Monday, 18 November 2013

George Osborne: Liar or tax-dodger

Regular readers will know that I am not a fan of Tory Chancellor of the Exchequer George Osborne. 

I believe that Osborne is an economic extremist, and that his ideological austerity experiment has seriously damaged the UK economy. 

I am not alone in believing that Osborne is an economic illiterate following a defunct and economically destructive set of economic theories that he doesn't even understand. Even his own Office For Budget Responsibility Recklessness now admit that Osborne's austerity experiment is entirely responsible for the appalling stagnation of the UK economy.

Not only is George Osborne an economic illiterate pursuing an extremely destructive ideological agenda, he is also dishonest. One example of his dishonesty can be seen in the difference between his public pronouncements on tax-dodging, and his actions.

Osborne has repeatedly claimed that he is tough on tax-dodging (tax evasion and aggressive tax avoidance), activities he has described as "morally repugnant", however his actual policies belie a completely different agenda. In January 2013 he opened up a new set of tax loopholes to allow UK based companies to avoid paying their taxes in 3rd World countries by siphoning their profits into tax havens. Also let's not forget that the Tory party is bankrolled by donations from numerous tax-dodgers.

When it comes to George Osborne's own tax affairs we come across another demonstration of his dishonesty.

When Osborne announced that he was going to give an average £100,000 a year tax break to the 13,000 income millionaires in the UK by cutting the tap rate of income tax from 50p to 45p, he repeatedly insisted that he was not wealthy enough to personally benefit from this tax cut.

In March 2012 he insisted that he would not benefit from his own tax break because he does not earn more than the £150,000 threshold. Here's what he told the BBC:

"My salary is less than the £150,000 threshold... so I am not personally affected."
It is true that his ministerial salary is lower than the £150,00 income tax threshold, but this would only be a valid point if that was his only source of income, which it isn't.

At the time he made this statement it was pointed out by many that he had other sources of income including the rental income from the Osborne family home in Notting Hill and returns on his 15% stake in the family wallpaper business.

In November 2013 the rental income from the Osborne family home was revealed as £127,400 per year, which works out at over ten thousand pounds per month!

This means that either George Osborne is lying, and he is "personally affected" by the cut in the top rate of income tax because his annual income is above £150,000, or he's figured out some way of avoiding taxation on this substantial rental income.

Whichever is the case, it doesn't look good for Gideon Osborne. He's either been lying about not being personally affected by his own tax cut for the super wealthy, or he is using creative accounting in order to avoid a phenomenal amount of tax, which in his own words is a "morally repugnant" thing to do.

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More articles from
George Osborne's economic extremism

The Office for Budget Recklessness
Workfare, neoclassical economics and tabloid mindsets
George Osborne's 3rd World tax loophole
The economic case against tax-dodging
The myth of right-wing patriotism
The Tory "War on Justice"