April 6, 2012 7:11 pm
Boris Johnson, the mayor of London, has published his tax returns for the past four years after relentless goading by his predecessor and now challenger, Ken Livingstone. It was a decision taken in the heat of battle after his Labour rival in next month’s mayoral election claimed that he had routed earnings through service companies.
This is symptomatic of a bad-tempered close election. But it could also have major implications for British politics, which have traditionally avoided the sort of intrusive personal scrutiny that characterises US elections. It may now be hard for anyone seeking high office not to disclose personal financial information.
There are many solid arguments against greater transparency. It risks shifting the focus of campaigns from policy to personality. Indeed, this is what has happened in London, where both candidates have been spending more time skirmishing than outlining their plans for the city’s future.
Then there is the question of where to draw the line. The London mayoralty is a personal election, but should anyone running for parliament be required to reveal his tax affairs? And what about their partners? Shifting certain types of income within a household is so easy that widening the net to include spouses appears to be the only solution to make this system work.
A third objection is whether demanding tax disclosures will discourage individuals from seeking public office. Outing tax evaders may be a good thing. But there is a risk of putting off people who have used legitimate tax planning and who still do not want to see these practices exposed in an unsympathetic press.
Yet again, tax disclosure in the US has not prevented candidates from entering the field. Mitt Romney, the frontrunner for the Republican nomination, bowed to pressure and did eventually release his tax returns.
The broader point is that moving to greater disclosure is almost inevitable given the recent rhetoric of the government. Allowing politicians to hide their tax affairs would sit oddly with Downing Street’s stated aim to be the “most open and transparent government in the world”. Since the chancellor of the exchequer, George Osborne, believes tax abuse to be “morally repugnant”, politicians should expect to face greater scrutiny.
There are ways to mitigate the unintended consequences of these new practices. Disclosure should be voluntary. Since not revealing one’s details will be seen as an attempt to hide something, there is little to gain from an excessively coercive regime.
Mr Johnson has long thirsted to make his mark on national politics. This week’s unexpected turn of events may do just that.
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