Don't tax Amazon. Tax Amazon's shareholders

Corporations dodge tax. So go for their owners instead.

Tax avoidance is a problem which stubbornly refuses to be fixed. Even just defining our terms is problematic, with nearly every definition wide-ranging enough to cover all avoidance also including things which nobody finds objectionable.

And even if you could define it well, there's the fact that tax avoidance is, by its nature, legal. While some avoidance is truly, obviously, taking advantage of sloppy phrasing in statutes and judicial rulings, most of it exists in the grey area where it would be impossible to "tighten up" the law without also removing those deductions or exemptions which were supposed to be there in the first place. (For an example of this in action, look no further than the pasty tax debacle.)

The worst tax avoidance is undoubtedly in the corporate sector. While there are terrible examples of avoidance amongst individuals, like the New Yorker's examination of hedge-fund manager Julian Robertson's tax affairs, they are always hampered by the fact that actually offshoring personal income – the most effective form of avoidance, and the hardest to fight with the law – is tricky. People, after all, have a physical location. Some may become the infamous "non-doms", but to do that you have to spend half the year outside the country. That isn't something which can be achieved by just hiring a canny accountant.

While moralising can convince the worst corporate offenders to pay their fair share – as Starbucks finally agreed to do – it can't work every time. Some companies don't care about their image, others manage to hide their avoidance.

And so we come back to patching up the holes in the system. But with offshoring, some holes seem nearly unpatchable. For all the stirling work of campaigners like UK Uncut and Tax Research UK, the world is still no closer to agreeing on the best way to deal with multinationals which engage in creative "tax planning".

But there's one possibility: forget about them.

The reason why involves looking at the concept of tax incidence. If you accept that the only question of tax that matters is which people pay it, then corporation tax becomes a complicated issue. As a tax alters the bottom line of a company, one of two things will happen: either it will pass the costs on, or it won't. If it doesn't, then the actual people hit by the tax are the shareholders of the company, who see its profitability decline. (This is largely the intended outcome of campaigns against tax dodging.)

But if it does past the costs on, then either its customers and employees must bear the brunt, in the form of increased costs or decreased wages, or other businesses (such as suppliers or contractors) do, and the whole equation starts again.

(It is important to point out that the argument that all costs must be levied on a person at some point is not without its critics. After all, businesses have savings, assets, property and rights; who is to say that they can't be counted as people for the purpose of taxation? And the assumption at the heart of the argument is one which must be taken as faith. It's just as easy to argue, using the same logic, that the costs of all personal taxation must be borne at some point by businesses.)

Tax incidence varies business-to-business and over time. In the early 70s, when it was starting up in Washington state, Starbucks' tax incidence was almost certainly mostly upon its shareholders. Labour was expensive, coffee was a niche product, and investors in a small start-up were probably in for the long haul. Now that Starbucks has access to vast pools of low-wage labour and customers willing to pay up to $7 for a cup, it is far more likely that they will bear the brunt of much excess tax. (Although, of course, as John Elledge rightly points out, even then, it's not certain; and if there's anything we've learned from Lisa Pollack's investigation into the matter at the FT, it's that Starbucks' publicity machine holds a lot of sway within the company)

But here's the thing: if we want to tax just the shareholders of a company, we already have a way to do it. We tax dividends, and we tax capital gains. Increasing those taxes hits the people we hope would take the brunt of corporation taxes anyway.

So here's my proposal: scrap corporation tax, and whack up those two to make up the revenue gap.

There would be two big transfers inherent in this change: the first would be from shareholders in companies which pay little tax to shareholders in companies which pay a lot of tax. Since that's just another way to say "cracking down on tax avoidance", it need not upset us too much.

The other is more uncertain. By and large, international companies have international ownership. Those based in Britain with the majority of their shareholders overseas would be better off; those based overseas with the majority of their shareholders in Britain would be worse off. If the logic of the Conservatives, who have already cut corporation tax significantly, holds, we can expect that latter group to move headquarters here to take advantage of the rates; and if it doesn't, then we can expect the shareholders to sell up and buy into British companies.

There's a reason CGT and dividend taxes are so low, of course, which is to encourage investment. But since we would expect pre-tax shareholder income to go up, investment ought to still be compelling. It would just be targeted more effectively at companies which could actually make a profit, rather than those which could only make a profit if they were avoiding tax which their competitors were not.

If we can stop the biggest corporations avoiding tax, we ought to. But if trying to tax aggregations of people which can twist across country borders with ease is permanently difficult, perhaps we ought to stop trying it, and do something better instead.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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I can’t follow Marie Kondo's advice – even an empty Wotsits packet “sparks joy” in me

I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

I have been brooding lately on the Japanese tidying freak Marie Kondo. (I forgot her name so I typed “Japanese tidying freak” into Google, and it was a great help.) The “Japanese” bit is excusable in this context, and explains a bit, as I gather Japan is more on the case with the whole “being tidy” thing than Britain, but still.

Apart from telling us that we need to take an enormous amount of care, to the point where we perform origami when we fold our underpants, which is pretty much where she lost me, she advises us to throw away anything that does not, when you hold it, “spark joy”. Perhaps I have too much joy in my life. I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

After a while I gave up on this because I was getting a bit too happy with all the memories, so then I thought to myself, about her: “This is someone who isn’t getting laid enough,” and then I decided that was a crude and ungallant thought, and besides, who am I to wag the finger? At least if she invites someone to her bedroom no one is going to run screaming from it, as they would if I invited anyone to my boudoir. (Etym: from the French “bouder”, to sulk. How very apt in my case.) Marie Kondo – should bizarre circumstance ever conspire to bring her to the threshold – would run screaming from the Hovel before she’d even alighted the stairs from the front door.

I contemplate my bedroom. As I write, the cleaning lady is in it. To say that I have to spend half an hour cleaning out empty Wotsits packets, and indeed wotnot, before I let her in there should give you some idea of how shameful it has got. And even then I have to pay her to do so.

A girlfriend who used to be referred to often in these pages, though I think the term should be a rather less flippant one than “girlfriend”, managed to get round my natural messiness problem by inventing a game called “keep or chuck”.

She even made up a theme song for it, to the tune from the old Spiderman TV show. She would show me some object, which was not really rubbish, but usually a book (it may not surprise you to learn that it is the piles of books that cause most of the clutter here), and say, “Keep or chuck?” in the manner of a high-speed game show host. At one point I vacillated and so she then pointed at herself and said, “Keep or chuck?” I got the message.

These days the chances of a woman getting into the bedroom are remote. For one thing, you can’t just walk down the street and whistle for one much as one would hail a cab, although my daughter is often baffled by my ability to attract females, and suspects I have some kind of “mind ray”. Well, if I ever did it’s on the blink now, and not only that – right now, I’m not even particularly bothered that it’s on the blink. Because, for another thing, I would frankly not care to inflict myself upon anyone else at the moment.

It was all a bit of a giggle eight years ago, when I was wheeled out of the family home and left to my own devices. Of course, when I say “a bit of a giggle”, I mean “terrifying and miserable”, but I had rather fewer miles on the clock than I do now, and a man can, I think, get away with a little bit more scampish behaviour, and entertain a few more illusions about the future and his own plausibility as a character, when he is squarely in his mid-forties than when he is approaching, at speed, his middle fifties.

Death has rather a lot to do with it, I suppose. I had not actually seen, or touched, a dead body until I saw, and touched, my own father’s a few weeks ago. That’s what turns an abstract into a concrete reality. You finally put that to one side and gird up your loins – and then bloody David Bowie snuffs it, and you find yourself watching the videos for “Blackstar” and “Lazarus” over and over again, and reach the inescapable conclusion that death is not only incredibly unpleasant, it is also remorseless and very much nearer than you think.

And would you, dear reader, want to be involved with anyone who kept thinking along those lines? I mean, even if he learned how to fold his undercrackers into an upright cylinder, like a napkin at a fancy restaurant, before putting them in his drawer? When he doesn’t even have a drawer?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war