The Westminster Principle in Taxation: It’s What the ANZAC’s Were Fighting For.

It’s worthwhile reading to the end of this one, for it finishes with an ANZAC story about New Zealand’s war-time hero, Charles Upham (V.C. and Bar), and the sad knowledge he gained about the society he came home to after WWII, as it changed about him into something that more resembled what he had been fighting.

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This ANZAC Day it is worth remembering our birth right in the West, paid for by blood, was classical liberalism; that philosophy of limited government and liberty of individuals: freedom of speech, markets, religion, assembly, of thought and intellect, and a free press (free to criticise and oppose, without fear of retribution) - the state as servant of the individual, protecting their person and property, not the state as tyrannical master, plunderer by force of property and liberty.

It was this ideal that the ANZACs were fighting for, and died for: men and women. And incalculable more men and women have died trying to escape the state tyrannies they were born in, be it the Soviet Union, Cuba, China, North Korea, et al, to be perhaps capable of the chance of living free lives.

Within this philosophy the very notion of a compulsory taxation does not sit well, frankly, although if we must have such compulsion forced on us by the state, voted for by a mobocracy looking for the illusory free lunch, then Commonwealth countries have had in legal precedent since the 1930’s a landmark classical liberal principle, referred to as the Westminster Principle, that gave the individual some small degree of liberty from the all-powerful state in its taxing operations, which is the operation of the authoritarian surveillance state:

Every man is entitled if he can to arrange his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure that result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax. (IRC v Duke of Westminster [ 1936 ] AC1 (HL)).

That is, the individual can arrange their affairs vis a vis structuring, estate planning, et al, according to their own rational self-interest - so long as 'artificial' (non-commercial, non-market) steps are not taken to 'avoid' tax - and not pursuant to supplying the maximum revenue, necessarily, for the coffers of the redistributive larceny conducted from the Fortress of Legislation: the individual ascendant, not the state.

It is a disgrace that in New Zealand even this principle has over the last decade been destroyed, and destroyed utterly, in the very courts that were meant to be the individual’s buffer against the tyranny of state. I’ve explained why on this post: the minds of our children have been captured in the classroom, generation after generation, and immured on the treacherous reef of belief in a statist theocracy; 95% of our secondary school teachers belong to that hard Left union, the PPTA, with a similar percentage of primary school teachers signed up the NZEI. These teachers preach the forced sacrifice of the individual’s liberty on the bloodied altar of the common good, and the state as redistributor of private property in a morality turned on its head. Our School Curriculum Document imposes this Soviet ethic into the basis of our very curriculum.

So it is not surprising to find Deborah Russell, Massey University lecturer in taxation, openly declaring her Left politick to the impressionable minds being taught by her, and perversely rejoicing in the op-ed of the Dominion, about the demise of the Westminster Principle:

This principle has been beaten back in recent years, in particular by laws that ask people to consider whether the tax minimisation scheme they have entered into is so artificial that instead of merely avoiding tax, the taxpayer is actively evading tax.

But even if the procedures used are legal, it’s not clear that they are ethically acceptable. This is in fact the closest I can get to understanding exactly what a rort is: it’s something that is technically legal, but nevertheless pushes the law to such an extent that it is immoral.

And it is immoral to make such a big effort to avoid paying taxes. It amounts to saying that you just don’t give a damn about anyone else, and that all you want to do is take. And take. And take some more.

[Snip]

We’ll know that the government is serious about all New Zealanders contributing fairly to the common good of our society when they start asking hard questions of their tax avoiding mates.

The capitulation of freedom and the ethos of individualism is complete in these four paragraphs: we don’t have tanks on the streets, but it gets little worse than this, for we have lost the battle where it matters: in the minds of the citizenry. Because when the Westminster Principle was lost, by the same process in every sphere of life in our social(ist) democracies, every value that made the West the best civilisation to live in, ever, is gone. I only need to parse the news this week to prove the point (and my blog shows I can do this process every week).

Here, a judge in our employment courts has just disallowed a redundancy on the grounds the employer didn’t have the ‘business case’ for it:

It has been confirmed the Employment Court can inquire into the business case behind a redundancy to see if it is genuine.

Confirmation, with major implications for employers, is found in the recent judgment of Employment Court Chief Judge Graeme Colgan, who found the rationale behind a Hawke's Bay farm’s decision to make a farm worker redundant did not stack up.

If you’re not certain what just happened here, then the below two comments made to that thread demonstrate the gravity of it:

So the lawyer judge stands in the shoes of the employer making financial decisions affecting other staff and shareholders but with no responsibility for the company's operations.

And:

On the face of it, the company had made a judgment that the job did not require a person of the existing holder's skill/experience and it would save money by downgrading the position. Offering the position to the present holder at a lower salary is OK in theory but it will only work if the person concerned accepts the situation. As often as not, as a result of the downgrade, the person has a 'chip' on their shoulder. As a general rule, judges with little or no senior management experience are not competent to make these sort of decisions.

There is no philosophical or political difference, from the demise of the Westminster Principle, or to the fact of an employer’s business being everybody else’s business but his own. There's not one without the other: everything connects.

And again this week, to cite another example of the rampant statism that rules, a practitioner of a once proud free press in the United Police States of America, preaching the nationalisation of children:

MSNBC’s Melissa Harris-Perry, responding to a backlash for a promo she recently appeared in, doubled down Monday on her claims that children do not belong solely to their parents.

“This isn’t about me wanting to take your kids, and this isn’t even about whether children are property,” she said. “This is about whether we as a society, expressing our collective will through our public institutions, including our government, have a right to impinge on individual freedoms in order to advance a common good. And that is exactly the fight that we have been having for a couple hundred years.”

The MSNBC host has been thrust into the spotlight lately for a network promotion she appeared in, claiming that kids belong to whole communities.

“We’ve always had kind of a private notion of children. Your kid is yours, and your responsibility,” she says in the ad. “We haven’t had a very collective notion of ‘These are our children.’ So part of it is we have to break through our kind of private idea that ‘kids belong to their parents’ or ‘kids belong to their families,’ and recognize that kids belong to whole communities.”

This entire notion is so horrific, children belong to ‘communities’, just as my wallet and my bank accounts do via the tax department, that if I have to explain it to you, then sorry, you’re one of the fallen, there’s no coming back to humanity for you. What do you think of your children belonging to the community, Deborah?

Returning to these shores, and to where I started this piece, the Dawn Parades to commemorate the heroic fallen on ANZAC Day, an anecdote provides no better place to sign off on.

I have in the past talked to several IRD staffers in Christchurch, who commented on how ‘unpleasant’ it was dealing, before his death, with Sir Charles Upham, VC and Bar, on his farm north of Christchurch, and I don’t mean audit, just routine advisories, for example, when GST first came in: please don’t take offence, my friends in IRD, but after he got through with fascists in Europe, Sir Charles came home and obviously realised with rude shock the enemy was in-country: that enemy was the rampant state that maintained by force and coercion ascendency over the liberty of the individual, and the rubber met the road bearing the police-state to Sir Charles’s farm via the Inland Revenue Department, so he dedicated himself, it seems, whenever the opportunity arose, to make life particularly unpleasant for IRD staffers who dealt with (to) him.

So, and sorry, in what might seem a very low blow, but in fact is simply me having to  get down to the bottom of the grave in which classical liberalism has been buried; to the Deborah Russells, to the politicians that hold the theocracy of themselves over our lives, to the bureaucrats in the departments that daily usurp the rule of law by enforcing police-state powers upon us; if you woke up early this morning and attended a Dawn Parade, then what the hell were you thinking? Sir Charles understood the enemy, and I'm afraid it was you. Daily, as you go about your work, you disgrace and pile dirt on top of what the ANZACs were fighting for: our freedom; Classical liberalism; the Westminster Principle; our right, if we are harming no one, to be goddamned left alone by you and this enormous, lunatic state that’s comprises over 44% of the spend in our entire economy.

Finally, it is further worthy to note, when the Westminster Principle was being attacked, mutilated, by the hive mind of our judiciary, and then buried without ceremony, what was our current Minister of Taking, Peter Dunne - tweeting this morning about the Dawn Parade that he had attended - doing? Did he straighten his back, go to battle in the Fortress of Legislation, using the law to reaffirm the primacy of that principle to New Zealand as a free Western nation? No: everything Mr Dunne has done since holding that office, farcically, though damningly symbolic of the statism under which our system runs, under both a Labour, then a National government, via coalition, has been to merely write the epitaph on its tombstone, and bury it, with our liberty, as deep as he could, thinking he is legislating the fair society. What do you think Sir Charles would have to say to you, Peter? I know what that would have been, from my conversation about him, but I can’t write it here, suffice to say it would be along the lines of what I have said on this very blog before: George Orwell wrote a chilling view of the nightmare society in his novel, 1984, in which he said ‘If you want a picture of the future, imagine a boot stamping on a human face — forever’; well you, Peter, have your head stuck so far up the politick, you have lost sight and feeling for those taxpayers, faces down, necks exposed, you spend your career stamping on, and as your department is commissioned to do, forever … Every year liberties continue to be lost as the state grows itself, and we are taken down the road to our serfdom.

Related Posts:

Reply to Deborah Russell on Tax Havens

Reply to Deborah Russell on Tax Havens II

Fair:What Does it Mean

Powers of IRD

Fran O’Sullivan, Youth Unemployment & Another War in the Pacific.

Fran O’Sullivan’s mind may well cause another war in the Pacific, and possibly a pan-European war. Fanciful? Note I’m attacking Fran’s ideas, not Fran – on Twitter she has a great sense of life, plus is something rarer and rarer these days, polite: I like her. However,  it’s ideas, philosophy, that makes a society what it is, so let me join the dots from her piece this weekend on youth unemployment, though noting the road signs first.

Other than for clarification purposes I am largely going to stop employing the Left versus Right political tagging system in this blog. A former US president, the last one that had a clue anymore, Ronald Reagan, said the health of a society did not come down so much to Left versus Right, but up versus down, or, more significantly, freedom versus statism.

And so the first dot: Fran has the mind of a statist, with all the contradictions that entails. Fresh from advocating the nationalisation of private property for the ‘common good’ of the Christchurch rebuild, now Fran is advocating we continue the nationalisation of our youth in order to solve youth unemployment.

Of course, I’ve written on how our youth are already nationalised by a state education system where the state demands it be the alpha and omega in every child’s life, despite the ideas of their parents, but the contradictions in Fran’s piece demonstrate why Western civilisation is now falling apart at the seams on its headlong rush to the statist gulag, again.

I have no dispute with the opening part of Fran’s analysis:

It is truly bizarre that the number of unfilled skilled jobs is increasing at the same time as we have record youth unemployment and many graduates find themselves working in jobs that don't pay them enough to get on top of student debt and have enough over to save for their futures.

They have been sold a pup.

Many have been brought up on a "follow your dream" diet only to find out too late that just following dreams doesn't always result in a job. An injection of realism is long overdue.

The problem, and the first contradiction, is Fran then sees realism as not coming from the free market, that real world expression of the complex needs and desires of every individual in society finding voluntary resolution without the force of the state gun; rather, she finds realism as coming from the artifice of the state gun itself:

Key could start by cancelling the top personal tax break and "reinvesting" the hundreds of millions of dollars that would otherwise have gone into Bill English's Treasury coffers into a massive state-backed scheme to train young people in the skills needed for today's workforce.

First contradiction clearly stated:

Fran rightly refers to the current disastrous state-devised bums on seats ‘follow your dream’ tertiary funding system, which in her own industry is probably turning out ten media graduates for every media job. However, her solution is to fix this by more of the same: keep higher taxes, taking away the earnings and choices of private firms, so the state can train youth in the skills required by those private firms. Well if the state couldn’t get the skills match right with the current iteration, why are they going to the next time? Evidence shows bureaucrats are the last group to be entrusted with such an important task.

The real problem with Fran’s solution is it avoids the elephant in the WINZ queue: the welfare state that is so huge it has become a cushion obstructing the view from the market signal of skills needed, to those who need the skills. And that cushion is so huge because it’s been embedded for so long, and growing every year – even in every Bill English budget, the government dollar spend has continued to increase. Indeed, I am a prime example of the long term nature of the dilemma.

I finished high school, Form 7, in the early eighties, and because I liked reading and writing, with no thoughts to a job at all - I didn’t need to, after all, because my education was ‘free’ on the effort and risk taking of businesspeople and workers who were being forced to pay for it – I went straight into an Arts degree, English language and literature, at Canterbury University. I got my degree and had a great time, on the whole, but then found first year out that with no experiences to write about, and a bestseller novel in New Zealand considered to be 5,000 copies sold, ie, a hobby, I had no way to earn money other than teaching, and I couldn’t stand children. At that stage I had the option, which I suspect is the most taken one now, to simply puddle around on welfare, ‘doing my thing’, however,  I chose, based on my upbringing, to find work, and of all things - yeah I have many regrets at the particular choice - to first work part time at IRD, then a CA firm, while gaining undergraduate and Honours degrees in Accountancy from Massey University, which Mrs H and I paid for. My point being here, that the disconnect caused by the welfare state in the market for jobs, existed way back then and if anything it’s worse now.

Fran’s miss here is shown by another of her contradictions. She says that the state needs to train our young rather than employers relying on immigration to get the right skills at the right price, using the example of our dairy industry:

… as with the dairy industry - farmers would rather import low-paid but highly skilled workers from the Philippines who will work long hours, rather than set up an optimum working environment for young Kiwis.

In an attempt to not misrepresent Fran too badly, yes, she writes that many employers complain Kiwi kids come to the job interview not wanting the job, rather just a tick to ensure the ‘WINZ cheque keeps rolling in’, and on that note she’d finally cracked the reality of it, saying families of such children needed to take responsibility, but then, when so close, took instead the road to my serfdom of saying that responsible families couldn’t be relied upon, at least that’s the inference I must draw from her recommendations, thus the state must step in with my tax money, missing the point that the welfare state is what is destroying families, self-responsibility and self-reliant communities. Youth unemployment in New Zealand and the mis-match of skills is not down to something so simple as ‘training’: it’s systemic.

To prove my point, there was a fascinating documentary on New Zealand telly last week about smart animals. The most interesting segment on it was about two birds from North America; they were the exact same breed of bird, but one was the offspring of a bird that lived in the hostile, cold, north of the continent, the other offspring of a bird from the south of the continent where food was plentiful and the weather mild. Each of the birds was given the same task of getting food out from under glass: the bird born of the harsh environment found the job easy, the bird from the soft south couldn't do it, and would’ve starved. The harsh environment had led to the bird from the north being far more innovative and intelligent, and remarkably, this was hard-wired into it.

Now, join the dots to that bird from the harsh north and ‘highly skilled workers from the Philippines who will work long hours’, and figure out why far too many Kiwi children wouldn’t have a bar of being away from their iPads to get up at four in the morning to go milking. Many of them are not employable, and that has little or nothing to do with 'skills', but attitude and what I would call 'nous'. Or put simply: the ability to get out of bed each morning, not just when you feel like it, and go to work. Surprisingly, this stuff’s not hard.

Here’s the solution of a free man. Get rid of the minimum wage, get rid of welfare outside anything other than a safety net in-extremis, get rid of the government cheque that ensures too many children are not being born of love to prudent and the sensible ‘families’, instead, get the state out of lives, stop the profligate, irresponsible spending of other peoples money by politicians so incompetent I wouldn’t trust most of them walking my dog, so we can start building responsible families, again, that will keep their youth at home if required and pay for their keep while their child transacts voluntarily with employers willing to put their own resources into training them for their jobs, including paying for any tuition needed specific to those jobs, through the trade-off of a low wage early on in order that both parties are availed of opportunity.

Yeah, yeah, I know, I can hear the bleating already at what I've just written. Before traveling to the wars this statist mindset is about to cause, let me first close off the statist complaints to what I have just said:

The statist will say this will lead to child slavery: employers will take the cheap labour, then cast them adrift? Yes, some will, but very few: most employers want to build their businesses and their profits long term, thus such bad behaviour will be counter-productive to them. More, most employers I know are simply nice people: statist’s would be surprised looking beyond their own cynicism at just how nice most people are, if left to their own pursuit of happiness.

The arty statists will say but what about culture if training and education is not paid for, planned and directed by the state? The realism of that is, despite an A+ grade average across stages two and three in my arts degree – um, stage one I’d met women for the first time after a country high school - do you know what I remember, or additional thing I have taken from it? Nothing. If I had not done that degree would I still love reading books? Yes. Would I still be doing my personal writing projects and blogs such as this? Yes. In fact, I’m just one chapter away from finishing a novel I’ve been working on for two years now in my spare time. Culture just is, and it’s a travesty to promote any other notion of it that is dependent on tax slavery of one stranger to another.

I say all the above in earnest, because looking at the world around me, with the brutal and huge Western surveillance states we’ve built, disregarding the lessons of the twentieth century, the world now teeters on the verge of violent conflagration, arising from the economic conflagration that has already occurred on the back of big-Keynesian-statism.

Japan’s economy, stifled in low growth for the last three decades by one of the biggest government debt loads in the Western world, coming in at a staggering debt-to-GDP ratio of 229% (compared to Greece on only 120%) has always been, as the phrase goes, a bumblebee in search of a windscreen: well, unfortunately it’s just found the driver, and already he’s got his foot on the accelerator to build an ever larger Keynesian hubris of debt that may well finally destroy the heroic Japanese saver, leaving no one to buy their government debt. That driver is new Prime Minster, nationalist war monger, Shinzo Abe who is right now embarked on one of the biggest government spending programs that country has seen, as well  as the type of null-minded nationalistic brinkmanship that may well see war in the Pacific again.

If you had told an European in 1935 that in just four years their world would be in a vicious war where the big state would set about the wholesale slaughter of civilisation, by which I mean, people, they would have laughed. I put it to you who’s to say Europe is not at 1935, again, with the Nazi Golden Dawn – a party up to half the Greek police force voted for - marching the saluting fist in Greece; and the far right in the Austrian parliament demanding a written register of Jews in that country. And who’s to say the Pacific at the hands of big state Abe, is not back already to 1939 waiting for its next Pearl Harbour? Hell, the ships already are on the way.

Could all of this have been avoided? Yes, by having fostered a classical liberal, individualist, based ethic, of the society that set about only protecting the rights of its smallest minority, the individual; and that ennobled the voluntary contract and the voluntary trade, rather than the big gun of state running every damned thing. Instead welfarism has become so pervasive, that well-spring of the arts, creativity, and innovation in business, individualism, is now confused by generation airhead with a selfishness that must be erased under state redistribution.

It's always about philosophy, and it’s the ideas in Fran’s mind that are the cause of all this. I’d buy Fran lunch at any winery in Marlborough, but she must not mention the state once as the solution for anything other than the means to enforce a contract, or police my personal safety.

Statism vesus freedom.

We were the free West, once; we almost had it, but look where we went instead: what were we thinking? …. Sorry, I’ve covered this already; we weren’t thinking at all, were we - that was the problem.

Right, I'm taking Daisy Dog kayaking. From pretty soon, I'm onto sixty and seventy hour working weeks, until the end of March, so until April blog entries will be thin on the ground.

Footnote: I meant to work in this important piece on Greece versus Latvia, but ran out of time. Recommended reading regardless: Latvia Gives Greece a Lesson in Austerity.