Friday, 22 June 2012

The Lion's Share

David Cameron tells us that the K2 Fund used by Jimmy Carr and others to avoid tax is morally dubious! But in his explanation of the scheme, he may have let slip the real horror of our plight and the true failing of the way government approaches the use of our money.

Davey told us how wrong it was that hard working people should have saved up “their post-tax pounds” to go and see Jimmy rip the piss, only for Jimmy then to use a loophole so as not to have to pay any more tax on those same pounds.

But Davey has got it wrong! The people going to see Jimmy Carr are not using post-tax “pounds” to go and see him, because “post-tax” their pounds are only worth 80p.

I am going to assume in this little ditty that no one uses their tax free pounds, (those seven thousand six hundred and forty five pounds that were deemed necessary for the basics in life, so were not subject to income tax last year, or indeed the eight and half thousand or so we are allowed this year), to go and watch comedians, be they stand-up or political.

So our entertainment seekers headed off to the O2 with a handful of their post-tax 80p’s, and handed them over to the man at the door.

A good many of those 80p’s were, in turn, handed over to the funny guy, Jimmy. It was after all his show!
Because Jimmy is such a popular fellow and had been working hard all year, the nice people at Her Majesty’s Revenue & Customs think that Jimmy should have been paying 50% on these particular elements of his earnings, and so Jimmy should give them half of all the 80p’s, leaving him with a pocket full of 40p’s.
A bit fed up with the media intrusion into his private affairs, which now prevent him from being able to make any more “poor misjudgements” in his dealings with the tax man, Jimmy heads to the pub and hands over ninety of his 40p’s for ten pints of strong larger.

The duty and VAT imposed by HMRC (again) on said pints is close to 25%, and so Paddy the landlord only gets to keep 30p of each of the 40p’s that Jimmy puts across the bar.

Paddy uses the 30p’s to pay Sally the barmaid, who is working in the pub in the evenings as a second job to make ends meet, and as such is taxed at the full rate because her tax free allowance is apportioned to her day job working at the council offices. So Sally only gets to take home 24p of each of the 30p’s that Paddy is supposedly putting in her pay packet.

On her way home Sally stops at the petrol station to fill up the car, for her commute to work everyday, and hands over her entire week’s wages from the pub, to fill up the tank. The duty and VAT on the petrol represents a little over 70% of its total cost, and as such only about 7p of each of the 24p’s stays in the hands of Mario the petrol station owner.

So there we have it! Five transactions are all it takes for HMRC to convert a pre-tax pound into as little as seven pence of ongoing economic potential. Where will the growth come from that?

We are past the point of moral bankruptcy! We have a bankruptcy of ideas!

It’s time for a new way!

Suggestions on a post card please to:

59 Berkeley Road.
RG14 5JG
United Kingdom of Great Britain and Northern Ireland.

I regret that ideas (especially the good ones) cannot be returned, but if your idea makes it into the party’s manifesto you will receive all the credit it deserves!

1 comment:

Dave Yates said...

It has been pointed out, that I have not taken into account the VAT on the ticket price going into the show!
So Jimmys' 40p would infact only be 32p, therefore Paddys' 30p is only 24p, and Sallys'cut is 19p leaving Mario at the petrol station with less than 6p.