More evidence that the current tax system is a disaster

This morning's Guardian provided yet more proof that the current tax system is a disaster. Corporations and banks clearly invest enormous effort into coming up with more and more elaborate schemes to avoid paying the tax bills that are crippling the vast majority of citizens.

The article concerns a decision by the UK Treasury to rush through legislation to close two "aggressive" tax avoidance schemes that were being used by Barclays's bank to save £500 million in tax payments.

Here's how the article describes the techniques:

"One of the schemes being shut down allowed the bank to avoid paying corporation tax on the profit it makes from buying back its own debt.

The second scheme involves authorised investment funds where the bank aims to convert non-taxable income into an amount carrying a repayable tax credit to secure a repayment from the exchequer even though tax has not been paid."

It is precisely this sort of tax avoidance mechanism that would almost certainly be a thing of the past if we scrapped the current scheme and replaced it with an automatic Financial Transaction Tax.