After Christmas I will be examining the UK’s role as a host to the super rich. It is our Wimbledon tendency, our willingness to invite in multi millionaire stars, business people and lucky inheritors of wealth to the UK who do not pay full UK taxes. They come enjoy our country, use our facilities, win some of the prizes.
Do you agree with it? Does it make us richer? Aren’t the jobs they create and the investments they make enriching the UK? Isn’t it just part of being a free society? Does it worry you that it raises the inequalities of wealth and income in our country? How much tax should we ask them to pay? Your thoughts would be appreciated.
December 24, 2011
I would like to link this to the revolution which has occurred in my own lifetime.
In 1950, there was no pill, women were mainly still mothers and wives. People had lots of children who lived in families with a Mum and a Dad. Men were expected to work, get the money, and support the women. The divorced, unmarried mothers, childless women, even spinsters, were outcasts. And we told quite a lot of sexist jokes too. We were, looking back on it, actually very repressed.
Nowadays, women and men are meant to be identical. Families are a matter of choice with equal rights for all. We have more or less stopped having children – there are more 60 year olds than teenagers now. It has been a silent revolution.
So where do the new people come from now there are no children? We have an open door policy to fill the gaps and it is working too. At the “bottom” of society, the immigrants are settling down as British. At the “top” the jet setters who live all round the world are settling here – in as much as people like that can settle – too.
England is still a nice place to live. It is cheap, relatively safe and we British are nice people to be with.
December 24, 2011
Many of the children come from immigrants who are willing to accept or find the harsh realities of a life with children softer than home. The very qualities that many businesses require in order to pay low wages and poor working conditions. Many have middle class attributes which also gives them the abilities to network and exploit the benefit system to its full potential. Which they do to give their children a better life.
Maybe they should work for less….?
December 24, 2011
You are just spouting drivel based on your own addled prejuidices.
Less than 1% of businesses want to pay the lowest wage possible or have poor working conditions. where companies do pay the minimum wage level its because the workers wages are eaten up in ENI and employment regulation costs. Learn some basic business skills Bazman.
The vast majority of business owners recognise that having a looked after and motivated work force is a key business need.
Oh and why don’t you tell us about how you started a business and employed people ?
December 24, 2011
Indeed everyone should give it a try if they think it is so easy to employ people and find the money to pay them.
December 24, 2011
libertarian it is you who don’t understand how businesses work. Do you really believe that those who perform menial tasks such as stacking shelves and flipping burgers are paid more than minimum wage or need to be motivated? Keeping wages low is one of the easiest way to increase profits.
Also employees don’t need to be motivated if they are either unlikely to find another jobs because they work in a specialist area or can be easily replaced because they work in a low skill job.
December 24, 2011
I currently own 8 businesses employing many many many people.
I know if I want a quality job I need to pay for quality staff. I also know that lots of businesses have to keep their costs low to make their products affordable and I also know, which you don’t, that the cost of hiring someone is far more than the minimum wage that is paid out to the workforce. ( i.e. the workers lose out due to tax and regulation costs)
You are deluded if you think there is any benefit in unmotivated staff
December 26, 2011
Employers prefer unmotivated but cheap staff rather than motivated but more expensive staff in order to keep their costs down. This is why so many unmotivated employees get hired.
December 26, 2011
How does that explain revolving door recruitment policies and low wages no matter how high the profits that are prevalent in many companies and corporations? There is no ‘revolving door recruitment policy’ and low wages are due to regulations eating the rate’? You will have to do betters than that…
I work for a very small company with an employer who pays the going rate and previously worked for part of a massive corporation which paid the rate too, so I do hear what you are saying. The large company was a company of wĀ£679%4&. I believe this is the correct management term. A top down command and control management system with a revolving door recruitment policy. Good pay-off from the parent company, but no thanks to the wĀ£679%4&. The small company is for real. Who does the most work and who makes the most money?
December 24, 2011
One thing this planet definitely does not need is people having lots of children. The human population growing at the current rate is likely to trigger the next great extinction.
December 26, 2011
“Nowadays, women and men are meant to be identical.” – Yes but only according to politicians and the mad people who work at the BBC and the Guardian. Not anyone who actually measures anything – where on average they are hugely different in almost everything measurable from height, longevity, weight, strength, ability at chess, motivations, linguistic abilities, sexual attractions, ………
They are of course honed by evolution to be very, very different from men (on average) in almost every measurable respect but to be symbiotic with men. To pretend they are identical, by law, is absurd – but it makes money for lawyers and sounds “fair” for politicians.
December 24, 2011
Of course we should. Anyone paying in more than say Ā£50,000 in tax, especially if they use private schools and medicine and perhaps run a business or employ gardeners, cleaners, builders, shop keepers, garages. and the rest. Why on earth not? At least they are paying more in than they take out.
Anyway if they tax them much more many will either will not come or leave. Anyway the government will only waste the money if it get more. Lets have a Ā£50,000 tax cap for all and no inheritance tax.
Then all the worlds rich will know where is a good place to base themselves. Anyone paying in Ā£50K of tax PA should not have to even do a tax return. So saving all that accounting time, HMRC time and all those lawyers and accountants, adding up all those receipts and reading all those absurdly compex HMRC tax guidances.
December 24, 2011
The very people who hire people shouldn’t have to pay taxes because that money is then taken out of the productive economy and just given to the parasites “the help” meaning me? So I actually depend on the graces and favours of a few for my livelihood? Oh really. If you have half a brain cell you know this is not true.
December 24, 2011
If I had one wish, in order to make the world a happier place, it would be to rid the world of the destructive, socialist, genes of envy and illogicality which so often destroys people from the inside and causes so much misery.
Anyway most of the rich would be more than happy to give it all away just to be ten years younger. You can only eat and drink so much, drive one car or live in one house at once after all.
Anyone born in the UK and health is very lucky and rich indeed in world terms.
December 24, 2011
If I had one wish it would be to rid the world of capitalist greed and have everyone in the country earn the same salary.
December 24, 2011
uanime5
Pray what do you suggest we all do for this equal salary.
Do you really think that many would still bother to risk their own savings and houses to run a business, to simply employ people who will then have exactly the same rewards, with no downside risk at all.
December 24, 2011
@uanime5
If I had one wish it would be to rid the world of capitalist greed and have everyone in the country earn the same salary.
How would you motivate people to get out of bed in the morning?
December 24, 2011
Why would anyone bother to do anything in your fantasy world?
December 24, 2011
Just like communist Russia or Cuba you mean?
So brain surgeons, shelf stackers, teachers, premiership footballers, investment analysts, policemen, airline pilots, coal miners and burger chefs should all earn Ā£6.80 per hour yeh that would work.
December 25, 2011
Uanime5,
We would probably not have bothered to invent the wheel….but money isn’t everything, As lifelogic said, what would you give for ten years more of good health? Now, if you have a computer and broadband access, the world is your oyster.
zorro
December 26, 2011
Lifelogic the ‘fantasy’ where this works is every Scandinavian country. Despite everyone earning the same salary they don’t have a problem motivating people.
December 26, 2011
Russia under the communists was a very good place for academic research or drinking vodka for this very reason. LOL!
December 25, 2011
You are only rich if you know that you have what you need, rather than needing what you want.
zorro
December 26, 2011
“I want what’s coming to me” / “What’s coming to you, man?” / “The world, chico, and everything in it” (Tony & Manny)
“All I have in this world is my balls and my word and I don’t break them for no one.” (Tony to Sosa)
December 24, 2011
How people are taxed in this or any other country should never be selective. The right way to achieve what you suggest is to make taxes lower, scrap exemptions and loopholes, reduce the burden of public expenditure and create incentives for enterprise and inward investment.
December 24, 2011
I would not be selective the Ā£50K cap should be for all.
December 24, 2011
Tax consumption expensive cars, boats and similar if you must tax more.
December 24, 2011
If we’re capping the amount of tax you have to pay why not cap salaries at Ā£150,000 per year.
Also inheritance tax is needed to prevent families accumulating wealth that they haven’t earned. Nothing good comes from those who haven’t earned their wealth.
December 24, 2011
uanime5
Nothing good comes from those who havenāt earned their wealth.
What about those who have never earned anything?
December 24, 2011
Ok so you are a communist and you don’t believe in free markets, fair enough. Everywhere its been tried it has failed but you can keep on dreaming about trying again.
Even as Lenin found out in 1921 when he ordered a relaxation to allow profit making companies to exist in communist Soviet Union the point is that money is NOT a zero sum game. If no one can accumulate wealth then economies can’t expand or innovate through growth. A government can only spend what it raises from taxes or borrows on the international money markets so how much tax money would be raised if everyone earned the basic wage? If no profits accrued and no wealth was made who and how would you invest in new innovations? It was precisley these limitations which did for all the communist countries that tried this .
You just don’t seem to understand that money has no value unless you spend it and as soon as you do that you create jobs, tax income and expansion so it doesn’t matter who is paid more than you or why as long as they aren’t being paid by the state as it benefits you in the long run.
I think you just have a jealous streak as you ignore the 4.2 million small business owners in this country to carp on about the dozen or so layabouts who inherited their wealth, I say so what
December 26, 2011
Given that until there were strict regulations the free market was made of monopolies and carte’s it’s impossible to believe in the free market.
If you read my post it would be clear that I oppose families accumulating wealth by inheriting it rather than earning it.
Money obtained by taxes can also be used to create jobs and be invested in the economy, so there’s no problem in being paid by the state.
Please explain what the 4.2 million small business owners who earn their money have to do with the super-rich who inherit their money?
December 26, 2011
Those who inherit their money have a useful role in encouraging their parents to create it and leave it to them. Also unless they are completely useless (as I admit some are) they should have picked up some common sense from their parents and will invest the money far better than the state ever would.
This is rarely a difficult task.
December 25, 2011
Uanime5,
But families acquire wealth to support each other. What exceptional right do you have to tax that money at death when it will already have been taxed during that person’s life.
What you really want is the increased confiscation of the fruits of someone’s labour. How does this encourage the creation of wealth?
zorro
December 26, 2011
Hoarding wealth doesn’t encourage the creation of wealth, it prevents it. By taxing people heavily after death we encourage them to spend their wealth during their life.
December 26, 2011
People tend to put money in banks or companies for investment purposes rather than hoarding it under carpets……We are not ‘kulaks’ now….
Zorro
December 26, 2011
You encourage them to waste it during their lifetime rather than passing it on to the next generation.
December 26, 2011
By “hoarding wealth” you actually mean “investing it to grow” and thus benefiting all” that is actually the best way of “hoarding” it.
December 24, 2011
The are far too many restrictions on our way to the communist Euro state. freedom of the individual is what we should be about.
December 24, 2011
Being free to ram minimum wage rates for skilled work would be the greatest freedom.
December 24, 2011
Only unemployment means people would compete for minimum wage jobs. Abolish unemployment you go a long, long way to abolishing poverty.
And unemployment could be abolished in about ten minutes, but don’t look to any mainstream parties for this. Both of them have tolerated millions unemployed for more than 40 years. Despite all the words, they will not seriously address this.
December 24, 2011
Unemployment is really just buying votes with others money and I am not even sure it does that in the long term.
December 24, 2011
“Unemployment could be abolished in 10 minutes” Please do tell us how?
December 24, 2011
Stop paying them to be unemployed.
December 24, 2011
What do you mean “ram” minimum wage rates?
Minimum wage is a joke, its a political fob, its a stupid idea that means nothing. No one in their right mind should work for Ā£6.80 an hour in London.
If the workers want to earn good money why work for someone else, thats just lazy self inflicted wage slavery.
December 26, 2011
Difficult to earn a decent wage self employed as you well know. It is OK to play it from both ends as both realities exist at the same time.
December 24, 2011
The super rich should not enjoy special tax breaks. The aim should be to attract people to the UK because it is a very low tax area for everybody. Flat rate tax at a small fraction of what it is now, coupled with a massive reduction in indirect taxes and a huge program of repealing regulation on business would attract rich and talented people to invest and spend here. It would also be a huge benefit to everybody already here. Government intrusion would be reduced, government spending would be slashed and we would be a richer and happier country that was not reliant on bailouts and handouts.
December 24, 2011
How would infrastructure be paid for under a flat tax scheme as not enough taxes would be taken. Toll roads etc? Or would we become a third world island reliant on the whims of the super rich?
December 24, 2011
All the railways, canals, bridges hospitals and schools in this country built prior to the mid 20th century where built privately. Seemed to work quite well.
Rail should be self financing as can be schools, universities and hospitals as large numbers of these are built privately and by charities in the UK.
Roads are the only issue and a flat tax scheme can easily raise enough money to pay. At the moment we collect far more tax directly via road fund licences, MOT’s and fuel taxes than is actually spent on roads
December 26, 2011
Can you name any first world country where this works. Privatising education and healthcare just means that those who can’t afford to pay have to go without. Resulting in the UK becoming like the USA, except with more uneducated people.
Also if you want rail to be self-financing expect ticket prices to dramatically rise as the cost is passed onto consumers.
December 26, 2011
Fantasy. Time has moved on and so has expectations from individuals and businesses.
December 24, 2011
The rich do not create jobs. Lots of normal people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people, normal people with money in their pockets is what keeps everything going. The equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning.
When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.
Taxes make absolutely no difference in the hiring equation. In fact, paying taxes means you are already making money, which means you have already hired the right number of people. You would not hire more to read the paper. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don’t even calculate your taxes until well after the hiring decision has been made. You don’t lay people off to “cover” your taxes. Even if you did lay people off to “cover’ taxes it would lower your costs and you would have more profit, which means you would have more taxes… except that laying someone off when you had demand would cause you to have less revenue. Ram it.
December 24, 2011
“…In fact, paying taxes means you are already making money, which means you have already hired the right number of people…”
Have you every run a company and employed people?
I think you should stop theorizing nonsense and try and understand the real world
December 24, 2011
Andy
Correct people on the minimum wage pay taxes, I do not think they think they have it made !
December 24, 2011
“The rich do not create jobs” how on earth do you work that one out.
If they: build a big house, have the garden maintained, send the kids to private school, buy two cars, have a cleaner and a nanny and pay for grannies old peoples home and nursing care and take several holidays?
How many jobs is that?
December 26, 2011
Building the house: very rarely occurs as the best locations already have big houses.
Garden: 1-2 gardening jobs.
Private School: none as private schools are over-subscribed. Thus even if the super-rich foreigners didn’t send their child to this school another child would take their place.
If you means a private school full of super-rich pupils then without the rich this school would still exist, it would just be full of local pupils. So no loss of jobs.
Buy 2 cars: none, extra staff are not require to sell 2 cars.
Cleaner and nanny: 2 jobs.
Pay for grannies old peoples home: the nursing home won’t need extra staff to look after 1 more person.
If you means a nursing home full of super-rich grannies then without the rich this nursing home would still exist, it would just be full of local grannies. So no loss of jobs.
Holidays: the airport doesn’t need extra staff to take them abroad. Also if they go abroad they won’t spend their money in this country.
So in total the super-rich foreigners have created 3-4 servant jobs. Not very useful to the economy.
December 26, 2011
Even 3/4 jobs is good but it is actually more.
December 24, 2011
Here speaks someone who has never founded, created, or worked at building and running a business. You are just spouting political rhetoric.
Who are all these rich people you go on about. Granted some BBC staff, film stars, sportspeople and investment bankers have huge salaries but the vast majority of wealthy people earned their money by risking everything and building businesses that employ people. They don’t stop doing that as soon as they reach a level of income, their businesses carry on growing and employing.
Your description of business taxes is seriously deluded nonsense. Taxes are levied before you’ve earned anything let alone made a profit. Also have you ever heard of VAT ? a tax that adds to cost of services and costs money to administer on behalf of the state and has to be paid quarterly? Profits where they occur are taxed 2 or 3 times, ( income tax on dividends, corporation tax)
Taxes make no difference in the hiring equation……ha ha ha ha that is so laughable.
So an extra 13% paid in tax for each new hire plus all the other regulatory costs means nothing? Oh also any idea what kind of things kick in when you hire your 6th employee or your 10th, no of course you haven’t because you’re a blowhard with absolutely no experience of the world of business and work.
Trade Unionists see the world of work as a battle ground between workers and management. Those of us that own and run businesses see it as no such thing. We recognise that our workforce is crucial to building successful businesses, by hiring skilled, talented and motivated staff at all levels they will provide a service to our customers that build a reputation for our business and therefore rewarding and caring for our workers is a key element of managing a successful business.
What happens is that due to one sided overbearing regulations workers who do not have the right attitude or ability are hard to get rid of. This has a detrimental affect on the 99% of workers who are good, the cost of employment in taxes, rates and regulations prevents more people being employed/more wages being paid.
It really is very simple.
December 24, 2011
“the vast majority of wealthy people earned their money by risking everything and building businesses that employ people.”
The vast majority of wealthy people went to private schools, top universities, and got high paid jobs due to their parent’s connections.
The vast majority of entrepreneurs came from poorer backgrounds and tried to make money by running their own business. Though unless they were reckless they never risked everything.
“What happens is that due to one sided overbearing regulations workers who do not have the right attitude or ability are hard to get rid of. ”
Usually the regulations prevent people being fired because they’re sick, pregnant, or won’t be bullied into working overtime.
December 26, 2011
If a workforce is producing massive profits for a company do you not think they are entitled to some share in this wealth or is it all the managements and shareholders idea so they are entitled to nothing but the wage that can be got away with. Ram it.
December 28, 2011
Any chance of an answer to this fundamental question libertarian? Or any other of you right wing dreamers?
December 24, 2011
Total rubbish.
You think overseas companies come here, hire people, then invest before they calculate their likely taxes payable here? You think these people are really that stupid?? Even in Gordon Brown world you suck people into particular activities under a false tax premise and then clobber them. You are perhaps living in an even more naive world than Gordon Brown world.
December 24, 2011
You pay tax even if you are making a loss vat, council tax, stamp duty, VED, employers NI, landfill tax, filing fees and countless others plus all the regulation costs.
December 24, 2011
I don’t think taxation is a major factor for the very rich. Where else would they go? In London everyone speaks English and the rule of law applies. Perhaps they would prefer the home of Chauvism, Paris. The taxes are just as high and the people understand English but don’t want to oblige foreigners by speaking it.
I do think however, that they should pay all relevant taxes, including stamp duty on house purchases.
December 24, 2011
They do pay stamp duty in the main at up to 5%.
Other places to go.
Switzerland with a deal, Monaco, Ireland (as non Irish domicile), Channel Islands, IoM, Gibraltar, BV islands, Andora, Grand Cayman ……… and all the other many very pleasant tax havens around the world.
The UK should join them all.
December 24, 2011
Maybe not.
Stamp Duty.
http://www.taxresearch.org.uk/Blog/2011/05/03/please-dont-tell-me-the-wealthy-dont-abuse-tax/
Council Tax
http://www.taxresearch.org.uk/Blog/?s=one+hyde+park&searchsubmit=
December 25, 2011
Sm – The fact that you cite Richard Murphy’s laughably clueless blog as a reference shows your naivety. Tim Worstall has an almost full-time job fisking the utter nonsense Murph comes out with…
December 25, 2011
Play the ball not the man!
RM happens to be highly-qualified in his field of expertise and his expertise is sought and paid for willingly. I do not agree with everything he says but i am open minded enough to listen, register facts on the ground and make my own mind up.
Meanwhile please add more substance.
December 26, 2011
You still pay stamp duty when the company first buys it and when the company sells it. True the company can change hand but only really between two non doms so this is not that common in practice.
December 29, 2011
Agreed the (avoidance vehicle) company will have pay some duty initially
You say ‘the company can change hands between 2 non doms so its not that common in practice’
How would you know the true details of the controlling interest the seller or buyer? How do you know its not common practice? Think MP expenses?
This where a general principle on tax avoidance is required to be embedded in our tax system and laws, except where it has been specifically intended by parliament.
(Less wriggle room left would help transparency and avoid powerful interests lobbying for changes which seem innocuous)
That would still leave House of Lords per diems as nontaxable and no doubt some notable plenty others.
December 26, 2011
That will explain all the rich non doms leaving London and the house prices plummeting. They’re not?!
December 26, 2011
No they are not in central London as they have not over taxes non doms yet but they are getting close.
December 24, 2011
“Arenāt the jobs they create and the investments they make enriching the UK?”
—————————-
This is the crucial aspect for me. IF they are investing in the UK, creating jobs here and contributing to our society, they should be made welcome.
However, we should differentiate between them and others who are simply using the UK as a convenient and safe base, avoiding paying tax here whilst investing overseas. We need to create a link for wealthy foreigners between investing here and getting the tax advantages. If there is no UK investment, then the tax advantages shouldn’t apply.
The wealthiest top in British society have become completely detatched from the lives of ordinary people – let alone the poor and those at the bottom of the pile. That isn’t a healthy condition for a society and we should be looking for ways to reduce the gap.
December 24, 2011
Does anybody know anything about this ? Do watch this clip, it is truly horrifying about the way the EU is developing, but I do not know how reliable the information is.
http://www.youtube.com/watch?v=EPcWHBPYOSU
December 24, 2011
I want a system where income tax and NI are merged into a single payment, levied at a standard rate on all earnings above a given threshold and that threshold to be no lower than the average national wage.
I want a system where all personal income income derived from whatever source, be it national, or international, is taxed at a standard rate not exceeding 15%.
I want a system where local authorities receive a minimum 90% of their income from local taxes and with the exception of national security are responsible for controlling all “state expenditure” within their area.
I want a fairer system where the more an individual earns the more tax they pay, based on a single rate payable by all.
I want a system where Corporation Tax is levied at the same rate as Income Tax.
I want a system where corporate bodies receive zero tax allowance against expenditure.
I want VAT set at a max of 10%
I want a system where government is legally obliged to spend no more than it receives in tax, if necessary based on a mean figure derived from the 3 previous fiscal years.
Oh and another thing, we will need a new locally funded retraining body for “out of work accountants and tax collectors” and secure storage within HM Treasury for the newly reinstated and growing national gold reserves.
December 24, 2011
Sounds good to me John M. As I have posted here and elsewhere over the years the state should not be taking any more than 30% as an absolute maximum. It should be enshrined in laws that are almost impossible to overturn. It could be done over the course of 3 parliaments as well, it just needs the political will to do it and MOST importantly getting the message across of what the benefits will be to society as a whole. The only “loosers” would be the recipients of overly generous state handouts or the “UNDESERVING POOR”!
Daedalus
December 24, 2011
In other words you’re blaming the unemployed for the lack of jobs created in the private sector.
December 25, 2011
Er, no! Having been unemployed since May 2009 apart from some short term contracts and only in the last 3 months back with a permanent job (on Ā£20K less than I was on in 2009) I have no issue with the genuinely unemployed. Its the benefits scroungers, those that have made a life style choice to remain on benefits that I call the “UNDESERVING POOR”
And if you bother to read JM’s and my main comments you will see that this is a way to increase employment many times faster than Jonah Brown did when he used private sector pension funds to create so many extra non productive public sector jobs.
December 26, 2011
I find that those who use the term ‘undeserving poor’ mean anyone who is unemployed for a long period of time; irrespective of whether they’ve tried to find a job or not.
As long as there are 2.46 million people unemployed and 455,000 jobs available over 2 million people will be unemployed. It’s not their fault that their lifestyle involving living on benefits for long periods of time and the fact you’ve decided to call them the ‘undeserving poor’ doesn’t make it right to condemn them.
December 26, 2011
Got any problem with the undeserving rich?
December 24, 2011
Well John M, as it’s Christmas….
Seriously, I pretty much agree with all of this most especially tax honesty by merging Income tax, employee’s NI and employer’s NI so employed people can see just how much money the government takes from even modest salaries. And that’s before the secondary filching takes place.
December 24, 2011
Most pay checks tell you how much is deducted due to taxes. Bank statements also tell you how much you get paid each month.
December 24, 2011
You need to rethink. I would argue for the reverse. Your ideas would result in enormous consumption and absolutely zero investment, which is the reverse of what we need.
“I want a system where Corporation Tax is levied at the same rate as Income Tax.”
So there would be no incentive for Companies to retain profit for future investment? It would all be pulled out in dividends or bonuses. Is that good?
“I want a system where corporate bodies receive zero tax allowance against expenditure.”
Companies would never grow if capital expenditure couldn’t be written down albeit slowly. Infact there is a good argument for being able to write down all capital expenditure and inventory growth in the year of expenditure, as it enables a Company to hire more labour with the tax saved to work the machine or sell the excess inventory, the cost of which has eaten into gross profits.
Are you arguing for us to be even less competitive than we already are?
December 24, 2011
My view is that for personal taxation we need a flat tax with no allowances, for reasons you have given it is more complicated with corporation tax. The low and simple theme should remain with R&D and capital expenditure certainly being deductible. Companies will plough profits back regardless if they see growth.
A low tax rate regime will encourage the super rich, Brits too, to pay taxes here, with some repatriation from offshore. The short answer is yes we want the high rollers but there has to be a level playing field for all i.e. these are the rules – take them or stay a tourist.
December 24, 2011
I want a system where corporate bodies receive zero tax allowance against expenditure.
Why?
December 24, 2011
Without free movement of people you cannot be said to have a free society, that alone is reason enough for us to allow them to come here. Pragmatically speaking, however much the socialists and fascist egalitarians might complain, the rich coming here makes us richer as well as increasing tax-takes for the government and is a win-win situation. I have no worries at all about wealth inequality, for someone to be wealthier than I am does not make me less wealth or reduce my enjoyment of life in anyway – and crucially the free-market system which has certainly made everyone in this country much ricer, cannot be preserved along side a system that actively redistributes wealth to create homogenity of wealth.
As far as tax goes, I think they should pay the same tax rate as everyone else – which would be best allowed for with a simple flat tax on incomes alongside a simple flat tax on corporate profit, both being greatly lower than at present with a reasonable threshold in place.
December 24, 2011
If it makes us money the default position is that I am in favour of it.t level of tax would attract maximum income is a technical question I am not competent to express an opinion on, except to say that idealogues who say squeeze them till the pips squeak are certainly wrong.
I do not believe that anybody lives here purely to avoid taxes. Nor do they do it for the weather. There are better places for both. So if we attract people we must, still, be an atractive and civilised society, at least by the standards of the alternatives, which is something to be proud of.
December 24, 2011
We need to be more selective. Among those who come are people whose wealth is ill-gotten, or who are associated with unpleasant regimes – should we really have hosted Saif Gaddafi, or an oligarch whose wealth was founded on murder and extortion?
Others come shopping for businesses they can export lock, stock and barrel to hollow out our own economy and benefit their home one. Perhaps they wouldn’t come if we didn’t make it easy for them by hobbling the competitiveness of our own industry with expensive energy and excessive regulation.
Many treat London property as a game of spoof played via offshore holding companies. The money fed into property is speculative, and damages our own market: it is treated as a store of wealth because banks are not trusted. At least when this bubble finally bursts it will be the foreign buyers (who now account for over half of all London purchases) who will suffer the largest consequences.
Being super-rich is no guarantee of making a positive contribution to the economy. Those who do make a positive contribution are certainly welcome. The Swiss used to negotiate with rich foreigners on how much they were going to contribute before they would be permitted a villa in Gstaad or St Moritz. Perhaps we should do likewise.
December 24, 2011
Well, we know the argument you want to crystallise, and the reasoning.
So it goes. Low taxes plus low regulation creates the conditions for a market economy to flourish. Ergo, we all benefit.
Unfortunately, bankers have buggered up this neat schema. Banking is obviously an absolute essential for the formation of capital for enterprise. But when it becomes an end in itself, as in when it is speculative punt predicated on ridicilous levels of leverage with the risk taken by the taxpayer, then regulation is imperative.
Well, bugger bonuses, bugger banks, and bugger the rich. The UK needs a properly regulated banking sector to perform its original essential role of investing in the real economy, supporting enterprise, selling more clever widgets abroad than we import, creating high-skilled jobs so we can tell Brussels – and here I join with you, John – to bugger off.
December 24, 2011
Low regulation may cause the economy to flourish but it usually does not benefit everyone. Fewer employee rights do not benefit employees, fewer hygiene rules lead to more cases of food poisoning, fewer regulations on buildings lead to more unsafe buildings. I’d rather live in a better society with many regulations, than a dangerous one with fewer regulations.
December 26, 2011
“Fewer employee rights do not benefit employees” – of course they do they result in far more jobs for them.
December 24, 2011
The banks operating under a condition knowing that it was the taxpayer who would take the hit when their risks went wrong was not an example of free-market capitalism – it was an awful example of corporatism in which big businesses are given privilige by the state. Also, the ‘crash’ would not have happened without the implicit (and thanks to labours’ FSA guarantee on despositors cash, explicit) government message that any bank that went bust would be bailed out – what the government should have done is supported an orderly process of administration just as would happen when anyother firm in any other industry went bust, a case of allowing bids for individual assets and groups of assets from private individuals and firms and using the capital raised to honour the relevant banks’ commitments (money owed to depositors, creditors, staff, shareholders) to as full an extent as possible. However the government did not do this and it had long been known that the government would not do this in the event of a bank becoming insolvent, instead it rewarded failure by taking taxpayers’ money and giving it to the institutions that had acted in an overly risky way and those who had lent it money.
If the Government had made it clear that it would not bailout a bank in the event of insolvency (and I would strongly support parliament legislating to forbid this from happening) their would be incentives to manage risk at all levels:
the banks shareholders and bankers themselves would know that if they took risks too great then they may well end up losing the value of their investment in the former case and their jobs in the latter case; creditors and depositors would have to assess the risk of a finacial institution becoming insolvent as well as the yield/convenience of access of whatever financial product they were purchasing, be it current accounts, bonds, derivatives or direct debt.
A banking system with only regulations to stop fraud and encourage transparency instead of dictating operating conditions – in order to stop barriers to entry and encourage real competition – and that had no bailouts promised by government would see free-market forces very strongly discouraging excessive risk, there would never be collapses of the sort seen in 2008/2009 and there would be no transferral of liabilities onto the taxpayer. More government interference however, will only exacerbate the current problems.
For the record, this is something leftists don’t like to admit, but the strongest lobbyists for banking regulation and, in particular, higher capital requirements are the big banks because of the fact that these things create barriers to entry and reinforce their near-monopoly.
December 24, 2011
I think you need to examine the character of such persons, not just their wealth.
December 24, 2011
Yes. They do contribute to the economy as employers, as purchasers of VATable goods and services and as patrons of the arts. I suspect they are important to the economy of London.
There are, however, odd loopholes which have come to light, such as on property purchases, which are not justified. Some of the other tax breaks I read about seem excessive.
December 24, 2011
I think the UK should get as many of the super rich elite as it can get, but it should be subject to a flat tax rate of 20% and a non-taxable allowance of Ā£12,500. We desperately need the minimum wage, employment laws (unfair dismissal etc.) and paid holidays gone and foreign investment into new industries. We need to get rid of tax credits as well, which would free up Ā£30 billion. Cheap skilled labour and a optimistic Britain needs to come back, with a Thatcherite Tory Government back behind the wheel of Britain’s economy.
December 24, 2011
If you remove minimum wage, employment laws (unfair dismissal etc.), and paid holidays expect motivation to drop and more people to choose to remain unemployed. Germany has done the opposite of what you suggest and they have the strongest economy in the EU.
Tax credits are paid to those on low wages to encourage them to work for a low wage. Removing tax credits will result in fewer people working.
Cheap skilled labour is a contradiction in terms. If you want skilled labour you have to be prepared to pay extra for it. If you want a lot of skilled labour then you’ll need to pay even more to attract unskilled people who you can train.
December 24, 2011
Well in StevenL’s Britain there would be a land tax, and wealthy Chinese folk who bought flats in plush parts of West London would be liable for it, as would the Duke of Westminster, and for that matter the Saxe Coburgs.
My observation is that if you happen own a property where lots of rich folk decide to move in you cash in on them tax free. If you happen to work and rent in an area where there are lots of rich folk the cost of housing has become completely untennable.
There are some places now where you either need to be rich, have bought a house no later than 1997 or on benefits to be able to live without lying about your income to lettings agents, sub-letting in breach of contract, couch surfing, sharing dorm rooms etc.
But it’s not worth bothering about as the tories only care about home-owners and labour about welfare recipients. As soon as the right employment opportunity avails itself I’ll move back to a poor area thank you.
December 24, 2011
The aim should be to encourage as many wealthy companies and individuals we can to our country.
They will spend their money here on hotels stays, or home rentals, entertainment, restaurants, transport and shopping, just to name a few.
All their spending will generate VAT and employment.
Either we want a nation where there are more millionaires or we want a nation where there are none.
If you really want to reduce poverty and unemployment then you will find it more difficult if you do not compete in a rapidly shrinking competitive world economy and encourage the worlds wealthiest individuals and companies to come here and stay here.
December 24, 2011
Attracting wealthy individuals hasn’t worked too well for most third world countries. Tourism is a very fickle industry.
This nations would be better if there were no millionaires as it would make everything more affordable for those who are not millionaires.
Why should we only focus on attracting wealthy companies? Any company should be welcomed if it created jobs.
December 25, 2011
Perhaps Cuba with all its marvellous equality of incomes and personal freedom would be the ideal nation for you to move to in 2012.
No millionaires there to annoy you, except the Castro family of course.
December 26, 2011
I prefer Sweden, where everyone earns the same salary and there’s no mega rich who do whatever they want.
December 26, 2011
You plainly don’t know much about Sweden.
To state that in Sweden, “everyone earns the same salary” is completely wrong.
Saying that in Sweden, “there is no mega rich” is also wrong
and your comment that the rich “do whatever they want” is as ridiculous as it is meaningless.
I feel you have a right to your views, different as they are to mine, but try to present a decent logical argument which makes sense.
December 26, 2011
Just in case you want proof that what you say about Sweden is completely wrong:-
http://www.rrojasdatabank.info/inequality/SSRN-id790345.pdf
and;-
http://www.rich-bastards.com/Country-Sweden.htm
December 24, 2011
I agree.
On the issue of “inequality” which your junior partners in the coalition are fixated on, it may be worth quoting from Churchill’s Great Contemporaries; “…whether it is better to have equality at the price of poverty, or well-being at the price of inequality.” The “…disposition to hunt down rich men as if they were noxious beasts. It is a very attractive sport, and once it gets started quite a lot of people everywhere are found ready to join in the chase” is another quote worth noting for those who may consider coming to Britain and investing some of their wealth here.
December 24, 2011
So long as people have food, water and can heat and have a home and have some health care why on earth should we worry about “inequality”. It just makes everyone worse off in the long run.
December 24, 2011
Yes they are welcome. We should do tax deals to get rich people to come here like Switzerland. Look at their GDP per capita and State / GDP ratios. Much better than ours.
An off-topic question: this scheme for the ECB to led ā¬500bn to European banks and for govts to force banks to hold Euro Sovereign debt is just a ruse to get round the no-central bank bail-out of Govt rule isn’t it – i.e. M. Sarkozy has got his way and the ECB will de facto print money to bail out insolvent European govts? I’d be interested to hear whether this is your take on it also.
December 24, 2011
Exceedingly complex issue. Tax the wealth creators and risk them moving domicile or let the burden of tax to fall on the middle and poor classes? Far better to have a small government with a low tax economy and the issue becomes less of a pressing one.
Not very helpful in these days of Keynsian economies, but then why get tied up in the question of who might pay for the folly when the remedy is clear for all to see.
All government spending fuels the fire of a recession and at its extreme a depression so best to stop spending fast and avoid the consequences.
December 24, 2011
You do realise that wealth creators can create wealth even if they’re not in the UK. They do this by having their company create a ‘branch’ in the UK. Thus even if they don’t come to the UK they can create wealth here.
December 26, 2011
True we should encourage that too.
December 24, 2011
I’ve no objection to the rich, after all, in order to enjoy their riches they have to spend them and in spending them they provide employment somewhere along the line. And if they are in Britain, they are more likely to spend the money here than in other countries. Even if they are living here a a tax haven and paying minimal tax, this argument remains true as they will be spending far more than the average person and are unlikely to be a charge on the state.
The other way of looking at it to ask “Are they doing any harm?”, when the answer seems to be “Generally not, unless they are criminals on the run from their own countries”.
The far more important question is “Should we allow in the super-poor?”. Can we afford to allow asylum seekers, illegal immigrants, or indeed legal immigrants who cannot support themselves?
Poor immigrants cost us billions each year, super-rich immigrants, even if they don’t pay all the tax that some people believe they should, cost us nothing.
I know which I prefer.
December 24, 2011
“Super Richness” of itself is neither good or bad, it just is.
What a super-rich person does is of concern to us all. Clearly if you have a super-lot of money you are in a position to make a big impact, for good or for ill, or some of both. So there needs to be rules and regulations that place a constraint on certain spending.
Money spent, say, setting up a foundation for medical research would likely be applauded rather than condemned. Money spent, say, building a golf course on land local people would rather keep for other purposes, especially if they don’t benefit from the golf course, is hardly likely to receive popular acclaim. Money spent, say, funding a political party is more difficult to call as some funding can be seen as reasonable but too much funding could be seen as buying unreasonable influence.
As to the gap between the rich and the poor, the emphasis should be on improving the poor rather than diminishing the rich. With the current definition of “poverty”, being defined as below a certain percentage of average income (or is it earnings), one way of taking many people out of poverty would be to reduce the income/earnings of the wealthy, as that will reduce the average. It does nothing to improve the quality of life for the poor, of course.
December 24, 2011
Unless you use the money from the rich to reduce the taxes the poor have to pay. Then the poor do benefit.
December 24, 2011
John, as to “host” the super rich, I take it you mean those super rich who are not UK Nationals but live some or all of their time in the UK.
I think we take too generous an approach to non nationals living in the UK in general, and this is irrespective of wealth. Nationals and foreigners should be treated differently, and obviously the difference should favour the nationals. Else what is the point of living in your own country?
Foreigners can and should be welcome long-term guests, given we have the means (in all senses) to accommodate them and their impact is at least neutral.
Foreign visitors are different, be they on holiday or for the duration of Wimbledon. Do we not expect all such people to be beneficial in one way or another? Are not winnings, no matter how large, but one piece of the cost/benefit analysis?
December 24, 2011
You can not ask for flat taxes if the rich are allowed to abuse their tax position.
No voter is ever going to accept a flat 30% tax rate if dire tots of FTSE companies are giving themselves pay rises an order of magnitude greater than the average person. Or if the super rich are allowed to stay in the UK and pay almost no tax.
December 24, 2011
The super rich aren’t the problem.
It’s the fact that there isn’t enough disparity between the idle and the striving classes and that the Left use the super rich as an excuse to redistribute the wealth of those who graft for it among those who don’t.
Happy Christmas to you and all of your readers.
E-K
December 24, 2011
Yes. Simple. We should want them to come and pay taxes here, or create businesses, investments and jobs here, rather than anywhere else.
The tax rate should be set which encourages the maximisation of this effect, ie it just has to be lower than anywhere else.
Economically its simple. Politically of course it will never work because in this country we are mostly economically illiterate, or brainwashed by vested interests.
However evidence is on our side. People can argue for socialism, or God, or miracles – but the argument will always be easier for those of us on the side of evidence.
December 24, 2011
The tax rate in Dubai is 0% so it will be difficult to beat this.
Evidence is not on your side that low taxes attract businesses as high taxes (63%) haven’t caused Denmark to be uncompetitive. Companies are prepared to pay a premium for skilled labour.
December 30, 2011
There is no economic reason why we couldn’t make our rate 0% as well. Would you rather Steve Jobs built ipads here, paid no tax but employed workers (who would pay tax so econonomically speaking Steve would be covering that tax) or built them in US or China when he would pay us true zero tax?
And yes we can’t beat zero but we can match it, only politics prevent that. Which taxes are 0% over there anyway? Whats their income tax, whats their sales tax, whats their corporate tax? I’d love to hear of a 0% tax utopia but I don’t believe in it. Its probably 0% corporate tax, right?
And Denmark… come on this is John Redwoods blog, not BBC Question Time or the Mirror. Just because Denmark is a relatively civilised and prosperous country does not mean it doesn’t have a competitive disadvantage to other countries – it does. China is much more competitive, Switzerland is much more competitive. Look at per capita GDP. I see a lot of people are now using Denmark as their example because their favourite poster boy Sweden has had to make far reaching free market reforms.
December 24, 2011
Oliver Wendell Holmes was of the opinion that taxes were the price of living in a civilised society. I agree with that sentiment in principle and so believe that everyone who lives or benefits from our society should contribute at an appropriate level.
What that level should be is a thorny issue but it should be treated as a technical issue, not one founded on envy, so I don’t believe taxes should be progressive or punitive. There should be a flat tax so those who earn more will naturally pay more taxes than those who earn less. There should also be proper enforcement against those who evade paying.
Non-nationals who come here to live and work definitely should contribute at least at the same level as nationals. If they don’t or if they go out of their way to avoid contributing then they should be made to leave. Perhaps we should also consider imposing the same constraints as Australia where a particular level of investment and taxed income is required before someone is allowed residence. Perhaps we could also broaden the notion of contribution as money isn’t the only way someone could benefit our society.
An associated question is what do you do with those nationals who enjoy the benefits of our society but won’t contribute through taxes or other means, Ian Duncan Smith is at least trying to find practical ways to address the deplorable situation that the socialists allowed to fester.
December 24, 2011
Yes we should host the super rich and we should be fair,honest,reasonable and equitable in our dealings and REQUIRE same in return.
I believe it is fair to tax based on where the economic source of wealth or the substance of the transactions occurred or came from, that can be difficult to know when offshore is used.
We should tax all UK citizens or longterm residents on worldwide income and assets subject to any double tax arrangements with a third country. (I think the US does this). This would help compliance and help to ensure that some tax is paid in less tax sophisticated countries.
We should abolish the concept of domicile as it favours accidents of birth as a tax policy.
We should be aware of the problems of lack of transparency and secrecy when dealing with offhsore wealth and not compound them.
I am in favour of a flat tax (35%), with a living taxfree minimum allowance citizen income.
We would need a General anti-avoidance principle along with making all capital gains and income subject to the flat tax.
We need to cut loose from the EU and all waste, especially particularly if not wasted in the UK!
Merry Christmas and Peace to all.
December 24, 2011
I think we should certainly welcome the super rich and go out of our way to ensure that tax arrangements are as favourable as we can manage, because rich people are good for everyone living in the UK.
There’s an old saying – ” If you’re not a socalist by the time you’re 21 you’ve got no heart. If you’re still a socialist by the time you’re 30 you’ve got no head.”
As I’ve grown older I find myself wanting less government at every level. I want to see government spending massively reduced and for people at every level to be encouraged to take more responsibility for their lives and the community in which they live.
To Mike Stallard, I always value your contributions, but what you say about England does not apply to some of our big cities and towns, parts of which are increasingly unrecognisable as having anything to do with England.
A very Merry Christmas to everyone, and an especial thank you to John Redwood for providing such a wonderfully erudite, libertarian, stimulating blog from his own resources. May your blessings be many in 2012 John.
December 24, 2011
How exactly are the rich good for everyone in the UK?
December 24, 2011
“Does it make us richer?”
Not really. Unless the rich buy something very extravagant the amount they contribute to the UK’s Ā£150 trillion GDP will be minimal.
“Arenāt the jobs they create and the investments they make enriching the UK?”
How many jobs do they create? It would be interesting to have some figures regarding the average number of jobs super rich foreigners do create; especially if they’re categorised into servants (directly hired by the super rich), local services (indirectly benefit from the super rich), and business (new jobs created by the super rich).
For most super rich the only jobs they create are hiring staff to manage their homes and guard them. Very rarely do they create new businesses that employ people.
“Isnāt it just part of being a free society?”
Surely paying your taxes is also part of living in a free society.
“Does it worry you that it raises the inequalities of wealth and income in our country?”
Not really as the areas with the lowest salaries tend to have the cheapest housing. Though it can be problematic for people who live in an area where the cost of good and services suddenly increase due to an influx of the rich.
“How much tax should we ask them to pay?”
The same amount as everyone else. Being super rich doesn’t entitle you to a tax break.
December 25, 2011
Tell you what fella why don’t you identify by name one or two of these super rich that seem to upset your world so much ( not sure why as even if they didn’t pay a penny in tax it wouldn’t harm you in any way as they don’t use any of our resources either)
Then we can assess if you are right or wrong. But for starters Lakshmi Mittal is the richest person in the UK and second richest in Europe. He is Indian and owns ArcelorMittal which employs 236,000 people worldwide. There are currently 8 factories and plants in UK employing many 1000’s oh and he owns QPR too with 100 or so employees.
Your turn who is it you are jealous of?
December 25, 2011
If you spent anytime in Mayfair, Belgravia, Chelsea, Kensington, Knightsbridge like I do you would realise how utterly stupid your post is.
Do me favour and pop into one new restaurant called Novikov on Berkeley St Mayfair. It has over 200 employees. Look at who is ordering the drinks and the food – rich foreigners. Think about all the supply companies who depend on this business. My job for a start.
This is ONE EXAMPLE. People like you exemplify everything that is wrong with this country. I really do despair that so many people like you actually exsist. Wake up!!
December 24, 2011
The very rich control the government. (names various members of the this all powerful elite and thinks they had the power to stop Hitler-ed) Guderian’s tanks mysteriously stopped twelve miles short of Dunkirk. Goering’s attacks on Dowding’s airfields suddenly stopped just as they were about to smash Area 11’s resistance, while attacks on the RDF system were not pressed home.
If you want to challenge the power of the elites, you first have to understand exactly how powerful they are. Churchill spoke of a higher cabal orchestrating the war. These people are still with us.(Names left out as no evidence included-ed) Better to keep your friends close, but your enemies closer.
The key to disempowering the elites is to take away their power to issue money. But if you try, don’t expect a long life. Lincoln, JFK tried to do that. Better to be a Blair and a Cameron, and give them what they want. That way you live and get very rich.
December 25, 2011
I live in central London and work in the luxury Scotch whisky sector so for my industry they are fantastic for business.
Think about the money they generate through purchases in retail, bars & restaurants. Thats a lot of jobs they support. Think about the tax, they pay through stamp-duty & VAT.
It really is a no-brainer unless you are part of the BBC/Guardian chip on the shoulder leftie luvvie brigade.
John the real discussion should be around the parasites in the Public sector “diversity” & “equality” & Health/Safety, Human Rights, Welfare spongers, the EU and all the people dragging this country down which your useless spineless PM is doing nothing about!
December 25, 2011
I think there would be a problem if all the world’s wealthy wanted a house in London, to use for a few days a year, and they were prepared to buy, if necessary, in Catford or Neasden. If it ever comes to that, we could invent a special stamp duty for foreigners.
December 26, 2011
Should the UK host the super rich? Complex one that
There are a number of points
1 Only allow folk in from countries which allow Brits into their nation in reciprocal circumstances. This is a fairly basic stance we miss. We have far too many folk here from places which do not allow equivalent Brits into their country. We need to balance this out much more.
2 The rules which allow servants, and hangers on in, largely free of the norms of other immigration checks, need to be revised. It is silly to allow cooks, drivers, and so on in unrestricted when we have plenty such folk here who could do the job.
3 We need to be careful allowing in folk of any economic status from countries where corruption is endemic. We allow large numbers of folk in from cultures where corruption is the norm, where racism is routine, where the day to day rule breaking is accepted, and so on, and no surprise they bring their default behaviour in with them. We need a much harder think about how we approach this.
4 Indefinite leave to remain or British citizenship should be much harder to get even for the super rich. Being allowed into the country should not automatically on its own lead to settlement rights.
5 We need a joined up regulatory approach to deal with this. Immigration, tax, intellectual property, data protection, employment, all these rules and more need to be looked at in the round by one coordinated set of regulators as they apply to some of these people. We often have one arm of the state knowing that rules enforced by another arm are being broken but do nothing about it, this needs fixing.
On the whole I think we should welcome the super rich from an easily determined list of western countries, USA, Canada, New Zealand, Europe, etc. We should be a lot tougher and more careful on the super rich from another bunch of countries where corruption and bad practise is the norm. We need to be a lot less naĆÆve.
Super rich will be able to afford their own medical bills, and schooling for their children, so donāt let the British tax payer pick up the bills for these as they often do now. Donāt let them in without comprehensive medical insurance etc. Same for their support staff.
I move in funny circles and have personal experience of many foreign super rich here. Some examples:
1 Rich students from Arab states here for a few years of study and then often extended to a few gap years just having fun in the UK. Often bring in a large number of cooks, housekeepers, drivers, and so on, to look after them. Actually found them mostly a great benefit to the UK as temporary residents, although I wouldnāt allow the unrestricted entry of all their cooks, housekeepers, and drivers etc as we do now.
2 US rock stars and road crew here for a year to record an album or similar. On the whole positive benefit to the UK, and certainly lots of equivalent Brits with roadcrew do the same in the US so should be welcomed on the grounds of reciprocal benefits etc.
3 (Some overseas-ed) ābusiness leadersā running big outsourcing organisations. Seen these folk up close and personal. Sure they have the wealth. Should we be allowing them access to this country as we do now? Frankly no. They too often spend their time engaged in activities which are harmful to the UK, moving British intellectual property abroad (etc- repeats various allegations about the worst outsourcers that have been discussed before on this site-ed) We need to be a lot more switched on to what is going on here.
So itās all a bit more complex than a simple answer I am afraid.
December 26, 2011
Simply put, putting all the jealousy, political and moral arguments aside, encouraging rixj people into the UK may price locals out of expensive homes (which are way above most of our grades anyway) but it is always going to bring invisible benefits.
If they don’t pay full taxes they do so in other ways on the things they buy in –
Rich people don’t tend to do much of the mundane things themsleves – they employ services = jobs + taxes
They purchase expensive things = cars, gadgets, boats = jobs + more taxes
They dine out in expensive restaurants = jobs + VAT
Any property purchased or sold attracts stamp duty and VAT along the chain
There are probaably many more than the above examples, but you can’t get away from the fact, like them or loath them they provide stimulus to the economy so should always be made welcome – if they don’t pay full income taxes, you run the risk of scaring them away if things get tightened too much.