Are pension funds necessarily tax avoidance?

I have been having a slightly heated debate with Richard Murphy on his blog.  Or rather, not on his blog, as he has deleted the salient comments.   He says the question is “neoliberal trolling”; I think it is a valid question.

To recap: 

Talking about Alliance Boots and the fact that there is a tax deduction for financing costs, Tim Worstall claimed that the interest would be taxed in the recipient’s hands: the implication being that there is therefore no avoidance.  That is, I think, the key issue under discussion.  Murphy replied that the interest would not be taxed as it might be moved offshore. 

“Portemat” said that in fact some Alliance Boots debt is held by UK pensions, to which Murphy replied that pension funds do not pay tax – the clear implication being that if tax is not paid then there is still a problem regardless of the reason.

I pointed out that that this is by design and so is hard to see as avoidance, to which Murphy then brought up arbitrage.  I have no idea why he considers that to be related to the issue under discussion (pension schemes not being taxable).  He then deleted my comment that I was talking about pensions not arbitrage, and has since then been a bit selective about what he lets through.

So essentially Murphy seems to have derailed a discussion because he has realised that his line of argument was not going anywhere.  He then deleted my comments, and started bandying round terms such as trite, nonsense, and demeaning, rather than address the previous thrust of the discussion.  To my mind this does not make him look as if he has a strong coherent argument.

My simple question I put to him, which he has refused to answer, was:

Going back to the core point of the discussion, then: if a pension fund lends money to a business, the business gets a tax deduction for the interest but the pension fund pays no tax on it.  Put simply: I consider this to be a reasonable position which is in line with Parliament’s intentions.  Do you?

I don’t know why he won’t answer this question.  I can only conclude that it is because if he says yes then he is a) agreeing with me and b) suggesting that maybe Boots isn’t so bad after all, and thus contradicting himself; and if he says no then he is adopting a rather extreme view that few people would agree with.  So he’s written himself into a corner.

I’m posting this mostly because I’m a bit peeved that he calls me a troll for asking a simple question, but refuses to engage in any sort of meaningful debate, so I’d like to call him on that.  He is of course not obliged to join any debates (or leave them visible) on his own blog, but then if he is going to be territorial about blog posts then so can I be 🙂

Also: if anyone can tell me what “neoliberal” means, I’d be interested to know what my political views apparently are.  I understand there is some sort of conspiracy involved, but no-one’s invited me to any meetings…

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2 thoughts on “Are pension funds necessarily tax avoidance?

  1. The meaning of the word “neoliberal” depends upon the context. For example, the phrase “You’re a neoliberal troll” translates into English as “You’re using evil, far-right concepts like ‘logic’ and ‘reason'”. The term “neoliberal economics” simply means “economics”.

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