more from the arrangement, ergo you should pay more.
It was wrong, but well done Jimmy for handling it so well
If you haven’t been following this story, you will probably have no idea what this subtitle means. Jimmy Carr hosts the comedy panel show 8 Out of 10 Cats, a show in which panellists answer questions about current events in the news based on opinion polls and statistics. The first round is called ‘What are you talking about?’ in which the teams must guess the top things people in the UK have been discussing each week. You can imagine what topic was going to come up very quickly.
8 Out of 10 Cats received its highest viewing figures for 2 years last night. Everyone was eager to see what Jimmy Carr would say, and how he would handle the situation. The fact he still hosted this week’s was quite a surprise. I imagined the show not being on, or a guest host stepping in, but Jimmy Carr stepped forward and asked the questions, knowing full well he was going to be the target.
I have a lot of respect for Jimmy Carr now, as throughout the show he was humble, laughed at many of the jokes made at his expense, and agreed with the more salient points on why what he had done was wrong. He didn’t spend the whole show begging for forgiveness, but when an explanation was deserved, he very levelly admitted ‘It was my own stupid fault’, at one point saying ‘This sympathy is appreciated, but I don’t deserve it’.
He could, like most politicians when they get caught out doing something (i.e. all the time) have maintained he did nothing wrong, hidden behind the law, or refused to allow the topic to be discussed. But Jimmy Carr took it on the chin; he has spent the last few years making cutting remarks and performing sketches ridiculing other prominent figures for their wrongdoings, and rather than try to hide, or claim he was different, he understood that he deserved it and that he had it coming, and allowed it to happen.
But sod off, David
Naturally, Prime Minister David Cameron waded in, branding Jimmy Carr’s tax-avoidance ‘morally wrong’. Which would be fair enough, were it not for a few things that give that comment the slightest hint of hypocrisy, including (deep breath):
- David Cameron’s own £300,000 inherited fortune is that size because his father sheltered it from tax by using offshore accounts
- He refused to comment on the tax-dodging policies of members of his own cabinet, saying he was ‘not about to get involved in their tax affairs’
- He has done little to force mobile telecoms provider Vodafone to repay the almost £6billion in tax that they have avoided paying
- He recently invited high-rate French taxpayers to move to England in order to avoid paying full tax
- He left his eight year old daughter alone in a pub for 15 minutes earlier this week
Jon Richardson, one of the team captains on 8 Out of 10 Cats, did offer a very good justification of Cameron’s involvement in the issue, which ran roughly as follows: ‘David Cameron got involved because every day he’s getting stick off the papers for cutting the budget meaning nurses and doctors are being laid off, and the reason he’s got to do that is because there isn’t enough money in the pot, and the reason there isn’t enough money in the pot is because some people aren’t paying all their taxes.’
It was one of those pathetic politician moves, desperately trying to gain favour by jumping into a big issue on the side of the public. Obviously he was hoping to gain some popularity by showing us that ‘actually, he’s a decent guy’. Once again, he left his own daughter alone in a pub. As has been already said, sod off David.
“But lowering the taxes the rich pay will encourage them to actually pay them, raising more money for the economy”
Yes, and making murder legal would save us loads of money in police investigations and the cost of keeping prisoners in jail. Do you know what else would raise more revenue? Paying everyone more, but strangely that doesn’t seem to meet with as much approval from rich company owners, the same owners who want to reduce their taxes because they are so desperate to contribute to the economy. There are so many ways of raising more revenue for the economy that would actually make the people at the bottom of the wealth ladder better off, but for some reason the people with the most think that they should be the ones ‘getting the break’. Awww, did you have to get rid of one of your helicopters recently? And to think, those people forced to work harder by their bosses for less money just won’t stop whining. Don’t they realise, you lost a helicopter?
It’s easy to be sorry if you get caught
Yes, Jimmy Carr was very apologetic and humble, but it’s very easy to be sorry if you get caught. “Look, I know I stabbed this goat in the face, but I’m really sorry. It was incredibly stupid of me”.
However, Jimmy Carr’s stage persona is that of a perverted, slightly creepy man. On last night’s edition of 8 Out of 10 Cats, I genuinely believed his humility. I imagine if your financial advisor does say to you “Do you want to pay less tax? It’s totally legal.” you could easily find yourself thinking, “Well, he said it’s legal…”
What he did not deserve
The Daily Mail
, a British ‘news’ paper, printed an opinion piece by Jimmy Carr’s father today, to whom Jimmy hasn’t spoke for several years. In it, Jim Carr laments his son’s abandonment of him, wondering what he ever did wrong. Perhaps he should start by looking at the column he has just written, in which he compares Jimmy’s tax dodging to Jimmy never repaying him the money Jim Carr spent clothing, feeding and sheltering him whilst, aged 30, he went touring around the country, trying to make it as a stand-up comic. Because all of our parents, upon us moving out, presented us with an invoice for 18/22/70 years of food, utilities, clothes, accessories, transportation, healthcare and time that it took to raise us.
Jim Carr claims to have no reason why Jimmy disowned him. His column is mostly ‘genuine’ love and support for his son, wishing for a reconciliation. But Jimmy’s unpaid ‘debt’ to his father is referenced several times, and considering Jim Carr is estranged from his other two sons as well, it’s hard to believe he has done nothing wrong. For a start, he was paid good money to write a column damning his own son, days after the scandal broke.
So what should happen now?
Some people are gleefully prophesising the end of Jimmy Carr’s career, but I don’t think it will come to that. His humility, and quick acknowledgement of his wrongdoing (responding to a heckler at his first gig after the story broke; ‘I’ve been a dick’), has won many people over, and the Twitter messages congratulating him for handling things so well are now outnumbering the negative and angry comments.
Did Jimmy Carr do something wrong? Yes he did.
Should his career end? No, as Jeremy Vine of Radio 2 said, ‘In a recession, we need comedians’.
Jimmy Carr’s tax affairs have brought the attention of a major problem further into the public domain. But before we decide his punishment, perhaps we should reflect on the MP expenses scandal of last year, in which it emerged that British members of parliament were using their expense accounts to pay for things such as second homes, wages of family members, and even for one Lord to have his moat cleaned. What was the net outcome of our outrage? The system has been reformed, and several MPs were forced to pay money back. We all seem to be more or less fine with that.
Perhaps the same is what is required in Jimmy Carr’s case.
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