Taxing the rich

Taxing the rich is extremely popular with the main political parties. It is based on two propositions. The rich have more money to tax. Taxing the rich is popular with many who are not rich. So what could go wrong?

Most of us agree the rich should pay more, and that income tax should go up with  income level. The problems come about because the very rich have more scope to decide where to live, where to work, and where to pay taxes. If a country overdoes its taxation of the rich, as France did recently, many of them go and live, work and earn somewhere else. The ones who stay employ better tax lawyers and accountants to minimise their bills.

Nor is heavy tax on  the rich  popular with everyone who is not rich. Some aspire to be richer later in life. Others are not jealous and see nothing wrong with people having more money if they are better footballers, singers, business people or whatever and earn more as a result.

Labour under Blair and Brown decided they needed more rich people in the UK, and needed more rich people to work, risk and venture. They decided to continue with the outgoing Conservatives 40% top rate of Income tax. They brought Capital Gains Tax down to a more  competitive 18%. They allowed Non Doms to come and live in the UK, paying full UK tax on all their earnings, savings and ventures in the UK but avoiding tax on assets and income they had elsewhere. This Labour system worked well, and the rich made a substantial contribution to tax revenues as a result.

The last days of Gordon Brown, followed by the Coalition, changed this approach. Mr Brown put Income tax up to 50%. Mr Osborne brought it back down to 45%, where more money is collected than at 50%.

CGT was put up by the Coalition to 28%, where it collects far less revenue than at 18% before the crash. This is despite share and property values now being back above the pre crash  levels.

Mr Brown introduced a Non Dom tax or payment to allow people to live here and only pay on their UK income and assets. Mr Osborne increased that payment substantially.

Mr Osborne changed the rules over the payment of Stamp Duty on homes bought through companies. He also imposed large rises in Stamp Duty on the more expensive properties. Income from Stamp Duty as a whole has risen.

The art of taxing the rich is to choose rates which bring in large sums without triggering an exodus from the UK, or without allowing too many ways to pay less, often by earning and doing less. This election is seeing an auction of promises by parties of the left to tax the rich more. There are promises to raise Income Tax to 50%, to increase property taxes, bring in a  Mansion tax, and now the abolition of Non Dom status. They run the risk of taxing the rich less, as there will be fewer rich people to tax, and the rich who stay may generate less income and venture less of their wealth for higher returns.

The abolition of Non Dom status was opposed by Mr Balls throughout his government years, and condemned by him quite recently, stating that it might cost the Treasury lost revenue.The first round effect of abolition is to cut revenue, as the Treasury loses all the Non Dom special payments for Non Dom status. The second round effect depends on how many people decide to leave rather than pay tax on their non UK interests, and how many deciding to stay can rearrange their non UK assets and income to minimise UK tax. The scope to lose revenue out of this change is considerable.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

142 Comments

  1. Mark B
    Posted April 9, 2015 at 5:18 am | Permalink

    Good morning.

    The more low earners you have in an economy, the greater the number of those who see the rich as a nice little cash cow to swindle. That’s why at election time we see these promises being made.

    In truth and over time, only the Middle-Class gets hit for many of the taxes that are introduced. The rich go elsewhere.

    Cuts are never a good thing, but what about efficiency ? We do not hear much about that. Cutting government waste etc. Eg Another unnecessary layer of government with the proposed Manchester Mayor.

    • Brian Tomkinson
      Posted April 9, 2015 at 7:27 am | Permalink

      Mark,
      The proposed Greater Manchester mayor was cobbled together by Osborne and the leaders of the respective councils – most of them Labour- without consultation with the other councillors or, of course, the residents. We now are told that this mayor will be given a £6bn budget for the NHS in this region – a terrifying thought when you think which Labour placeman will be almost certain to take on the role.

      • Roy Grainger
        Posted April 9, 2015 at 12:53 pm | Permalink

        Surely that’s the point, same as in Wales, let Labour take charge then blame them for all the problems.

        • Brian Tomkinson
          Posted April 9, 2015 at 3:03 pm | Permalink

          Roy,
          You cynic!
          You may well be correct but those of us living within Greater Manchester will be the victims and it would be nice to be consulted rather than have government by edict foisted upon us.

    • Lifelogic
      Posted April 9, 2015 at 7:42 am | Permalink

      Much of what government does is entirely negative such as all the green crap grants the over regulation of everything, HS2 so cuts here are a very positive thing indeed a triple positive. They save money, release people to get a real & productive job and stop misdirecting the private sector.

      • Bazman
        Posted April 9, 2015 at 5:48 pm | Permalink

        You keep repeating this mantra, but in any modern state the private sector could not fill in the gaps left if the state pulled out. Fact. How do you propose to fill these gaps or do you think they should just be left? Never able to answer this but repeating the same tells us all we need to know.

        • Andy
          Posted April 9, 2015 at 7:26 pm | Permalink

          Why do you say that ? The railways were built by private companies, not the state. Most hospitals were orginally built by private charities not the state and were stolen by the state in 1947. There is no reason why the state should own, much less try to run, a hospital nor a railway. Just because it has done so for most of your life does not mean that it should be so. Perhaps it is time we started to think about these things in a different way.

          • Bazman
            Posted April 9, 2015 at 9:49 pm | Permalink

            The problem is the BBC spreads wealth and educates. You hate this fact.

          • Bazman
            Posted April 10, 2015 at 5:48 pm | Permalink

            Profits cannot be made from patients only from insurance and why should we line the pockets of insurance companies or private hospitals putting profits before patients as they surely must like any other business. When the insurance runs out or is not obtainable. Then what?

          • libertarian
            Posted April 10, 2015 at 8:40 pm | Permalink

            Bazman

            You do know that the biggest health insurer is a non profit organisation don’t you?

            The fact you don’t understand that customers ( or patients) come before profits in all long term successful businesses doesn’t surprise me in the least

        • Lifelogic
          Posted April 10, 2015 at 6:35 pm | Permalink

          What gaps would there be? Almost nothing of any real value to people perhaps 20% of the government spend would be missed.

          The BBC “indoctrinates” mainly especially on the global warming exaggerations, lefty equality drivel and the EU – but I agree sometimes/occasionally it does educate.

          • Bazman
            Posted April 11, 2015 at 10:25 am | Permalink

            What gaps would there be? If you Are you seriously asking this you only have to take the passport fiasco as one example. You expect us to believe that the state does very little well take a look at second and third world countries to see what any state does. I’ve told you before you would not last a day in these countries and you seem to have like many others an admiration of Germanic countries where the state is very strong and controls almost all aspects of their lives via often complex state owned industries and services. You want this and a deadbeat tax haven together which is not real.
            What you keep repeating is little more a thick lying fantasy of your own making and your foil hat obsession with the BBC does not seem to apply to any other media sources could you tell us why? A proper reply is expected to this post lierlogic and one I fully expect you cannot give.

    • Lifelogic
      Posted April 9, 2015 at 8:22 am | Permalink

      Low earning voters are always likely to think (or be encouraged to think) that helping themselves to other people money is a good and moral thing to do. It is just theft pure and simple, it destroys incentives and damages the economy.

      This is why Labour are always keen to lower the voting age.

      It might be rather better if the only people who were allowed to vote were people who had already contributed more than £100,000 income taxes and NI in their lifetime. After all it is largely their money that is being spent and wasted.

      If you ask the question:- Will you vote for a party that steals off the rich and gives to you one tends to get the obvious answer.

      That is what the Labour, Libdems, SNP, greens and even much of the Tory party are all about, the simple & immoral politics of envy and buying votes.

    • CdBrux
      Posted April 9, 2015 at 9:23 am | Permalink

      Possibly pedantic point, and somewhat off topic: the Greater Manchester Mayor themselves replaces the police and crime commissioner no no increase. Of course they may well then create their own staff without a decrease elsewhere.

      Writing as a Tory voter who has lived in Greater Manchester then I am pleased to see some decision making devolved away from the very remote Whitehall. Over time I would wish to see more local based civil servants, less central ones and no net increase.

      On the topic of non Doms then unfortunately it seems a good enough positive case has not been built up in the publics minds over the last years so to a significant proportion of people this idea unfortunately smacks of ‘getting their own back’. Looking at motivation for why people may think like this, and be attracted to a somewhat vindictive policy, I think that too many of them do not feel, rightly or wrongly, that they should care about people and politicians they do not believe seem to care enough about them. The post-election Conservative party in (hopefully) or out of office must address this.

      It’s too late now but a simple measure, such as stopping non dom status for those who inherit it, could have been done for presumably very little actual impact but closed off a rather easy line of attack.

      • outsider
        Posted April 9, 2015 at 11:29 am | Permalink

        Dear CDBrux, One reason why most of the country does not care about the economic benefit of rich non-Doms is that it is nearly all felt in London.

        • Lifelogic
          Posted April 9, 2015 at 4:26 pm | Permalink

          It benefit the country as a whole but is I agree perhaps most visible in London.

        • Bazman
          Posted April 9, 2015 at 6:02 pm | Permalink

          What about the empty houses pressing down on the rest of the property market like holiday homes do in the Lake District that are empty for 50 weeks of the year? This does not benefit either and a maintenance company popping round every few weeks does not make up for it.

          • libertarian
            Posted April 10, 2015 at 8:54 pm | Permalink

            Bazman

            There are just over 25 million houses/flats in UK

            Currently 610,000 are empty that is less than 2.5%

            Of those only 214,000 have been empty longer than 6 months

            Councils now have the right to add 50% to council tax to empty homes after 2 years

            Today there are 527,373 homes available for sale

            Today there are 214,488 homes available to rent

            On the Lake District tourism ( of which holiday homes/lets are a fundamental part) generates £2.2 billion in annual revenues and currently employs 32,805 people

          • Bazman
            Posted April 10, 2015 at 11:38 pm | Permalink

            HELLO! lierlogic where is your ‘sensible’ reply.

          • Bazman
            Posted April 11, 2015 at 10:30 am | Permalink

            What has all this do do with the detrimental effects of holiday homes on local lives and their economy libtard? You are saying there is none? Are you sure…They could just build more houses in the Lake district and absurd planning laws are preventing this. Have think why there are so many planning laws and why it still looks like the 18th century. Just build a massive tower block huh? and you would as you are just deluded.

          • libertarian
            Posted April 11, 2015 at 3:26 pm | Permalink

            Bazman

            Calm down dear, try thinking. Oh yeh I see the problem there.

            I pointed out the massive BENEFITS of holiday homes. Its the problem with you spiteful socialists you fail totally to understand the two sides of any issue. The benefit to people of holiday homes is that it currently provides 33,000 people with jobs in that area. You are right of course it also has an effect on local housing but are you seriously suggesting that killing 33k jobs will help?

            There are 596 holiday homes in Lake District that are partially empty. The Local council levied them with the extra council tax and raised an extra £1.5 million.

            No one mentioned tower blocks, thats just you making up you’re own arguments again & you accuse others of tinfoil headgear…..doh

          • Bazman
            Posted April 11, 2015 at 7:34 pm | Permalink

            Fantasist lies and nonsense as per from you.
            According to 2001 census data, holiday houses in England represent only 1% of the total housing stock. However, the local picture in the Lake District National Park is very different. Using the same 2001 census information 64% of parishes in the Park had 10% or more of its housing stock being used as holiday houses; 33% of parishes had more than 20% of its housing stock used for holiday purposes.
            The local picture is therefore clearly distinct from the national average. More recent data for parishes in the Lake District National Park in South Lakeland district (based on 09/10 council tax records) indicates that 82% of parishes have 10% or more of their housing stock in use as holiday houses, whilst 36% of parishes have 20% or more.
            occupiers of holiday houses don’t tend to use local libraries, they are not registered with the local GP or dentist, they do not regularly use local shops, they don’t have their car serviced at a local garage, and they are very unlikely to engage with local community life; children do not attend the local nursery or school; the place of work is also elsewhere.
            So far from providing great benefits and jobs they need to be surcharged by you own admission (unpleasant name removed – elsewhere I am deleting responses which resort to personal abuse ed).
            Get real and Google holiday home problems in Lake District and get back to us with your findings and then tell us why you are saying what you are saying and for what political purpose?

        • CdBrux
          Posted April 10, 2015 at 11:19 am | Permalink

          A fair point

      • Bob
        Posted April 9, 2015 at 12:12 pm | Permalink

        @CdBrux

        “Over time I would wish to see more local based civil servants, less central ones and no net increase.”

        You’ll see more of both.
        The breakup of the UK will be accomplished by hook or by crook.

  2. alan jutson
    Posted April 9, 2015 at 6:04 am | Permalink

    I wonder if Scotland now given the right to set it own tax rates will punish or try to attract Non Doms ?

    I see Ireland are already suggesting if we do not want them they are happy to take them off our hands !

    It is of course not just the personal tax that these Non Doms bring into the Country, its the tax that the Country gains from the people they employ, the company profits generated in the UK, and of course VAT on all they and their employees spend.

    I do however think that children should not be able to inherit their parents Non Dom Status if born here.

    It is also right that there is also a limit (in years) as to how long Non Doms should be able to keep their full status without some sort of increasing sliding payment scale before their Non Dom Status is removed.

    • Richard1
      Posted April 9, 2015 at 7:03 am | Permalink

      Interesting point. I suspect if we had real tax devolution we would find Scotland wanting to compete on tax rates despite the SNPs professed leftism. After an initial burst of envious egalitarian drivel they will decide the people of Scotland will be much better off if there are more entrepreneurs, companies, investors etc. we need to move the UKIP to a federal structure and get tax devolved, perhaps setting minimum rates – 15% VAT, 20% income and capital gains tax etc, and then allow the individual nations to top up the rates (or not).

    • Leslie Singleton
      Posted April 9, 2015 at 9:11 am | Permalink

      Alan–What’s birth location got to do with it? The Non-Dom concept is either a good one in terms of tax take (what else?) or it is not; and should be all about family abroad, back to which one is likely to gravitate and be buried. The shock horror of there being anything so traditional as a family with a father at its head (which Peston thought “bizarre”) was wretched. BTW mother can head too if father dead. One thing for sure is that Miliband’s prattle on this isn’t going to reduce the deficit, never mind the debt.

      • alan jutson
        Posted April 9, 2015 at 10:03 am | Permalink

        Leslie

        Not quite sure of your point.

        At the moment a Child who is born in the Uk, who has has spent the whole of their life here, is able to claim by inheritance Non Dom Status (or at least that is what is being reported) from their parents.
        This does not seem quite right to me.

        The argument has nothing whatsoever to do with family life or Father figures.

        The Labour argument that Non Doms would then be paying all of their tax here is also an error , as many Countries will be taking tax from such people from income earned abroad, through there own tax systems,.

        I believe our government HMRC has had so called double tax arrangements with over 100 countries for years.

        • Dennis
          Posted April 9, 2015 at 1:25 pm | Permalink

          At last someone has mentioned double tax arrangements – very pertinent but no politician or commentator seems to have heard of it.

          • alan jutson
            Posted April 10, 2015 at 8:21 am | Permalink

            Dennis

            “Double taxation arrangements”

            Yes not a single person mentioned it on Question Time last Night.

            I waited, and waited, and waited.

            The suggestion was made that non doms even avoided UK tax on UK earnings !!!!!

            Labour got away with it again.

            Shame on the Conservative representative (forgot her name) for not making the situation much clearer.

    • Lifelogic
      Posted April 9, 2015 at 10:35 am | Permalink

      It would be very foolish indeed (shooting the economy in the foot) to abolish non dom status. They should be extending these tax reductions.

      Miliband falsely claimed yesterday that non doms do not pay UK tax in fact they pay lots on their UK salaries, plus the non dom tax up to £90K, plus stamp duty, vat and anything they remit to the UK.

      The way to get the rich to pay more in tax is to lower tax rates and get more of them to stay in the UK not attack them all and make them leave. We benefit hugely from all the rich French that their silly socialist government sent over to the UK.

      Now thanks to Cameron’s uselessness it seems we may get a silly government here self harming the economy and sending them on somewhere else.

      • outsider
        Posted April 9, 2015 at 11:24 am | Permalink

        Dear Lifelogic, It would be far more helpful to the UK economy, as you will doubtless agree, if we had many more seriously rich nouveaux riches British, preferably billionaires. It would even help the “national game” of professional football.

        • Lifelogic
          Posted April 9, 2015 at 4:29 pm | Permalink

          Indeed tax rates that encourage people non doms and UK nationals would be a very good thing. Current tax rates are absurdly high and absurdly complex more a form of capital theft than a fair taxation of profits.

          • Bazman
            Posted April 9, 2015 at 6:05 pm | Permalink

            Blah! Blah! The rich give us all money and will leave.
            How does that communist country called the USA manage without non dom status not to mention the rest of the western world?

          • libertarian
            Posted April 9, 2015 at 8:55 pm | Permalink

            Bazman

            Us tax laws are different, no one in US is taxed by residence they are taxed by citizenship. US citizens pay tax wherever they are non citizens don’t.

            Er you do know that Ireland for instance encourages Non Doms? And that Irelands Non Dom rules are very similar to ours. Meanwhile Germany has a two level non dom tax scheme etc etc.

            Bazman you really ought to do research rather than just make up everything. You sound just like the person who writes Labour Party manifestos. Make it up and hope no one notices

            UK Non Dom’s paid £8 billion in UK taxes last year

          • Ted Monbiot
            Posted April 10, 2015 at 7:55 am | Permalink

            Apart from having low income tax rates the USA has arrangements for people coming to live and work in the USA.
            And arrangements for Americans going and living abroad.
            They dont call it non dom but it amounts to a very similar outcome.

      • Denis Cooper
        Posted April 9, 2015 at 11:54 am | Permalink

        Oh, if we get a Labour government that will be entirely the fault of UKIP and not at all the fault of Cameron and the Tory party … just as it’s the fault of Lidl and Aldi if Tesco fails to attract enough customers, no reason to blame the Tesco management, Lidl and Aldi should just stop competing for customers who rightly belong to Tesco, that’s all, and people who have switched to shopping at Lidl or Aldi should “come back home” to Tesco even though its managers have publicly insulted and derided them.

        Interestingly, today’s Telegraph has an article by a tribal Tory supporter which includes an admission that not all UKIP supporters are poor little Tory sheep who have strayed but who can be persuaded or cajoled or bullied back into the fold, the arrogant assumption made by Cameron and his ilk:

        “The likely explanation, according to Ashcroft, is that support for Ukip has fallen, with Ukip defectors skewing in Labour’s favour in Harrow East.”

        • Lifelogic
          Posted April 9, 2015 at 6:14 pm | Permalink

          Tesco not only failed to attract enough customers they went rather further than that and new have huge legal actions to face.

          Some rather better auditing and accounting rules in the UK are needed. Should auditors not be appointed by shareholders rather than directors it is shareholders money after all?

  3. Richard1
    Posted April 9, 2015 at 6:10 am | Permalink

    It is alarming that most political parties are focusing on the politics of envy and competing in how to persuade people that if only a tiny group of very rich people paid ‘a little bit more’ there can be unlimited and indefinite increases in spending. It is not the route to prosperity. Labour in power, as you point out (and contrary to the Party’s instincts and preferences), pursued mostly practical policies designed to maximise revenues. The ne0-Marxist current Labour Party under Mr Miliband is returning to the impractical and revenue diminishing politics of envy we saw tried to disasterous effect in the 1970s.

    A Labour govt would be a terrible threat to recovery and prosperity in the UK.

    • Stephen Berry
      Posted April 9, 2015 at 1:11 pm | Permalink

      Envy is a powerful force in human relations but mercifully, it is not all powerful. If people in this country were given the choice between increasing their income by £5,000 or decreasing the income of the top one per cent by £100,000 I think the majority would plump for the former and take the money.

      It’s natural that the party of redistribution should play the envy card. The party of opportunity need to raise people’s horizons and come up with a measure which will tangibly benefit millions of aspiring voters. In 1979, voters showed that they preferred to think about purchasing their own council house rather than glorying in the fact that the rich were then being taxed at 98 per cent or whatever it was. The Tories need something similar now.

      Richard, you are right that a Labour government would mean a grim grind, Hollande style, for the UK. And then you throw in support from a separatist party led by someone who seems to have an agenda to the left of Ed Miliband. Remarkable that the electorate don’t ‘get this’?

      • Richard1
        Posted April 9, 2015 at 3:38 pm | Permalink

        Yes and Michael Fallon is quite right to point out that a scheming Miliband would also compromise the security of the UK by being prepared to treat with the Scottish separatists who want unilateral nuclear disarmament and dismemberment for the UK. No patriotic British politician would contemplate treating with such people, and it is appalling that Labour’s candidate for PM will not rule it out.

        Why is it that Mr Fallon is damned on all sides for a ‘highly personal attack’ (BBC’s words) on Miliband, whereas for example numerous attacks on Mr Cameron by Miliband and others, accusing Cameron of being ‘posh’ etc are not deemed a personal attack?

        The left can dish it out but they cant take it.

        • Lifelogic
          Posted April 9, 2015 at 6:22 pm | Permalink

          It seemed a perfectly sensible attack on Labour they clearly they would agree almost anything with the SNP to gain power.

          Anyway any attack on Labour & Miliband/Balls with their proposals to thieve off landlords, muck up the energy market with price controls, put up taxes (even further than tax borrow and waste IHT ratter Osborne) and their latest moronic nondom proposal is fully justified if it works.

      • William Gruff
        Posted April 9, 2015 at 5:27 pm | Permalink

        Stephen Berry:

        Remarkable that the electorate don’t ‘get this’?

        That they do not see things as you see them does not necessarily mean that they do not understand them, or are affected by them in the same way.

      • Bazman
        Posted April 9, 2015 at 6:09 pm | Permalink

        Its not envy that a British person born and living here with business here has non dom status.
        Its not envy to expect them to pay the same taxes as everyone else? What on earth are you talking about? Envy?
        Council house buyers and billionaire are the same. Pure fantasy and dogma. Laughable not envious.

        • libertarian
          Posted April 9, 2015 at 9:01 pm | Permalink

          Bazman

          For goodness sake man find out what you’re talking about first.

          If a British born or indeed anyone else living here has a business here they pay ALL the taxes everyone else does. They pay income tax, national insurance, council tax, CGT, Stamp Duty, VAT and their businesses pay Corporation Tax. The only thing they don’t pay tax on is what they earn in another country as long as they don’t bring the money here, if they do, its taxed.

          Last year Non Dom’s paid £8 billion in tax in the UK

          So yes its spite and envy that old Labour Party standby.

          • Bazman
            Posted April 10, 2015 at 6:02 pm | Permalink

            Non-doms can enjoy significant tax savings on income tax, capital gains and inheritance tax and they pay fee to pay these less taxes and this cannot be right. Why cannot everyone do this? In some cases the non dom staus can be inherited ie getting it given to you for being born into the right family like loyalty no less! Non doms receive a tax advantage that UK domiciliaries do not so spite and envy comes from you as this is entirely irrelevant in this debate. Many rich are envious of those richer than themselves don’t forget.
            As for council tax some just refuse to pay it and get away with it too. You or me would face bailiffs and prison. I know thats just jealousy talking as I have to pay my £1200+ council tax bill next week.
            I have a foreign wife can I claim non dom if I put all my savings in her name abroad and if house prices go sky high around here avoid any IHT and council tax? This would be OK with you?
            Apologist nonsense as per libtard.

          • libertarian
            Posted April 10, 2015 at 8:57 pm | Permalink

            Bazman

            Nope you’re wrong as normal. Go look up the tax rules

          • Bazman
            Posted April 11, 2015 at 10:38 am | Permalink

            They pay a fee to avoid tax libtard that is where it begins and ends. High and mighty posts to consult tax rules will not wash and the more apologists shout about about how wrong it is to abolish non dome status and the more the Tories defend their paymasters the more right it becomes. Why are you defending if they have no advantage in non dom staus. They do it to help us all? Get real.

        • Ted Monbiot
          Posted April 10, 2015 at 7:57 am | Permalink

          Well they add a few billion per year to the UKs tax take.
          Golden goose and all that.

    • JoeSoap
      Posted April 9, 2015 at 5:40 pm | Permalink

      I disagree.
      If this non-dom measure was accompanied by one REDUCING rates correspondingly for non non-doms would you agree with it?
      I think we should be creating our own billionaries, by reducing taxes for all, not importing them by giving benefits to the few privileged by birth etc.

  4. Narrow Shoulders
    Posted April 9, 2015 at 6:36 am | Permalink

    Risk is they key to taxation in my view.

    If you risk your capital seeking a return then return on that capital should attract low tax.

    If you sit in a board room voting yourself ever increasing sums and bonuses or in a dealing room risking others’ funds there should be punitive tax over a certain level. (I favour 40 times the fte salary of the lowest paid worker or subcontractor in your organisation).

    Yes some will leave but they will be replaced ( apparently our membership of the EU permits many talented people to come here if we can not produce our own talent. How ironic if executive pay became compressed due to over qualified Poles).

    • Lifelogic
      Posted April 9, 2015 at 8:25 am | Permalink

      Far more control by shareholder of director’s and top management salaries is needed. It is shareholders money not the directors to help themselves to. The current control mechanisms on remuneration are totally useless. Just as the current mechanism for control of government expenditure (voting for MPs) is useless as a mechanism of control.

      • Bazman
        Posted April 9, 2015 at 6:12 pm | Permalink

        Shareholders have often voted against having these powers and often vote for the rates of pay put forward so tell us why you would stop them from paying what they like to who they like in an insider company run for the benefit of a few managers with executive powers.
        To complicated for you isn’t it?

      • Bazman
        Posted April 9, 2015 at 6:45 pm | Permalink

        If solar panels became so cheap that they could be put on any surface for next to nothing in any colour, any colour now, producing useful amounts of energy would you still be against them? Some say this is possible a bit like the miniaturisation of the electric motor got rid of that big one on the loft and all the belts and pulleys going to the other levels and a look at high end cars shows thin solar panels keeping the car cool in the sun when parked. Expensive now standard in ten years.
        However this is not the argument is it? Its a bit like file sharing. Music and film like electricity should be paid for no matter what technology exists and had the internet been told to you 30 years ago what not have accepted that in a mindset against modernity, and telling us about freedom of choice, but having to pay for that choice and the dangers of unlimited information.
        Solar will not at least in this country in the foreseeable future replace energy generation with or without subsidy but that not the point it’s the threat to the status quo that many fear. Like the media industry telling us that music and film will cease to exist. As if. In the end solar panels and the internet may well just roll over the top of all you and you attempts to ban both. The bike rolls down the hill ever faster.

        • Edward2
          Posted April 9, 2015 at 11:33 pm | Permalink

          Whilst you are on the internet Baz, look up how many hundreds of square miles of solar panels we would need in the UK to replace current energy sources.
          And there are problems matching grid supply and demand with wind turbines and solar power as Germany is finding out recently.
          They are getting cheaper and a little more efficient but still no match for traditional energy sources.
          One day maybe.

        • David Price
          Posted April 10, 2015 at 7:37 am | Permalink

          I’ve seen MCS accredited panels at 50p per watt which is below the golden target of $1 per watt, this would make for quite cheap power, but not in the UK. The problem is that our heaviest use of power is in winter when PV supply is at it’s lowest or non-existant.

          The main issue though is that it is only sustainable for the few based on subsidy by everyone else, given all your ranting about the have and have nots I am truly surprised you support such a thing.

          Even if your precious state gave everyone roofs of PV, you would still need the same power supply infrastructure to meet the need outside the short sunny season when even efficient batteries won’t help you.

        • Bazman
          Posted April 10, 2015 at 7:00 pm | Permalink

          Not as replacement for mains electricity, but come the day when they are viable as a supplement for energy in homes, which I agree they are not now even with subsidy in my opinion. I take it you will not be using them? Yeah right.
          Viability is not an issue as you are telling us they solar cannot ever be viable in in any application anywhere in the world which is a lie and a fantasy. Like all energy sources it has its uses and even if it is not economically viable, in some cases the environment benefits may well prove it to be. Hence Apple and many other large corporations using solar. Looking goodand being clean also helps business. A fact you will have to live with. However its not about reasoned argument with the fantasist as we have seen.
          In your case this may be true edward as you like to support large companies and their workforce via royalties as you have said or maybe you do not but are unable to avoid their tolls? I said avoid not evade.
          etc ed

          • Edward2
            Posted April 11, 2015 at 10:50 pm | Permalink

            If solar panels were competitive and relatively efficient then of course I like many millions of others would use them.
            Maybe one day when science and engineering has improved their performance.
            But our climate makes solar doubtful.

    • Roy Grainger
      Posted April 9, 2015 at 8:55 am | Permalink

      I tend to agree. I have always worked in the private sector and at one time in a loss-making USA company that nearly went bankrupt, during those years we took a “voluntary” pay cut It is galling to see bank employees in similarly bust businesses being awarded annual bonuses under the pretence that it is necessary to stop staff leaving. Let them leave, if they can. As you say the EU free-market should allow them to be easily replaced. I think some Conservatives are wrong to try to justify such absurdly unjustified salaries and bonuses in the name of capitalism and the free market, they arise really because of implicit or explicit support by the state of failed companies.

      • Andy
        Posted April 9, 2015 at 7:34 pm | Permalink

        What is gauling is to see that the bonus pool is often far larger (usually several times so) greater than the amount paid out in dividends to the shareholders who, after all, own the damn company.

        • William Gruff
          Posted April 11, 2015 at 2:22 pm | Permalink

          Andy:

          The shareholders alone have the remedy for that.

  5. Lifelogic
    Posted April 9, 2015 at 7:01 am | Permalink

    We’ll eventually Osborne lowered the rate to 45% a rate that is still far too high.

    Who wants to pay perhaps millions pa in tax just to live in the UK while getting so little in way of competent public services.

    Individuals on average invest the money far better than governments do anyway it is not hard. The money is far better left with the people who earned it and this is better for jobs, growth and everyone. We see from the absurd list of endless state waste and insane investments that this lefty, EUphile, greencrap government indulges in that they have vast sums of money to waste already.

    Lower and simpler flattish taxes are better for all in the end we will not as a nation become rich by enlarging the numbers of lawyers, tax collectors, bureaucrats and tax accountants.
    We want tax laws that enlarge the numbers of the directly productive. More builders, engineers, medical people, scientists and business people and fewer feckless, bureaucrats and essentially parasitic jobs.

    We will not create more jobs by erecting artificial legal obstacles to employment and excessive taxes.

    • Bob
      Posted April 9, 2015 at 12:41 pm | Permalink

      @lifelogic

      “Lower and simpler flattish taxes are better for all in the end we will not as a nation become rich by enlarging the numbers of lawyers, tax collectors, bureaucrats and tax accountants.”

      With a flat rate system based on a rate of 25% with a personal threshold set at the living wage the result would be:

      Salary – Tax Liability
      150k – £32,750
      19k – nil

      This is assuming that the personal threshold was applied to everyone regardless of earnings. Then of course, when the higher earners spend their money the Treasury would be gaining VAT.

      • Andy
        Posted April 9, 2015 at 7:36 pm | Permalink

        Personally I would set the income tax rate and the VAT rate the same.

    • Bazman
      Posted April 9, 2015 at 6:15 pm | Permalink

      They do not invest in infrastructure such as roads do they?
      The rich on the whole do not use public services so what else to they get and why are they are here? Russians in particular. Have a think if you can and write something sensible instead of bleating about how hard done by billionaires are.

      • David Price
        Posted April 10, 2015 at 7:44 am | Permalink

        If you want long term visitors to invest in the infrastructure you could require them to invest in a development bond for a few years in return for a residence permit. That bond could then be used to support your infrastructure investment.

        The key though would be to provde some tangible return on that investment which would encourage more of the same as opposed to unfair taxes which would keep these people away.

      • Bob
        Posted April 10, 2015 at 8:52 am | Permalink

        Roads are well covered by fuel duty and road tax, which even Non Doms have to pay.

        “Russians in particular.”
        Your sounding like a green eyed racist Baz. tut tut

        Have a think if you can and write something sensible instead of bleating about successful people all the time.

        • Bazman
          Posted April 11, 2015 at 10:45 am | Permalink

          You do not get the Russian connection do you bob and as for racist about them I married one. You seem to think their success has come from talent and work. It has not. Not by a long way…You are saying this is not sensible and I am bleating. Dream on.

  6. oldtimer
    Posted April 9, 2015 at 7:10 am | Permalink

    It is dog whistle politics. It will do nothing to deal with the deficit except perhaps make it even worse. Whatever the effect it will be too small to make much difference.

    The way politicians talk, a visitor from Mars would imagine that the “rich” pay no taxes at all. The reality is that they pay a very high marginal rates of tax on income and on capital gains. The historical record shows that the UK economy has a taxable ceiling of about 38% of GDP. Attempts to push it up beyond that level invariably fail.

  7. Roy Grainger
    Posted April 9, 2015 at 7:28 am | Permalink

    Miliband should stop pretending that this move will raise revenue, it won’t, he should just say he’s doing it for ideological reasons even if it leads to a reduction in revenue and I bet the same number of people would support it. Overall the “cost” is not that much. Of more interest are “non-dom” companies like Amazon who can’t move their business other than by stopping selling in UK, taxes on them should be increased.

  8. agricola
    Posted April 9, 2015 at 7:28 am | Permalink

    Milliband is just playing to his audience. He must know full well that there is plenty of property in the Channel Islands that can be bought by escapee none domiciles. A place where I believe you only pay 20% on what you earn in the islands. His audience like the politics of envy, it being all they have to look forward to in their thin lipped miserable lives.

    I also see that Cameron is only playing to the converted, but after the TV fiasco we should not be surprised. When are we to get a glance at the Conservative Manifesto. Is it so toxic that it cannot be published until election eve. Not that I have seen anyone else’s manifesto either. Are they all such a pack of empty promises that they have been quietly abandoned. For sure they will not be referencing any of the major problems that face us with any degree of honesty.

    1. Continued membership of the EU
    2. Solving Immigration which is a none starter while in the EU
    3. European Arrest Warrant and all the other law we have lost to the EU
    4. Continuing loss of Sovereignty, and the growing insignificance of Parliament.
    5. English Parliament for England as others in the UK devolve.
    6. Taxation to maximise enterprise.
    7. HS2 and it’s irrelevance.
    8. Defence and the parlous state it has been allowed to fall into.
    9. The dreadful state of our roads.
    10.To Frack or not to Frack.

    No doubt I have forgotten some and they are not in any order of importance. However they all need addressing for the future well being of our confused island nation.

    • Lifelogic
      Posted April 9, 2015 at 6:25 pm | Permalink

      You pay 20% tax on worldwide income in the Channel Islands not just on CI income.

    • Excalibur
      Posted April 10, 2015 at 6:44 am | Permalink

      On the money, agricola. These vital issues are being lost in the brouhaha. There is a need to get down to the issues that really matter, but I doubt that it will happen.

  9. David
    Posted April 9, 2015 at 7:32 am | Permalink

    I think we should have higher taxes on property and lower on wages.
    An example using two people :-
    person 1 Ed M owns a multi million pound house and earns £120 k per year (figures are approximate)
    person 2 owns a £800 K house and earns £200k per year.
    Despite the fact that person 1 is much richer than person 2 he pays less tax.

    • alan jutson
      Posted April 9, 2015 at 10:13 am | Permalink

      David

      “Property tax”

      How about a person living in a 2 bed flat in a nice part of the outskirts of London,purchased 30 years ago when in work.

      Now worth well over £1,000,000, now living on a State Pension and a bit of savings, whose partner has passed away.

      No its not me, but how would you suck money out of them, make them move ?

      I live 35 miles from London in a now crowded place called Wokingham, and at the moment my Council tax is 50% of the basic State Pension..

      I think you need to think again !

      • Narrow Shoulders
        Posted April 9, 2015 at 12:44 pm | Permalink

        If there is ever a property tax it should be levied on the purchase price and not perceived value. Little old grannies are immediately excluded unless they have forked out a fortune.

        A better solution is more bands on Council tax, once again levied on the last purchase ( or transfer) price.

        • Lifelogic
          Posted April 9, 2015 at 6:27 pm | Permalink

          But you might have purchase it entirely with debt and have no net asset at all to pay the tax.

        • alan jutson
          Posted April 9, 2015 at 7:20 pm | Permalink

          Narrow shoulders.

          We have Stamp Duty already which is levied on Purchase.

          • Narrow Shoulders
            Posted April 9, 2015 at 8:36 pm | Permalink

            @ Alan Jutson

            I am not advocating a property tax I am merely suggesting a way to mitigate the granny or asset rich/cash poor factor if it does arrive. The stamp duty is a one off tax on purchase but the property tax as proposed would be annual therefore to mitigate its effects on those on whom further tax would be more damaging valuing at purchase price would be helpful.

            @LL Anyone purchasing for full debt @ £2 million has sufficient to service the £2 million debt and should be able to service a subsequent tax under my proposal. I repeat I do not advocate the tax.

        • David
          Posted April 10, 2015 at 12:29 pm | Permalink

          @”If there is ever a property tax it should be levied on the purchase price and not perceived value. Little old grannies are immediately excluded unless they have forked out a fortune.”
          Why should people who move more pay more in taxes?
          I don’t mind paying more tax than people who earn less than me or have smaller homes but why should moving be so heavily taxed?

      • Roy Grainger
        Posted April 9, 2015 at 1:00 pm | Permalink

        What is interesting is that in my area of London there are lots of these asset rich/cash poor long-term residents who would be forced to move by the homes tax and they would likely be replaced by rich Russians. On the other hand the local Labour council blocks new housing developments because they say they would be bought by rich Russians at the expense of local residents. For this reason the council has to pretend to be opposed to the homes tax, the local MP is all for it though, he gave up representing his constituents years ago.

    • Denis Cooper
      Posted April 9, 2015 at 11:36 am | Permalink

      I see no strong reason why both should not be expected to pay tax on their capital gains when they sell those houses and so have the money available to pay the tax, but not an annual levy while they own them and may not have enough income to pay the tax. I’m not in favour of the state taxing people out of their homes.

      • alan jutson
        Posted April 9, 2015 at 7:17 pm | Permalink

        Dennis

        Capital gains on the house when you sell would not work, no one would sell.

        I designed and built my own home 35 years ago, If I sold under your suggestion then I could never trade down, because all I would be able to purchase would be a starter home, after 35 years of inflation.

        The primary residence has to be free of any taxation for this very reason.
        and also to encourage mobility for Jobs, or for possibly looking after elderly family members, or even to move closer to a town for perhaps your own mobility problems.

        Your home is exactly that, a HOME, not a cash cow for the government, who already benefit by getting tax on all the improvements and maintenance spent over the years, and then get a final chunk via inheritance tax.

        Good grief let us keep something which we have paid for out of earned and taxed income.

        • Denis Cooper
          Posted April 10, 2015 at 7:08 am | Permalink

          Of course they would sell, Alan, when they wanted to or had to, just as people sell shares even though part of the proceeds will be taken as capital gains tax. Or in the end the house would from part of their and capital gains tax could be levied then.

          • alan jutson
            Posted April 10, 2015 at 8:26 am | Permalink

            Sorry Dennis

            You do not live in or on a share certificate.

            Shares held in an ISA do not attract any capital gains tax.!

            Happy to have second homes/buy to let homes taxed, but not a primary residence.

            For goodness sake you pay enough Stamp duty when you buy one.!

          • Denis Cooper
            Posted April 11, 2015 at 7:39 am | Permalink

            Alan, under my scheme capital gains tax on disposal would REPLACE stamp duty on acquisition. Instead of being taxed upfront on the transaction people would be taxed on actual gains made on disposal, after allowing for inflation plus a modest annual return over the period of ownership. Which incidentally means that you would not pay capital gains tax on the sale of your present home, which was acquired under the present stamp duty regime; nobody would be expected to pay at both ends.

  10. Know-Dice
    Posted April 9, 2015 at 8:14 am | Permalink

    With a percentage based tax system, you earn more you inherently pay more tax in real terms.

    So, I really don’t agree with “Most of us agree the rich should pay more, and that income tax should go up with income level.”…

    As you clearly show, the tax system whether it be personal income, CGT or Corporation tax should be set at an optimum level that gets the most tax whilst being at the lowest percentage level. Rather than the political dogma of the opposition parties “tax until the pips squeak” regardless oft he amount of tax income it brings in.

    • Narrow Shoulders
      Posted April 9, 2015 at 12:47 pm | Permalink

      Abolish all taxes except sales tax on that case.

      Stuff will still be bought and traded and govt can steal the required percentage.

      From each according to their means

      • Bazman
        Posted April 9, 2015 at 6:19 pm | Permalink

        So tax the poor then as they will pay the most as percentage of their income and have the least services. It’s called maths. You assume the rich do not benefit by paying more. They do.
        Why would the population accept this and why should they? Charity for the wealthy no less.

        • Narrow Shoulders
          Posted April 9, 2015 at 8:39 pm | Permalink

          @Baz

          If the poor paid more they might think about who they were voting in to spend it.

          Why should someone on £25K per year benefits not pay any tax?

          • Bazman
            Posted April 10, 2015 at 7:36 pm | Permalink

            If the poor paid more they would certainly not be thinking about voting a party in that gives tax cuts to the rich for being rich and no other reason and cutting their income to fund it. This would not incentive them to become rich I should think.
            Taxes are paid on benefits you will be happy to learn and I am paying a shortfall of tax this year and dole claims where included in the calculation for this shortfall of tax I also lost my tax credits by the limits on earnings being reduced to by the Tories to fund tax cuts for the rich.
            A tax rise for not being poor, but not rich. I could say I don’t know why I bother, but if I did not I would be poor. You need to be rich not to bother then you get a tax cut for not bothering. I could go on a bit longer if you likelogic. LOL!

        • libertarian
          Posted April 9, 2015 at 9:10 pm | Permalink

          Hold on Bazman

          You just said

          “You assume the rich do not benefit by paying more. They do.”

          But further up the thread you said the opposite

          “The rich on the whole do not use public services so what else to they get and why ”

          Blimey you sound just like Milliband & Balls contradict yourself in the same speech . Socialsts …talking nonsense since 1867

          • Bazman
            Posted April 10, 2015 at 7:23 pm | Permalink

            Got me there libtard, but it puzzles me how Russian billionaires benefit from this country..!

          • libertarian
            Posted April 10, 2015 at 9:03 pm | Permalink

            Bazman

            What do you find puzzling about Russian ( or indeed any other ) billionaires being here ?

            They benefit by being in a country that is fairly safe, fair, non violent and is one of the top 3 major business centres in the world. Mostly based in London one of the most vibrant, multicultural and cultured cites in the world.

            If they were here just to avoid tax they wouldn’t be here would they as I think Acorn pointed out they could go live in Monaco, Virgin Isles or Grand Cayman

          • Bazman
            Posted April 11, 2015 at 7:47 pm | Permalink

            They benefit by being in a country that is fairly safe, fair, non violent and is one of the top 3 major business centres in the world. Mostly based in London one of the most vibrant, multicultural and cultured cites in the world.
            So they benefit by these form of services that the state provides low levels of crime, corruption, reasonable eduction of the population, and good private schools transport systems, financial services, quality shops and safe restaurants, a fair tax system, land ownership being possible, land ownership laws being straightforward and fair and so on.
            Who provides this framework. The state and this does not exist in Russia. This is why they are here. and you are right they are not here for just tax reasons so why are you so against making them pay a more fair larger share?
            They can go back to Russia if they don’t like it as this is where they made their fortunes so must be better place except it not is it and this is how they made their fortunes.
            Get it now you want to roll back the state to Russian levels as it would be good for business? etc ed

  11. Liz
    Posted April 9, 2015 at 8:33 am | Permalink

    Right or wrong on Non Doms, – Labour made the TV headlines for the second day in a row – the Conservatives need to up their game and why does nobody mention Marxism and Len McClusky lurking there in the wings? Taxation has become a toxic subject with so many large American companies paying practically no taxes here, Expensive houses bought as investment and left empty and dark, and its not only Labour voters who mind about that.

  12. Posted April 9, 2015 at 8:41 am | Permalink

    Taxing those whose enterprise has made them rich does put the economy at risk . Hollande’s efforts to equalise society by slapping punitive tax levels on the high earners failed and sent the French economy in nose dive ; it is an example of what not to do . High earners need to be incentivised and not driven to seek pastures new elsewhere ; directly and indirectly they create employment and opportunity .

    I do believe there is a case to tackle the problem of extreme land owners whose estates go back donkey years and where the present incumbents do little to utilise their assets . As the population in this country grows and the pressure exists to build more and more houses , the case against these land holders grows . Inheritance of this sort can and should be controlled . Those who create wealth should be encouraged to keep on growing .

    • mickc
      Posted April 9, 2015 at 1:36 pm | Permalink

      So yes, great idea!

      Someone has wealth and can look after themselves, let the State take it away so err, oh yes, eventually the State (i.e. the taxpayer) has to look after them.

      In the meantime, all those productive bureaucrats needed to produce, run and enforce this system have done rather well, but produced sweet f a!

      Brilliant!

  13. acorn
    Posted April 9, 2015 at 9:31 am | Permalink

    The UK income tax system is progressive compared to the OECD norm. The richest decile gets 32% of the income and pays 38% of the income based tax. In the US, the richest decile gets 34% of the income and pays 45% of the income-based taxes. Mind you, US citizens pay on their global income wherever they are, and there is no non-dom status in the tax code, as far as I am aware.

    But you can see the difference private health care and education with less welfare make; US gross fed/state/municipal tax receipts were circa 25% of GDP compared to circa 37% in the UK. As far as I can tell, it is middle-income families in the UK that pay more tax than their US equivalents. Probably due to the start point for the 40% tax band.

  14. Iain Gill
    Posted April 9, 2015 at 9:32 am | Permalink

    Re “Others are not jealous and see nothing wrong with people having more money if they are better footballers, singers, business people or whatever and earn more as a result”
    Sure most people are happy that those who have made money with genuine talent, hard work, or even luck sometimes. What most of us are cheesed off about is the large majority of the richest in British society being there through inheritance, access to better schools than are imposed on the rest of us, old boys networks, and so much more. We have equality laws coming out of our ears and yet discrimination against the white working class accented British is not only legal its actively encouraged by the state in the form of “positive discrimination”. Even in the labour party supposedly fighting for the working and under classes their senior ranks are full of people there simply because their parents were labour big wigs.
    Many of the rich foreigners I know who have been given permanent residency simply because of their wealth made that money on the back of dodgy dealing to say the least, not the kind of things the people support.
    So your whole line of thought John is not good enough, and this whole aspect spoils you narrative which would otherwise make part of a vote winning approach.

    • Denis Cooper
      Posted April 9, 2015 at 11:20 am | Permalink

      This is why I am not in favour of simply abolishing so-called inheritance tax, but would rather see it replaced by a tax on legacies received rather than a tax on the estate irrespective of how it is to be divided. When Major spoke in glowing terms about wealth cascading down the generations he was apparently oblivious of the corollary that poverty would also cascade down the generations. Of course to be fair the state already does a great deal to try to ensure that the members of each new generation have more equal opportunities but I would still like to see some of that being funded by a legacy tax levied at a reasonable rate.

      • Lifelogic
        Posted April 9, 2015 at 6:42 pm | Permalink

        Indeed a reasonable rate for IHT would be well below 20% and only above say the £1 million threshold we were promised not the absurd 40% above £325K as now.

        Earn an extra £1 pay 45% income tax on it and then 40% on death leaves your beneficiaries just 33p so why bother?

        • Denis Cooper
          Posted April 10, 2015 at 7:09 am | Permalink

          I’d say that 20% would be a reasonable basic rate for my legacy tax, whether there would also be higher rates is another matter.

    • libertarian
      Posted April 9, 2015 at 9:20 pm | Permalink

      Iain Gill

      I’m afraid you are just plain wrong

      “the large majority of the richest in British society being there through inheritance”

      Actually 79% of the wealthiest UK people are self made business people. Of the 21% who inherited wealth a number of those only partly inherited wealth but used it to build bigger businesses

      Exactly how many rich foreign dodgy dealers do you know Mr Gill?

  15. Posted April 9, 2015 at 9:34 am | Permalink

    What the left don’t understand is that most rich people don’t squirrel their money away, the spend it. They employ people, they spend on staff, on services and on goods as well as on expensive properties.
    Every thing they do attracts taxes, from tax on people whom they employ to VAT on anything they buy. An Arab millionaire was reported the other day to be building a garage for his hundred plus cars! Think of all that tax!
    Ireland would certainly welcome them; they made this clear when a previous Labour government made threats against our Public Schools. Any government would be extremely stupid to think that the rich are a ready source of income; they are not and could easily move to a more welcoming country.
    These days most businesses can be run from almost anywhere due to modern communications and the government needs to work hard to keep these rich people in the country by ensuring that the taxes that they levy are competitive with other potential host countries.

    • alan jutson
      Posted April 9, 2015 at 10:16 am | Permalink

      EP

      Exactly.

    • acorn
      Posted April 9, 2015 at 4:59 pm | Permalink

      The idea that the rich will run away to low tax climes is a myth. The marginal rate of income tax in California is 52% if you can’t deduct your state and local income tax, or sales taxes, from your federal income tax. Is there an exit of working age rich people to other states? No there isn’t. They like living in California! The state of Texas advertises for rich Californians to move to Texas for low state income tax, or no state income tax in Florida. There is no rush to go there.

      The “rich run-away” myth is perpetrated by right wing, corporately owned, Republican / Conservative politicians, to frighten the little people while maintaining a multiple tax saving loopholes for their sponsors who will provide their post-politics, nice little earner, directorships.

      • acorn
        Posted April 9, 2015 at 5:13 pm | Permalink

        JR, get rid of Michael “fracking’ Fallon, he is re-inventing the “Nasty Party” on the doorsteps.

      • libertarian
        Posted April 9, 2015 at 9:32 pm | Permalink

        Acorn

        Total drivel

        Ever heard of France, its a country quite near here that recently imposed draconian tax on wealth. Which then upped and left. More than 160 French companies relocated to where I am in Kent since the socialist idiocy in France

        Citing US tax law is pointless as US taxes are paid by US citizens wherever they live in the world. State income tax of which California is the highest and they levy 13% on incomes OVER $1,000,000 dollars.

        • acorn
          Posted April 11, 2015 at 9:09 am | Permalink

          French residents are also liable to French taxes on worldwide income and wealth. A lot of situations can keep you tax resident in France.

          The ISF (wealth tax), goes up under left wing governments and down under right wing governments. Some celebrity and high net worth individuals (€1.3 million plus), have left and mostly gone to Belgium. There really wasn’t a lot of point to moving a business out of France for ISF purposes. A French mortgage is ISF deductible for non-residents, but watch the exchange rate, (until we join the Eurozone 😉 .

  16. Posted April 9, 2015 at 10:28 am | Permalink

    If a country overdoes its taxation of the rich, as France did recently, many of them go and live, work and earn somewhere else.

    A bit of thought is required on this one. Would this necessarily be a bad thing? Is Britain a better place because certain extremely wealthy people, who may well have acquired that wealth under very dubious circumstances, have chosen to live here? It’s usually not to work or earn. At least not as most of us understand the term. What are they bringing to the party? OK they bring their money, or some of it. But is that a good thing?

    Supporters of certain football clubs would say it was. But if their club is doing better now than it would had it not received a financial boost from it billionaire owner, it must follow that other clubs are doing worse. If the ultra rich person is occupying a multi million pound residence in Mayfair it must follow that someone else, slightly less mega wealthy, who would have occupied that residence in his absence, is therefore at a disadvantage.

    An influx of wealth keeps the pound buoyant. But, many countries go to great lengths to achieve just the opposite. They wish depress the value of their currencies to help their exporting industries. Who’s right about that?

    We need to recognise that ultra rich people don’t usually come to Britain to spread around their wealth. They may use that wealth constructively but there’s no guarantee about that. They usually keep a very low public profile, instead using their money to spread their influence rather than direct argument of what they wish to achieve. We need to ask if that’s a good thing too!

    Reply An influx of money from abroad may be needed to offset the balance of payments deficit, and does not necessarily raise the value of the currency. We had a large devaluation after the crash with substantial inflow of money at the same time.

    • Narrow Shoulders
      Posted April 9, 2015 at 5:48 pm | Permalink

      Reply to reply

      We could pursue other means of tackling the balance of payments deficit like making things here. Your answer would have been better qualified by “in the short term while we rebalance the economy towards manufacturers and IT”.

    • Bazman
      Posted April 9, 2015 at 6:20 pm | Permalink

      Many are tighter than Scrooge and are only here to launder money John a point seemingly lost on you and many others.

      • libertarian
        Posted April 9, 2015 at 9:44 pm | Permalink

        Bazman

        Yeh of course the foreign owners of TaTa steel , Jaguar Cars, Nissan, etc etc are tighter than scrooge only employing a few 100,000 people and generating revenues of £290 billion blimey why would we want them here?

        • Bazman
          Posted April 11, 2015 at 7:50 pm | Permalink

          How many are here laundering money with no benefits to anyone but themselves though? You are telling us that the benefits of this out weigh the disadvantages or is it just apologist nonsense?

      • Edward2
        Posted April 10, 2015 at 8:02 am | Permalink

        Yes like an Indian billionaire non dom who has invested over one billion in a UK car company as a result of living here.

        • Bazman
          Posted April 11, 2015 at 7:51 pm | Permalink

          He would not have done had he not been allowed non dom status being your point? Simplistic argument.

          • Edward2
            Posted April 12, 2015 at 7:51 am | Permalink

            It is indeed a simple argument.
            Fair tax treatment encouraged this family and many others to come here and invest.
            The government’s open for business attitude helped and these people have created many jobs.
            They have also created a positive effect worth several billions per year to the UK.
            Labour want to stop it.

          • Bazman
            Posted April 13, 2015 at 6:33 am | Permalink

            Not fair for the rest of us who cannot have non dom status, but maybe I am just jelous of the fact that I have to pay my fair share and hey have also created a positive effect worth several billions per year to the UK is questionable some may have, but many may have had a detrimental holiday home effect on the UK especially London and surrounding areas. The UK is not desert island of brass plate companies.

  17. Denis Cooper
    Posted April 9, 2015 at 11:03 am | Permalink

    “Most of us agree the rich should pay more, and that income tax should go up with income level.”

    Maybe most of us would agree with those two propositions, but I don’t necessarily agree that the income tax RATE should go up with income level.

  18. outsider
    Posted April 9, 2015 at 11:12 am | Permalink

    Dear Mr Redwood, Election campaigns are rarely elevating but it is still depressing that Labour, the SNP and others are still playing up the illusion that the welfare state, particularly health, education, unemployment pay, child benefits and housing subsidies, can be paid for by anyone other than ourselves, whether those others be high earners, rich foreigners or the English.
    The better off could probably fund the lion’s share of the basic state functions such as law, defence and administration OR the better off could fund redistribution to the absolutely poor, but even the top 25 per cent, though contributing proportionately much more, can never fund a full welfare state.
    This illusion will persist, however, unless and until something like the reforms suggested by Frank Field are enacted. They are not even on the agenda.

  19. DaveM
    Posted April 9, 2015 at 11:21 am | Permalink

    Interesting (if slightly predictable) post today, Mr Redwood.

    I’m more peeved that my medium earnings are taxed to the hilt, but hey ho. I’m even more peeved at what happens to those taxes.

    But regarding yesterday’s electioneering and non-doms, etc, I think I speak for a huge percentage of the population when I say ” I don’t care”. If I was super rich I’m sure I’d find another country to live in if I was going to get punished here.

    Far more interested in other issues which actually affect me.

    • Narrow Shoulders
      Posted April 9, 2015 at 5:50 pm | Permalink

      Spot on about the middle earners being taxed to the hilt.

  20. Atlas
    Posted April 9, 2015 at 11:40 am | Permalink

    … you can tell there is an election very soon, as the bidding wars to who has the best magic money tree reaches new levels …

  21. Mike Wilson
    Posted April 9, 2015 at 12:34 pm | Permalink

    I don’t give a toss if rich people want to live here.

    It seems to be impossible for our endlessly incompetent governments to devise a tax system where – if the money is made in this country, tax is paid in this country.

    If a Russian oligarch makes billions from oil businesses in Russia – and pays tax on the money in Russia – I see no reason to soak him for more tax if he lives in the UK. There should be a simple fee – a flat tax – to cover the use of services generally.

    I do care if rich people from abroad live here and start buying up our property. I don’t see why any foreigner should be able to own more than one property.

    • JoeSoap
      Posted April 9, 2015 at 5:50 pm | Permalink

      Hang on. If you or I make billions from oil in Russia we pay taxes here if we live here!
      Are you for one rule for some and not for others?

      Either we all pay tax on our worldwide earnings, or we all pay tax on remitted earnings only. Make the choice and live with it-don’t make exceptions for the privileged but not necessarily gifted.

      • JoeSoap
        Posted April 9, 2015 at 5:52 pm | Permalink

        By the way elsewhere in countries with bilateral tax arrangements we still pay tax here on the DIFFERENCE between what we pay elsewhere and what we would pay here, and this too should apply to so called non-doms, or it shouldn’t apply to any of us!

    • Bazman
      Posted April 9, 2015 at 6:27 pm | Permalink

      If they then cost you money by pushing up house prices starving the economy of indirect taxes paid by all and in some cases getting away with council taxes you will not give toss about that? Why a Russian oligarch who makes billions from oil businesses in Russia wants to live in London? You probably do not give a toss about that either telling us that you do not give a toss about the UK and etc ed

      • JoeSoap
        Posted April 9, 2015 at 8:05 pm | Permalink

        Or, for the succinct argument for your case:
        Should overseas folk who don’t pay the same rate of tax as the rest of us still be able to live here and buy up our real estate? The logical conclusion in 50 years time is rich Russians/Chinese buying up every house in the land and renting it back to poor hard working UK taxpayers, with the proceeds of the sales having gone to the government in IHT, so not passed down to future generations to afford their parents’ houses.

        • Bazman
          Posted April 11, 2015 at 7:56 pm | Permalink

          Many just speculate on prices never even seeing the property or even renting it out. Often the British are not even given the opportunity to buy, so pushing up prices for all. This is OK by you. Many use property as bank vaults and to hide money from their corrupt activities so they are not only ripping off their own citizens, but causing problems f0r ours. You on the other hand would not be allowed to buy property in their countries and in the case of Russia nobody is even allowed to own land. What are we. Mugs?

  22. ian wragg
    Posted April 9, 2015 at 1:00 pm | Permalink

    Forget the non – doms. Lets start to recover some of that 100 billion barrels of oil under the Weald Basin.
    If this gets under way, apart from reduced power prices we can all get a tax cut.
    We may even be able to reduce the deficit and pay off some debt. That’s providing we can get a decent government and not a bunch of left wing LibLabCons.

    • bigneil
      Posted April 9, 2015 at 11:44 pm | Permalink

      Tax cut? -don’t be silly -DC would use the income to fund thousands of free lives for yet more non-working/contributing immigrants.

  23. Sir Graphus
    Posted April 9, 2015 at 1:03 pm | Permalink

    One of the odd quirks of the non-dom debate is that non-doms, apparently, create wealth by their spending and investments, so it would be madness to tax them directly. For we folks of the middle classes, though, we, too, collectively, could create wealth by our spending and investments, but apparently, no, we must give copiously to the state, so that it can spend it for us.

    The odd quirk about the tax-the-rich debate is that most people define rich as “having more than us”. Thus politicians spout rhetoric like “make the rich pay”. It is always a shock to learn that when “rich” is actually defined, I’m down to pay a pretty huge chunk.
    Reply On the contrary, the aim is to tax the non doms on allwealth,earnings and savings they make here!

  24. REPay
    Posted April 9, 2015 at 1:57 pm | Permalink

    I and my wife are currently considering returning home from New York.

    If we do so we will be paying a huge amount of stamp duty to buy a property, though we will be careful not to buy a place like our former London property which might attract a mansion tax. (We know several elderly people who will have to sell up their lifetime homes if Labour’s tax comes into force.) We will also be paying a UK top real rate of tax of 61% – 66% if the 50% band is reintroduced. Our ability to save for our retirement has been reduced since we left and we, like many, expect Labour to raid private our pension funds on the grounds that people who have saved hard are easy targets.

    Apparently all tax payment is not enough to escape the invective from the Labour Party against the rich (whoever they are) and Londoners. The last Labour government recognized the importance of London for their desire to spend; they tinkered with its regulation and looked the other way when the tax receipts rolled then turned on it to stick the blame on bankers for government profligacy and use the success of London to account for problems elsewhere in the country.

    The Labour Party’s communications are very effective. We, and many expats we know in London who all pay UK taxes, are getting the clear message that people like us are not really welcome in the UK.

    • JoeSoap
      Posted April 9, 2015 at 6:04 pm | Permalink

      Not certain whether to feel sorry for you or not.
      If you work for one of those companies which has chosen to import cheap labour from Eastern Europe, driven down wages and now the low paid are taking their bite of the cherry by voting Labour I would say – tough luck, you had it coming.
      If you work for a bank like RBS, Lloyds which has been propped up by the state, which is now having to pay the bill by taxing us to the hilt I ‘d also say tough luck you had it coming.
      If you’re an entrepreneur, or self-made, then I’d just ask why come back? Whether the Tories or Labour get in, you’ll pay higher business rates than when you left, and likely higher CGT than most places in the developed world. You’ll pay a bank 5-8% to borrow money that they’re borrowing at 0.5%. The income tax you know about. The property prices and stamp duty you’ll know about (oh and when you buy business property you’ll pay stamp duty on the VAT too)!

      When you leave it to your kids you’ll pay IHT at 40% on all but a pittance.

      Still interested in returning?

      • REPay
        Posted April 10, 2015 at 2:33 pm | Permalink

        No need to feel sorry for me.

        It is Miliband and Labour’s “tricoteuse” tones that I most object too. The (comparatively) well off expect to pay more, we just don’t expect to be treated as though we are criminals.

        RE IHT I will be leaving all my money to the places that educated me. I suspect they will spend it better than the government.

        • Lifelogic
          Posted April 10, 2015 at 6:54 pm | Permalink

          To people like Cameron and Cable all people in business are treated as criminals, potential criminals, worker bees or cash cows.

  25. margaret brandreth-j
    Posted April 9, 2015 at 3:05 pm | Permalink

    The niggle here is ..Do we creep to the rich who already have the power in financial terms?

  26. Hefner
    Posted April 9, 2015 at 5:53 pm | Permalink

    According to HMRC, the UK has roughly 30 million taxpayers. A bit more than 1 percent of us pay the higher 45 percent tax rate (income over £150,000), i.e., 300,000 people. They contribute roughly 30 percent of HMRC revenues. Of those roughly 100 to 120,000 appear to be non-doms.

    In addition to the well-known and commonly used ISAs and SIPPs, annual investments in VCTs, EISs and SEISs are each limited to £200,000 / year. These last three investments actually contribute to the development of start-ups, which might become future success stories. All three vehicles allow a 30 percent tax relief in the year of the original investment, are not subject to CGT and offer (possible) tax-free dividends. All these are available to all UK-based taxpayers (if rich enough !).

    To me, it is quite clear that there is a marked difference between the well-off who use these tools and the non-doms who will pay up to £90,000 not to have to declare their earnings abroad.
    The US tax-regime is much more sensible than the UK one, in a sense still reeking of 18th century privileges, as the US is taxing all revenues wherever they are produced (Ask Boris Johnson about his experience of it, as a former US citizen).

    To me, and contrary to the assertions largely developed on this website today, which tend to happily mix up the well-off and the non-doms, the well-off people investing in the three tools described above are much likely to be “financing” the development of UK plc than the self-preserving non-doms.

    • JoeSoap
      Posted April 9, 2015 at 8:11 pm | Permalink

      A good point – why not expand these tax breaks, to help the UK economy and get rid of non-dom status – if they are seriously interested in investing in the UK that would be their vehicle. £90’000 as an annual payment to the government who will mis-spend it anyway is neither here nor there.

  27. Will H
    Posted April 9, 2015 at 5:55 pm | Permalink

    Instead of constantly trying to increase tax revenue the government should be making a real effort to cut out the vast amount of waste of our money, starting with foreign aid and EU contributions. As Welsh Secretary I believe you returned a large amount of the budget to the treasury unspent, couldn’t you show them how it’s done? O for some cabinet ministers with that attitude now!

  28. rick hamilton
    Posted April 10, 2015 at 5:30 am | Permalink

    To me the most depressing aspect of this pre-election hysteria is that the discussion is all about how the national cake is to be divided. There is nothing from the main parties about how the UK is going to earn its living in the 21st century and how the cake is to be made bigger, thereby increasing standards of living for all.

    The Japanese government some years ago listed nine areas of technology in which the country would aim to become a world leader. Nanotechnology, biocomputing, robotics and so on. Taxpayers money would be directed towards R & D in all of them.

    I doubt the UK leadership has the slightest clue how to back science and technology but I will be pleasantly surprised if anyone can tell me.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page