Socialism, hypocrisy and the art of avoiding tax
Like many of you, no doubt, reading about the tax lives of the rich and famous, I am weary of those who profess to be socialist while living big, cosseted lives as members of the global élite.
Some are obviously ridiculous people, like Bono, who when he is not moving his $600m fortune around the global Monopoly board demands radical action by governments to end poverty and redress injustice. Or Russell Brand, reminiscent of the rich man who when told by Christ that he should sell all his possessions and give the money to the poor, gulped and “went away sorrowful”. Or for that matter the late Tony Benn, who bequeathed a fortune to his children in the form of a tax-efficient trust, and nothing to good causes.
Benn at least admitted to the dichotomy between theory and practise: “I try to operate on two unconnected levels,” he explained. “One is on the practical level of action, in which I am extremely cautious and conservative. The second is the realm of ideas, where I try to be very free.”
And so say all of them.
Not, I should add, that I am calling for the populace to rise up with torches and pitchforks. I’m sure Jesus would find a place in Heaven for Bill Gates, who, frustratingly, no matter how many billions of dollars he gives away, continues to be the world’s richest man. The same might even be true of Richard Branson, a relative pauper, who in 2013 vowed that he and his family would invest their fortune in “entrepreneurial approaches to help make a difference in the world.”
“Stuff,” Sir Richard and his wife wrote in a letter announcing their philanthropic conversion, “is not what brings happiness. Family, friends, good health and the satisfaction that comes from making a positive difference are what really matter.”
Especially family, it would seem. “Happily,” the Bransons went on, “our children, who will be our principal heirs, agree with me on this.”
Down the other end of the wealth chain, there are lots of Labour voters – you may be among them – who make sure they look after themselves and their children, but still give money to the homeless and make generous donations to reputable charities or in response to the Radio 4 Appeal. Such individuals (and, again, you may be one of them) frequently send their children to private schools, or else move to wealthy areas in which the local “state” school (usually an academy or free school) can be accessed by way of postcode. Should they or theirs fall ill and they have the money to spare, such solid citizens will regretfully, but firmly, bump the queue by paying up-front for private treatment, assuaging any feelings of guilt they might have by dropping a £20 note into the hospital appeal box on the way out.
Face it, we have all been there, and if we haven’t it’s because we don’t have the cash. Maybe if I had a couple of million pounds I wanted to conceal, I too would be on the slow boat to Bermuda.
We all say we would be happy to pay an extra penny in the pound on income tax if it would fix the NHS. But when it comes to filling in our tax returns, we leave no stone unturned in seeking to reduce the amount we actually fork out. Footballers earning more in a month than most people make in a lifetime protest when cornered that the reason they use offshore tax havens to hide their money from the taxman is that they have to think of their children, who have evidently earned the right, courtesy of the rest of us, to be rich as stink from birth. In America, Democrats will vote for just about any legislation that widens the franchise, boosts racial equality or guarantees the rights of transgender soldiers. It costs them nothing and it makes them feel good about themselves. But when it comes to legislating a higher rate of tax, they don’t want to know. The buck stops where the bucks start.
Hypocrisy – even at the level of Bono – is not one of the deadly sins. Most of us are hypocrites. It helps us get through the day. It is when the hypocrisy brings misery on others (think of Aung San Suu Kyi, Jacob Zuma or Donald Trump) that it becomes a serious matter.
That said, at what point does looking after number one cease to be compatible with leading a “good” life? Consider the example of Barack Obama, who rose from nothing to be President of the United States and Leader of the Free World. Obama is generally reckoned to be a good man, whose career in politics was motivated by the desire to alleviate poverty and social inequality while maintaining peace in the world. The former President and wife Michelle were already worth an estimate $40 million when they signed a contract this year with Random House for a book covering their years in the White House worth as much as $65m. Assuming it takes them two years from start to finish, that’s not a bad rate of return. But it doesn’t end there. Obama charges as much as $400,000 a pop for making speeches, which he does almot every week. This augments his $205,000 presidential pension, a platinum health care package for himself and his family and the million dollars a year he receives to fund an office and staff.
The man is loaded. According to Analytics@American, the online business division of American University, the Obamas stand to make more than $240 million in their golden years. No wonder they felt able to donate the $1.4m that came with the President’s 2009 Nobel Peace Prize to a variety of good causes.
Personally (and you will appreciate the hypocrisy), I don’t begrudge Obama any of this. He at least tried to make America a better place during his eight years in office. But I do wonder why making enormous sums of money has become the norm for ex-Presidents and their wives, including, of course, Bill and Hillary Clinton (net worth $250m, and counting). Perhaps I should ask Tony Blair. Maybe he would know.
Back on Planet Earth, it is the ordinary everyday contradictions that I have to confess irritate me – people who decry the Tories and laud Jeremy Corbyn while gleefully planning their early retirement based on a quarter-of-a-million-pound inheritance, a fat company pension and the windfall from a house they bought for £60,000 in 1985 and hope to sell for £1.5m in 2019. Conservatism, acknowledged or unacknowledged, is, as it always has been, the default position of those with money to spare. It is in the end our own arses up which we disappear. The job of government is to ensure that the resulting greed does not run amok and that prosperity, and opportunity, are shared as widely as possible. The rest is rhetoric, which, money management aside, is what Bono is really good at.