Paying taxes makes us citizens. Living and voting together, citizenship means belonging to the community that decides how much tax to levy and how to spend it. Most people can't avoid PAYE and they are rightly outraged by those who go to great lengths to avoid paying their fair share. There's likely to be greater indignation about avoiders in times when public spending will be pinched tight and taxes rise to pay for this great calamity. Her Majesty's Revenue & Customs can't know how much tax companies avoid, but the department's estimates rise as high as £13.7bn.
On Monday the Guardian reports on its investigation which reveals corporate tax avoidance on a gargantuan scale. Respectable FTSE 100 companies, household brands that are cornerstones of Britishness, have for years deprived British citizens of potentially billions - all done legally by battalions of super-accountants and lawyers.
As company wealth ballooned during the boom, the money going into Treasury coffers should have grown proportionately. But between 2000 and 2007 the proportion of tax paid by top companies fell. Where did it go? The very clever people who devised fiendish debt devices that blew up the banks also applied their brains to byzantine new tax avoidance strategies.
Delving into the truth of company taxes has taken the Guardian team months of digging, talking to whistle-blowers, and following the knotted strings that lead through a labyrinth of subsidiaries in secretive tax havens. As the story of each famous company unfolds, keep your eye fixed on every twist and turn. You will go on a journey through the minds of people who have wasted their talents on making others pay for everything that makes Britain the safe, civilised, beautiful, enjoyable place where these company directors wish to live and bring up their families.
Public companies are anything but public about tax. Annual accounts are opaque, not obliged to spell out how much tax was paid where, or the tax-advantageous deals between their subsidiaries. But this we know: a third of FTSE 100 companies paid no tax in 2005-2006, and another third paid a minute proportion of their operating profits. Thanks to avoidance, HMRC says 12 of the UK's largest firms "extinguished all liabilities in 2005-2006". Scores more claimed tax losses. The area between tax dodging and reasonable offsetting - of pension contributions, research and development, preventing double taxation, new investment and legitimate reliefs - is the thick fog where lawyers and accountants make their millions. Between the spirit of tax law and its practice, fortunes are made.
As our lawyers point out, everything the Guardian's investigators have unearthed that looks to the naked eye like a breathtaking affront to ordinary PAYE payers is legal. Companies keep a step ahead of government attempts to close down one loophole after another. But next time the CBI and business leaders complain about Labour's tax "complexity", just ask them to explain in detail their own company's "tax planning" devices. Find out if they are into "the double Luxembourg" or "the Dutch sandwich".
How do they do it? Creative companies leave losses in the UK while piling profits into subsidiaries in tax havens. Some place famous British brand names or patents in tax-haven subsidiaries which then charge huge sums for their use, shrinking the apparent UK profits. They can officially move to low-tax countries while virtually none of their operations, let alone their top executives or directors, need be located in the Caymans, or suffer the boredom of Zug.
What could be done? The EU and the US united could effectively shut down havens and force them to reveal secretive accounts: if they refused to comply, all banking connections could be cut. (General De Gaulle once surrounded Monaco over tax fraud and cut off its water: it relented.)
There should be a common international tax regime with no loopholes, while still letting each country set its own rates. Start with transparency: make all companies consolidate their accounts to report which countries their profits arise from, where taxes are paid, and the precise dealings between subsidiaries. Barack Obama comes to power as architect of a 2007 attempt to close tax havens, with the US losing some $100bn. Angela Merkel is chasing tax evaders in Liechtenstein. Gordon Brown blocked all EU initiatives, but Alistair Darling has ordered a tax haven review. However, culture change starts with words and outrage, with naming and shaming, withdrawing peerages and knighthoods, refusing honours to any with dubious tax histories. Instead, governments woo business regardless of tax behaviour. Downing Street is the ever open ear, quaking at company threats to relocate.
Follow the golden thread through next week's maze of tax avoidance to glimpse the state of mind of those who run our great companies. If you thought you were by now immune to shock, think again. The justification is that "everyone does it", and even that it is a company's moral duty to save shareholders from standard tax. But shareholders are also taxpayers who have to shoulder the extra burden. Directors may pretend they use few public services, yet British companies rely on the British state to educate their staff, to create a safe, regulated and trustworthy business environment, to pay for roads, rail, clean air and food - and now, to bail out banks and businesses in trouble.
"Corporate social responsibility" becomes an oxymoron when top companies who avoid so much tax parade policy documents adorned with pictures of wind turbines, smiling black faces and laughing children labelled "sustainability", "diversity" and "community". Many do good charitable work; but what is the use of boasting that "We are a good corporate citizen", or "Our core values of honesty, integrity and respect for people are at the heart of how we manage our business", while going to grotesque lengths to push their tax responsibility on to the rest of the "community"? The way to prove they are the "good corporate citizen" they claim to be is by paying the modest 28% that is the starting rate for all companies. Maybe culture change won't happen until we get out there with saucepans to rattle and bang some shame into those inside corporate headquarters.