12 April 2012
In most United States jurisdictions politicians must publicly disclose their income and their tax declarations. Judges are in a similar position. Some have been tripped up. Presidential candidate Mitt Romney paid back-tax this year, apparently on becoming aware during campaigning that he had under-paid tax. Last year, Supreme Court Judge Clarence Thomas had a similar epiphany, learning that he had not declared five years of his spouse’s income.
The US Government gathers data on its employees and federal contractors who default on tax obligations. Reports earlier this year were that unpaid tax by current and retired employees amounted to $3.4 billion, and $7.7 billion was owed by contractors. The purpose of the Federal Employee Tax Accountability Act making its way through the House of Representatives is to make “serious delinquents” ineligible for government work. Some provisions relating to suppliers already exist.
This practice would not raise an eyebrow in Scandinavia. Everyone’s tax returns are available on line in Norway, Sweden and Finland.
By the end of last week, candidates seeking election to the London mayoralty were competing to be the most transparent about their tax obligations, after a critical media response to the initial reluctance of one of them. There is a prospect now that disclosing tax returns may become a requirement for UK parliamentary candidates. The Prime Minister, Deputy PM and the Chancellor are said to be sympathetic.  Spokesmen for all political parties seem to be advocating that candidates for public office must disclose their tax payments, if not all their income. Each year in Britain, about £13bn is lost through avoidance of personal tax liabilities.
New Zealand MPs are required to make returns to the registrar of pecuniary interests, but are not required at any point to disclose the value of those interests. That is a major difference from US practices where copies of declarations, with details, are published.
There is little likelihood that State servants – excepting perhaps chief executives – will be required to make similar disclosures. There is already the duty to be trustworthy; to comply with the standards of integrity and conduct.
Perhaps the expectation that State servants will… “avoid any activities, work or non work, that may harm the reputation of our organisation or of the State Services” and will … “act lawfully”, means not only that they will comply with the requirements of the Income Tax Act, but that they are also liable to discipline at work if they don’t.