Wednesday 11 August 2010

Two vigorous campaigns?

Regular readers, if there are any, will have noticed that there haven't been many posts recently. This is because I'm very much occupied in having holidays (walking in Wales, enjoying sunshine in Margate and walking in France) and, with another ex-teacher of economics, writing the answers to the questions in an economics text-book. Thus when not away on holiday my head is reeling with such concepts as profit maiximisation and matching Marginal Social Costs and Marginal Social Benefits.

However an item on the 6 o'clock news on Radio 4 yesterday compels me to abandon these frivolities for a while and come back to blogspot.

David Cameron has announced a vigorous campaign to reduce benefit fraud. He claims that this deprives the Treasury of over £5bn each year. However," experts" claim that most of this is the result of error and maladministration and only £1bn is due to actual fraud. Nevertheless, £1bn is a lot of money and we must applaud a campaign try to reduce if not eliminate it and bring the culprits to justice..

However, the same news item pointed out that the Treasury loses £15bn per year on tax evasion. Yes, tax evasion, not avoidance. The government actually encourages tax avoidance for what it sees as good causes such as personal savings by such schemes as ISAS and and charities through Gift Aid, and many of us take advantage of these. But tax avoidance, like benefit fraud, is illegal.

As a deficit minimising as opposed to profit maiximising government, economic logic dictates that the government should now put 15 times more effort into tracking down and reducing if not eliminating this tax evasion and bringing to the culprits to justice (which, in my view, should involve community service rather than a seat in the House of Lords.)

I look forward to it.

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