A fundamental principle of biblical justice is that we are all equal before the law. The book of Leviticus reminds us: ‘Do not pervert justice; do not show partiality to the poor or favouritism to the great, but judge your neighbour fairly.’ (Lev 19:15) Yet a new report this month from Tax Watch reveals that such equality does not seem to apply to the way we pursue benefit fraud and tax fraud. While tax cheats costs the exchequer nine times as much as benefit cheats, you are 23 times more likely to be prosecuted for benefit fraud than tax fraud. This is surely unjust.
As Scripture makes clear, the temptation to show such partiality in judgements is perennial which is precisely why both the Old and New testaments rail against it.
There are in fact two counter-cultural realties expressed in the fact that we are all created in God’s image. On the one hand, the fact that everyone is created in God’s image (however marred that image subsequently is) means that we are all of equal worth and dignity in God’s sight. The second is that because everyone is created we are all under God’s authority and judgement. When we show partiality in law, we deny both of these realities. On the one hand we are treating people as if they are not equal – as if there is some significant, judgement-bearing difference between them. On the other hand, we are also setting ourselves up as some kind of authority in the place of God. We are claiming that we are able to determine someone’s value as opposed to the equal judgement that God has made. As such, partiality in law is simply an example of that age old sin – idolatry – in this case, a form of self-idolatry where we assume the place of God in judgement.
Yet that is what seems to be happening in the way we treat benefit and tax fraud respectively. As the Tax Watch report shows there is not a level playing field in the way these two crimes are treated. They point out how:
In highlighting this, I need to make it clear that I am in no way criticising the hard work of HMRC staff who diligently chase up as many tax fraudsters as they can. My criticism here is levelled at a succession of governments from both parties for their chronic failure to adequately resource HMRC, especially in respect of its compliance work which has seen a reduction of 800 staff over the last 4 years. While it is true that in the most recent budget the Chancellor announced an extra £100 million to chase down fraudsters, even here the emphasis was not specifically on tax fraud but on furlough fraud.
The question remains of course why is this the case? Why is it that we treat tax crime so differently to benefit crime? In answer to that, I am unavoidably drawn to the question of who benefits from the relatively light touch given to tax fraud, and to the issue of party funding. As such, I wonder if Micah’s advice remains as pertinent as ever.
Hear this, you leaders of Jacob, you rulers of Israel, who despise justice and distort all that is right;…Her leaders judge for a bribe. (Micah 3:11)
Dr Justin Thacker
Director, Church Action for Tax Justice
Tax, it can sound like a dirty word nowadays. Yet it is core to the smooth, equitable, functioning of society. We constantly hear on the news that there is no money left in the kitty, and that the government is like a household, with a limited budget. Yet here we are, in the midst of the biggest crisis since WWII: the Covid-19 pandemic. In order to prevent the entire collapse of society, the government has had to, rightly, fork out billions: £300bn so far to be exact. But already, our current Chancellor of the Exchequer, Rishi Sunak, has warned that ‘hard choices’ will need to be made to tackle the record levels of national debt incurred during this Covid-19 pandemic, in order to ‘balance the books’ for future generations.
Here at Ethical Consumer, we don’t believe that these ‘hard choices’ should take the form of tax rises or spending cuts on ordinary people. We fully agree with the Christian vision of a just and fair society in which the tax system plays a vital role. Just like Church Action for Tax Justice, Ethical Consumer do not see tax as a burden. It is a way of showing love for our neighbours and is a fundamental tool in creating a just and equal society in which no one suffers with poverty or inequality. To help us achieve this mission, we have launched a campaign to ask the government to impose a 10% Digital Services Tax (DST) on the Tech Giants (including Google, Amazon, Facebook, Microsoft, Apple and Netflix) to contribute to the estimated £300bn cost of the Covid-19 pandemic so far. It has not escaped our attention that these digital companies are not only making exceptional profits in the new locked-down world, but also have long histories of systematic tax avoidance all round the world.
It may interest you to know that the UK has already imposed a Digital Services Tax of 2% since April 2020. Thus, we recommend building upon that 2% tax rate and increasing it to 10% for a temporary ‘windfall’ period. In December 2020, we made a submission to the Treasury Select Committee on Tax after Coronavirus, advocating for precisely this. The DST itself is designed to be a temporary measure, until the Organisation for Economic Co-operation and Development (OECD), helps countries to agree to new global tax rules to prevent profit shifting by multinational digital companies.
Of course, any new iteration of a DST would have some safeguards in place to prevent companies passing on the tax to their consumers. Furthermore, the DST should also be applied to product sales, otherwise, companies such as Amazon will not be brought within its scope. We also call for exceptions to be made for other companies such as John Lewis, which are able to demonstrate through transparent reporting a good record of paying tax, to be excluded from the sales element of the DST. If you would like to learn more about our campaign, please click on this link.
We would love for you as individuals to join us in our fight for a 10% DST levied on the Tech Giants. You can find out more by visiting our website, keep up to date with our work by following us on Facebook, Instagram or Twitter, join our campaign by emailing your MP or host our Covid-19 Tech Tax Campaigner, Nabila Ahmed as a speaker at your online event.
On the 28th of August 2020, the BBC’s medical editor Fergus Walsh published an article asking the public whether it was “time to move on and get back to normal life?” Now, as I write this blog on the 19th of January 2021, having not left the house for more than an essential shopping trip for a number of weeks, I think it’s safe to say the answer was no.
But that is simply to answer the question on a surface level, taking it as a question of whether It is time to return to the norms of family life, the norms of meeting with friends over dinner or enjoying a drink in the local pub. In many regards, though the time is clearly not yet, I do long to see a return to those norms. However, I want to challenge the shallow nature of Fergus’s question, as I propose what we should really be asking ourselves is whether pre-COVID life was ever really normal at all?
The COVID-19 pandemic has brought to the surface a plethora of inequalities throughout our society, but it hasn’t created most of them. It may have exacerbated them, but many existed before this pandemic began and if we’re not careful, they’ll continue to exist long after it’s over. Even if you just slightly lift the lid of pre-COVID society, you begin to see deep rooted inequalities, unprecedented environmental challenges and so much more. Our broken systems and structures dragged society on, increasing inequality and fuelling a climate crisis. Normal was never really that normal. So to answer Fergus’s question, no, I don’t think it’s time to return to normal. Not now and not ever. I believe it’s time to create a new normal.
As Christians we are called (according to Micah 6:8) ‘to act justly, to love mercy and to walk humbly with your God’. Christianity regularly guides its followers down the path of justice, righteousness, fairness and equality. We have a rich history of being at the forefront of social justice, whether that be through Equiano and Wilberforce’s fight for the abolition of slavery, or John and Susanna Wesley as they pioneered UK children’s education through the Sunday School movement. The call to do good, to seek justice and to correct oppression is a call the Church has diligently heeded throughout its existence.
The Christian fight for a more just, equal and fair society is something we’re powerfully reminded of as the world remembers the struggles of Martin Luther King Jr and the Civil Rights Movement in America on MLKDay last week. Here at Church Action for Tax Justice, we believe that the Christian vision of a just and fair society is one that we need to once again set our gaze upon as we begin to contemplate life after COVID and hope to shape this new normal.
Our name really does give away our game. If you hadn’t guessed it already we’re a Christian organisation encouraging the Church in the campaign for tax justice. We believe the tax system can play a vital role in building a more just and sustainable society, one that falls more in line with the Christian vision we previously mentioned.
We believe that tax should not be seen as a burden: it’s a way of showing love for our neighbour and creating the type of society that as Christians we hope for, one where poverty and inequality are a thing of the past. As an organisation we seek to raise awareness throughout Churches and faith communities of the fundamental relationship between taxation, equality and public services. We are currently in the middle of our Fair Tax Now campaign. This campaign highlights the stories of those most impacted by our unfair tax systems and encourages individuals to email their MPs for fairer taxes. Additionally, next week the house of Lords will be debating our Fair Tax Now report.
We would love you as individuals and as churches to join us in our fight for Tax Justice. You can find out more by visiting our website, keep up to date with our work by following us on Facebook, Instagram or Twitter, join our campaign by emailing your MP or host our programme director Dr Justin Thacker as a speaker at your online service.
We are also running a series of Bible studies exploring a number of topics. The studies are free and can be booked here
Author: Bryn Lauder
A version of this article was published in Church Times
When Boris Johnson was admitted to hospital with covid-19, a number of commentators suggested that the coronavirus was a great leveller. When even heads of state can succumb to the illness, then we are all equally susceptible. The truth of course is that the virus is not the great leveller but instead the great revealer. In particular, it has exacerbated the inequalities that pre-dated this virus and it has created, or at least highlighted, some new ones.
Analysis from the Institute for Fiscal Studies has shown markedly different impacts according to pre-existing income, work, health, education, age, ethnicity and gender. It has also demonstrated new inequalities in respect of type of housing, ability to work from home, requirement to commute on public transport and access to green spaces. As their report concluded, ‘We might all be in this together, but we are not all in it equally.’ So while we are aware that from a health point of view, the virus affects older males more severely than other groups, we may be less aware that in terms of employment it is women under 25 who are disproportionately affected. Perhaps more troubling is that there is clear evidence that medical vulnerability to the virus tracks income deciles with poorer communities impacted to a much greater extent than the wealthiest. Similarly, recent analysis by the International Monetary Fund has shown that while the health effects of an epidemic/pandemic last as long as the outbreak, the economic impact on the poor can extend for at least five years beyond the life of the disease. The same economic shock is not experienced by the wealthy.
But does this matter? Is there something inevitable about inequality, that it is perhaps even God-ordained? My answer to is yes to the former, but a resounding no to the latter. There is a parallel with sin here. Yes, it is inevitable, but that does not mean that it is God’s intention. A misunderstanding of this simple truth is why we so often misappropriate Jesus’ statement that the poor will always be with us (Mark 14:7; Matt 26:11; John 12:8). In saying this, Jesus was quoting Deuteronomy 15:11: ‘There will always be poor people in the land.’ But what we miss is what the Deuteronomic passage goes on to say, ‘Therefore I command you to be open-handed towards your fellow Israelites who are poor and needy in your land.’ What we have here then is a both an empirical statement – ‘There will always be poor people’ – and an ethical imperative – ‘Therefore I command you to be generous.’ The inevitably of inequality is no more a prescription for passive acceptance than it is in respect of sin. None of us say, ‘Sin is inevitable, so why bother doing anything about it?’ Yet, for some reason that can be our attitude to inequality – one of the fruits of sin.
So how can we tackle it? Well there are many ways but at least one of them involves ending the unfair tax system that impacts both the global and national poor. Globally, it has been estimated that up to three times the amount we give in aid to Africa leaves that continent via tax-dodging by multinational corporations. Recently, the OECD has been leading a process to reform the global tax rules but many wealthy nations oppose reforms that would help the poorest. Here in the UK, the most recent analysis suggests that when all taxes are taken into account (not just income but also council, VAT, taxes on wealth) - and when we consider growth in the value of assets - then the richest in our country pay just 18% of their income in tax compared to 42% for the poorest. This is fundamentally unfair.
Recently, we celebrated the anniversary of the birth of Florence Nightingale. It was instructive to me how many of the Christians commenting on this drew attention to the care she showed the soldiers dying in Crimea. That is true of course, but what they all seemed to miss is that her real contribution was not in one-to-one care, but in the way she used statistics to analyse disease and death rates, and recommend policy solutions in response. Nightingale raised her head above the parapet of the immediate to ask the question ‘Why are so many dying?’ Hygiene standards that save countless lives today are the result. I wonder if as Christians we need to do the same. Of course, in our communities there are many individuals suffering and we must minister to them, but at the same time there is a need for some of us to raise our heads and look at the big picture of what is going on, and tackle these structural causes of inequality too. And that is what tax justice is all about.
Church Action for Tax Justice
All-age tax justice
Val Jenner reflects on her experience of leading an all all-age tax justice service.
For Tax Justice Sunday, on 14 June, I led a Quaker all-age meeting for worship themed around tax justice.
To help churches highlight the issues involved in tax avoidance around the world the CATJ website provided all of us with lots of material – a video version of a service, a short video illustrating some of the problems and other Bible-based materials.
For Quakers in Britain, who follow unprogrammed, silent meetings for worship - where, while an elder holds the worship space prayerfully, 'ministry' may arise through the working of the Spirit from anyone who is present, but should not be prepared beforehand - a Sunday dedicated to a special theme is a challenge. However with help from the excellent materials available, and mixing this with Quaker Faith & Practice, our book of discipline, we were able to do this at my local Quaker meeting.
The key to this was using the one semi-programmed format we are familiar with: all-age worship. This allowed us to keep our young people and their families with us for the whole hour, instead of going into children’s meeting as usual after the first fifteen minutes. It required looking at the language used in the materials and thinking about the meaning of the concepts to find accessible, child friendly versions, thinking about activities and story that would give us metaphors and holding forms.
And for this I worked with Friends from our children’s committee, two of whom, like me, are elders in our meeting. All of whom are used to, and skilled in, thinking about the needs of our young people and their religious education. We thought about activities that younger children might like and what our strengths were to facilitate these – for example one is an artist so she led a group in painting and drawing, another is an accountant so he was part of a discussion group. We also agreed we wanted to bring it back to everyone’s experience in lockdown – people’s needs and the experiences of sharing and kindness that we have had in different ways.
The other complication was of course using zoom in this changed time. Normally we would all be together in the big meeting room and activities would happen in the corners and children and adults might move around, make some noise and act as a background to, and sometimes swap with, those holding the silence. It’s not a problem for us usually, but the thought of that going on from different homes all in one screen felt too much. So we used chat rooms for the central twenty-minute activities. We finished up after meeting with a discussion chat room for those who wanted to explore practical next steps. I don’t think we could have attempted this at the beginning of our online experiments with worship, but it’s a sign that we’ve learnt a lot in the past months and are all more comfortable with the medium.
I hope you find the resulting format helpful. It’s just one response, from one worship community, but the materials on offer on the website are rich enough to afford a lot of fun with re-jigging, re-wording, cutting and pasting to produce something specific to your community’s needs. Enjoy!
Val Jenner is a member of Central England Quakers and an elder at Selly Oak Local Meeting. She is also a member of CATJ West Midlands.
The script that Val used is available here
Do deficits matter? Kelton says 'No'
A Review of Stephanie Kelton, The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy (2020: John Murray Press)
‘How are we going to pay for it?’ That seems to be the concern of swathes of our political class and journalists as on a seemingly weekly basis we get another announcement about coronavirus spending. Theresa May famously told us 'There is no magic money-tree' and James Meadway, former adviser to John McDonnell, would seem to agree, so on at least some parts of both the left and the right the problem of how to pay for coronavirus is indeed a problem.
But is it? For as UK public debt has grown by a staggering £190bn and our debt to GDP ratio is at a 50-year high, Stephanie Kelton, Professor of Economics at Stony Brook University steps into the debate and essentially says, ‘Don’t worry, it will be fine.’ That is perhaps, not entirely accurate. But what she does say is that the deficit is not the thing we should be worried about. That is not our problem; unemployment is.
Kelton is an advocate of what is called Modern Monetary Theory (MMT). A bit like postmodernism, MMT is so different to how we usually think about public finance that it can take a bit of effort to get our head round it and it is also sometimes a bit slippery around the edges. Nevertheless, it has a core idea that turns on its head how we usually think about tax and public spending.
In short, MMT states that we don’t need taxes to pay for things; the government can pretty much pay for what they want. There really is a magic money tree.
As Kelton makes clear, this is not necessarily a socialist idea; the things we pay for could just as well be more military spending as much as unemployment benefits and healthcare. But the primary point is that we don’t need to collect the taxes to pay for what we want. In a reversal of the usual tax then spend dynamic, according to MMT, we first spend and then collect the taxes afterwards.
The key point here is that contra Thatcher, national governments – at least ones which are able to issue their own sovereign currency (USA, UK, Australia, Japan, but not the Eurozone) – are not like households. They don’t have to balance their books; their central banks really can just print money. How is this possible? Because money is not gold. The British pound used to be pegged to a tangible asset, like gold, but the gold standard disappeared in the '70s and since 1992 the pound hasn’t been fixed to anything. The reason our pound has value then is primarily because our government says it has value, and we – and many other countries in the world – continue to have a sufficient level of trust in our government. In particular, we trust the value of the money we hold because the government requires us to pay taxes in that currency. In other words, the very fact that the government asks us to pay taxes in pounds means that we seek to earn pounds in order to pay those taxes. And if we are seeking to earn pounds then such pounds have value. Their value lies not in their gold equivalence, but in the demand that everyone has for them.
But if they are not pegged to any fixed standard, then one implication of this is that the government (via its central bank) can just issue money as it sees fit. It doesn’t need to be backed by anything fixed and tangible. The government can just do it.
But if that’s the case then why do governments collect taxes – why not just print as much money as we want? Because to do so without restraint would cause runaway inflation, and in a situation of runaway inflation the value of our currency obviously does decrease.
So MMT is not a recipe for recklessness, there are limits to the magic money tree, but Kelton’s point is that the limits are set by inflation, not by the size of the deficit – hence the title of her book. Taxes then are one of the ways in which we stop the runaway train of inflation. They take money out of the system so that in essence we don’t have too much to spend. They act as a break on inflation, but critically – according to Kelton – they are not being collected so that we can pay for things.
As she argues, we don’t tax in order to then spend. We spend the money and then tax it partly to ensure there’s not too much of it sloshing around. 'The government doesn’t need our money. We need their money. We’ve got the whole thing backward.' All of which means we needn’t worry about the deficit in the way that most economists and politicians seem to.
Now all of this might sound a bit crazy – it just can’t be true. And that was very much my first reaction, and while MMT is certainly not mainstream economists it does seem as though those who would criticise it don’t quite manage to land their punches.
So, Edward Chancellor, an economic historian has suggested that following an MMT prescription would inevitably lead to inflation because 'The truth is that governments have an inherent bias towards inflation', but we’ve not had an inflationary problem for 30 years and with the current crisis the chances of that are near-zero. More to the point, inflation is precisely the one thing that MMT watches like a hawk – it is not a prescription for reckless spending.
More significantly, Martin Wolf in his analysis of MMT essentially argues that its framework is correct – the value of money is created by governments demanding tax receipts in that currency – but that we need to be careful, not least because governments cannot be trusted to implement it wisely. He has a point, but at the same time the history of neoliberal economics is that even with so-called responsible government behaviour huge boom and busts have occurred. It is not as though, in the absence of an MMT approach, our economic system has been devoid of crises. In other words, the problem he posits is not unique to MMT, it’s a feature of any reckless government.
So overall I’m quite taken with Kelton’s argument but I do have two critiques, not so much of the theory, but of the book. The first of these is simply that it does lack empirical support. There is a smattering of empirical evidence cited throughout but overall it feels somewhat thin. Presumably Kelton would argue that’s because MMT hasn’t been tried sufficiently and of course there may be some truth in this.
More importantly, I don’t think she does enough to directly engage with those economists who do reject MMT. It’s not enough to say they are just stuck in a different economic paradigm. I presume some of them are intelligent enough to be open to new ideas, so why isn’t it more broadly accepted? The book would have been considerably strengthened by dealing directly with such critiques.
Whether or not we need to worry about the current deficit is of major political and economic significance, and therefore for that reason this book is hugely important. MMT has been around for some time and so, in one sense, this is nothing new, but its arguments have to a large extent been ignored and ridiculed. It is time they were taken seriously and properly engaged with, and this book is a great introduction to ensuring that happens. MMT might still be dismissed but it can no longer be ignored and for that we can thank Kelton.
The UK government is proposing a series of ten freeports across the country. Freeports are areas, not necessarily connected to actual ports, in which business activity can take place free from the normal tax and regulations that apply in the rest of the country. The intention is that they encourage business development in those areas.
However, we think freeports are a bad idea. They create an uneven playing field between businesses that can move to the freeport zone and those that can't, and international experience has shown that they are notorious as being havens of criminal activity and money laundering.
The European Parliament produced a highly critical report of the Luxembourg example commenting that, 'Free ports are conducive to secrecy. In their preferential treatment, they resemble offshore financial centres, offering both high security and discretion and allowing transactions to be made without attracting the attention of regulators and direct tax authorities.' The Financial Action Task Force went further saying that they can be 'misused for money laundering and terrorist financing'.
Moreover, there is scant evidence that they do actually create a significant number of good jobs; they seem to just shift jobs from one area to another.
There is currently a government consultation taking place and CATJ has responded to it. You can read our consultation response here
Below is the text of a letter, signed by Church Action for Tax Justice and a coalition of organisations, calling on the government to apply socially responsible conditions to corporate bailouts. We believe that now is the time when in exchange for taxpayer money, we can ensure that companies pay their fair share of tax, prioritise people and planet over profit, and ensure fair pay conditions.
The Rt Hon Boris Johnson MP
10 Downing Street
Cc: Rt Hon Rishi Sunak MP, Rt Hon Sir Keir Starmer MP, Rt Hon Ian Blackford, Rt Hon Sir Ed Davey MP, Elizabeth Saville-Roberts MP, Caroline Lucas MP
3 July 2020
Business bailouts must build an economy that works for everyone
Dear Prime Minister
The Government yesterday announced a bailout loan for Celsa steel, including conditions for the company on employment, climate change and tax use. This is bold action to support a vital business for the UK economy. But as we wait for full details of the loan conditions, we are concerned that all future Government support for businesses serves the wider public good.
Deciding to bail out major companies offers a crucial moment for redefining the rules of business behaviour in the post-Covid economy. Will we prioritise a fairer, more secure and sustainable economy, or will we deepen existing inequalities and increase our vulnerability to shocks?
We believe that all bailouts should be conditional on meeting wider social goals. Public money must not be channeled into inflated executive salaries. Climate targets and environmental protection must be hardwired into business performance. And companies must commit to building a healthier, more equal society: paying their share of tax, creating good jobs that are paid fairly, and eliminating racial, as well as gender, discrimination in their pay structures.
This is the moment for a new deal that prioritises what matters most to ordinary people: their pay, their taxes, the natural world around them, and equality within their communities. As such, we ask that any businesses receiving financial support must be required to:
In addition, Government must conduct a meaningful Equality Impact Assessment of all business support programmes and must publish the findings.
The Covid-19 pandemic has highlighted in stark relief the inequality and fragility in our economy. Going back to ‘normal’ would only leave us more vulnerable to future shocks. We call on you to ensure that businesses play their part in building a more secure, fair and sustainable future for everyone.
Carys Roberts, Executive Director, Institute for Public Policy Research
On behalf of
Dr Justin Thacker, National Coordinator, Church Action for Tax Justice
Rob Harrison, Director, Ethical Consumer
Paul Monaghan, Chief Executive, Fair Tax Mark
John Sauven, Executive Director, Greenpeace UK
Luke Hildyard, Executive Director, High Pay Centre
Miatta Fahnbulleh, Chief Executive, New Economics Foundation
Robert Palmer, Executive Director, Tax Justice UK
Richard Murphy, Director, Tax Research UK
Dr Wanda Wyporska, Executive Director, The Equality Trust
Dr Katherine Trebeck, Advocacy and Influencing Lead, Wellbeing Economy Alliance
Mary-Ann Stephenson, Director, Women’s Budget Group
Will Stronge, Director, Autonomy
Danielle Paffard, Build Back Better
Neil McInroy, Centre for Local Economic Strategies
Mathew Lawrence, Director, Common Wealth
Colin Hines, Convenor, Green New Deal Group
Hannah Martin, Co-Exec Director, Green New Deal UK
Fran Boait, Executive Director, Positive Money
CALL to ACTION: Write to the chancellor
The US is pulling out of the negotiations that might have reformed global tax rules. We are asking our supporters to write to the chancellor to ensure that Britain does not give in to these US tactics and that we prioritise the needs of developing countries in the discussions.
Template letter for chancellor
Global tax rules - what next?
In the last couple of weeks there have been widespread news reports that the US is pulling out of the global tax rules negotiations. These discussions have been taking place at the OECD (Organisation for Economic Cooperation and Development) under the title of the BEPS 2.0 inclusive framework.
It is widely accepted that the current rules for how large multinational corporations are taxed are not fit for purpose. The fundamental problem is that it is very easy for companies that make money in one country to declare that profit in another. If the country where they declare that profit is in fact a tax haven (a country that charges little or no corporation tax) then the company pays very little (if any) tax on its profits.
Globally, this behaviour is estimated to cost the world upwards of $600bn each year, approximately 20% of global tax revenues. For developing countries this loss is especially problematic as they do not have large tax revenues in the first place, and so as a proportion of their overall tax income the losses from tax dodging impact them especially hard. Estimates vary but currently, it is suggested that developing countries lose anything from $200-400bn every single year. This is significantly more than those countries receive in foreign aid.
In light of this, it is essential that any reform of the global tax rules must put the needs of developing countries first. If they really did receive the tax that they are owed then it’s possible that the Sustainable Development Goals could be achieved, and extreme poverty eliminated. This is the prize that genuine reform of global taxation holds out for us.
However, the withdrawal of the US from these negotiations has certainly made the prospect of a good outcome far less likely. In their communications about withdrawal, it is not entirely clear if the the US is merely asking for a ‘pause’ while we all get to grip with Covid-19 or whether they are pulling out entirely. It is certainly clear that they have withdrawn because they are not getting their way.
For this reason, we are asking our supporters to write to the chancellor to encourage him to continue the negotiations, but to do so in a way that prioritises the needs of developing countries. There is a serious proposal on the table, led by the G24 group of developing and emerging economies that would have created a fairer global tax system. The UK government should seriously consider it.
At the same time, in April this year, a 2% digital services tax came into force in the UK. This tax specifically targets the giant tech companies (such as Facebook, Google, Amazon) that make profit from UK consumers but who pay relatively little tax in the UK. The US has threatened retaliatory action against countries that impose such unilateral digital services taxes, but we need to ask our chancellor to stay strong and not give in to such tactics.
We have therefore provided a template letter that supporters can use to write to the chancellor, and we would encourage you to use it.
A statement from Church Action for Tax Justice in light of the Coronavirus pandemic (June 2020)
The British public believe in fairness. Everyone has the right to benefit from society, and everyone has a responsibility to contribute to it. We see this sense of fairness enshrined in our public services. This has been especially the case in respect of our NHS where the same healthcare is available to all free at the point of delivery.
Yet there are some aspects of our community life that seem especially unfair, and one of these is our tax system. The simple fact is this: our tax system disproportionately favours the wealthy and harms the poorest in our society. Consider the following:
What does this mean in practice?
It means that the average cleaner in the UK is paying more in tax as a proportion of income than the average CEO whose office is being cleaned. It means the average security guard pays a higher rate of tax than the average executive whose building they are keeping safe. This is fundamentally unfair.
The British public think so too.
In our survey of over 1,000 working age adults 80% thought that tax avoidance was morally wrong. This belief was true right across the political spectrum from Conservative to Labour, from Remain to Leave. It was true in every age group and across genders. It is very unusual for the British public to be so united on a single moral issue. Yet this is what we found. And when asked why they thought it was wrong, it was the issue of ‘fairness’ that was top of their list with 75% stating that we all need to pay our fair share.
So why does fairness matter? Because contributing a fair share is how we create a fairer world.
A sense of equality and justice is at the heart of who we understand ourselves to be. We believe that everyone is equal, that no-one is above the law, that if there is a rule – such as pay your taxes – then everyone must follow it. From a Christian point of view, this idea reflects the equality that is ours by virtue of being created in the image of God. In the ancient world, the concept of the divine image was reserved for the supreme ruler, but in the pages of Genesis the divine image is conferred on everyone. Under God, we are all of equal worth and dignity.
This is why our scriptures repeatedly find ways to encourage the sharing of resources for the benefit of all. We see this in the Jubilee principles when every 50 years all debts were to be cancelled; we see it in the Early Church (Acts 2) when people sold land and property and distributed proceeds according to need; and we see it in Paul’s letter to the Corinthians when he tells them 'the goal is equality'.
At the same time, the Scriptures are also frequently full of condemnation for those who have made a god out of greed, selfishly hoard their wealth, exploit their workers and fail to pay what they owe either to the ruling authorities or their workers. The World Council of Churches, the World Alliance of Reformed Churches and others have conceived the idea of a ‘Zacchaeus Tax’, from the story of the tax collector who gave back four times over what he had cheated on the taxes he levied.
In response, then, Church Action for Tax Justice is calling for the following measures to be implemented to ensure that everyone pays their fair share, and so that we see a fairer world, one which is more equal and just, especially in this time of crisis.
These objectives are based on those developed by a coalition of tax justice organisations. However, this formulation belongs to CATJ alone. For the more widely agreed Statement see the website of Tax Justice UK in due course
 http://www.taxresearch.org.uk/Documents/WealthTaxData420.pdf References for other points available on request
Dr Justin Thacker is the National Coordinator for Church Action for Tax Justice