A slight spat has broken out between the TaxPayers' Alliance and LabourList's Derek Draper over the Guardian's tax gap series. It seems that yesterday Draper asked the alliance, scourge of government waste, what it thought of the practice of tax avoidance and concluded that the campaigners against government waste were all for it.
The alliance stops short of accepting this but, in a blog from member Mark Wallace, it argues:
Corporate tax avoidance is a rational response to an overly complex and burdensome tax code. With Britain having fallen behind other OECD countries, and now imposing a higher than average corporate tax rate, companies face a significant incentive to avoid that burden if they can within the law.
All of which raises an interesting question: how far can we expect companies who avoid tax to stop doing so either by persuasion or by changing the tax code?
Frustratedidealist posts on the "tax havens on our doorstep" blog the invitiation to me to explain "how he's going to change human behaviour".
One development in tax avoidance could change behaviour: transparency. Even directors of transnational corporations might look differently at a tax avoidance scheme if they knew it would be laid open to public scrutiny.
• This article was amended on Thursday 5 February 2009. Derek Draper is associated with LabourList, not Labourist, as we first suggested in this article. This has been corrected.
