50 pence tax? scrap it! Tax em more!

One issue I’ve been meaning to comment on is the current flap about the 50p tax. To the right wing it’s a silly well meaning socialist tax that costs the country more money than it earns. Chancellor George Slimy…sorry! George Osborne ;D say’s he has it under “review”and thinks its temporary. Reading between the lines I think the Tories would like to ditch it as a concession to their Eton buddies for going into coalition with a load of fluffy liberals. Unfortunately those fluffy liberals would likely walk out of government rather than sign up to such an agreement. Currently the Treasury has a review on-going to try and work out how much revenue the 50p tax actually raises and its promised that the Tory’s position will be based on this review’s outcome.

My position is that yes if it comes out showing that it raises sod all in tax, yes maybe we should get rid of it…and replace it with something stronger! The top 10% of the UK’s wealthy own 50% of the nation’s wealth and the top 1% own 21% of it, so clearly we just aren’t taxing them enough.
http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#Wealth

Now, as I stated in prior article, we cannot tax ourselves out of the current economic predicament. Some rise in general taxation, some austerity measures across the board are all part of the package of measures. But certainly, getting the rich to pay more tax is an important part of the solution. A higher “supertax” for wealthy individuals is one option, or a simple “wealth tax” would be another idea. More importantly, the key argument the Tories put forward is that if you tax the rich too heavily they’ll flee abroad (Question, Can we pick the country they flee too? I propose Somalia, they’d like it there, nobody pay’s taxes…tho they do have to pay for the AK-47’s and body guards :D). Phil Greed (sorry typo there its Green :>> ) already runs Top-shop, and many other UK stores from Monaco and dodges maybe a billion or so a year in tax. Again there is a simple solution here, tax such non-doms more rigorously. Require that anyone with a British passport (which I assume includes Phil Green, and if he doesn’t why is tax dodging foreigner a government advisor?) has to file for income tax in the UK regardless of where he lives. Or than anyone regardless of where they live or work who earns more than, say £0.5m a year in the UK also has to file for and pay income tax (based on his UK based income).

Similarly most of these tax havens where tax dodging is performed form are UK dependences. i.e. you the British tax payer help support the very regimes that are helping billionaires dodge British tax. That needs to change. Only the brit’s would allow this to happen. If all the Irish billionaires moved out to the Arran Islands and set themselves up to pay no tax, we’d have the Irish army (both of them!) the Navy (see our flagship here) and airforce in like a shot. The UK needs to make it clear that they want to remain part of the UK or commonwealth they have to get with the program, else London will simply wash its hands of these islands, cease to support them in any way (insist that they pay for coast guard support, policing, health care etc., let it be known they UK no longer feels obliged to protect these nations from invasion or attack (so they’ll have to pay for an army), nor their many flag of convince cargo ships from pirates), and begin to make it difficult to do business (a penalty tax from the UK on anyone who holds assets in these tax havens, ineligibility for government contracts, or employment (like Green!), forbid sponsorship or participation in major national events, etc.) from these Islands. This would eventually make it harder for these states to maintain they’re low tax environment and make it more difficult for tax dodgers to take advantage of the situation.

Even those tax dodgers here in the UK will often have an army of lawyers working for them finding loopholes in the tax law. A simply heavy penalty tax to punish these guys when the lawyers screw up (which inevitably they occasionally do) and as the lib dems suggested today more rigorously inspecting the tax returns of the rich will go along way towards increasing the taxes raised by HM treasury.

Either way, as I’ve stated before its in the wealthiest peoples own interest to pay more tax, as they have the most to loose in the even of a major financial crisis resulting from a sovereign debt crisis. There will be no bail out this time!

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7 thoughts on “50 pence tax? scrap it! Tax em more!

  1. Warren Buffett wrote a piece recently, in which he said he would gladly accept being taxed billions, because he would still have billions left. The other billionaires, sadly, are not as sensible. What do they imagine will happen once they have captured all the money?

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  2. Sadly Daryan, this seems to me like a Express reader’s rant rather than a reasoned argument. Income tax revenues have dropped since the 50p tax was introduced. I’m all for the well off paying their fair share but all I can see is that this will incentivise entrepreneurs to go abroad when we, as a nation desperately need them here to create jobs. I’m one of those that’s caught by this tax. I’m not a tax exile, I pay tax from my own businesses though PAYE. I’ve created 450 jobs in the last 7 years and had to go through a lot of risk, pain, worry, long hours, social sacrifice and damaged personal relationships to get where I am. I’m tired of feeling that everyone thinks I should be punished for what I’ve done and for what I earn. It’s the politics of envy.
    I wouldn’t blame anyone for going to the US to set up their business. The top rate of tax there is 35% and their VAT equivalents 10%. Remember that 58% of all private sector jobs are in SME or owner managed businesses. Isn’t it time we stopped with the jealousy and started to think practically?

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    • It is a bit of rant, but you’d need to read some of the prior articles I link to understand what I’m driving at.

      The fact is we are all in a massive economic mess. If current trends continue several western economies, including the UK, could go bankrupt and the consequences of that are dire. In short, if you have any wealth, a pension, savings, shares, etc. kiss it all goodbye as the consequences of national bankruptcy could well wipe much of that out.

      To prevent this we’re all going to have to accept some changes. So austerity and cut backs in public spending are inevitable (I would however question whether the Tory cuts are focused in the right areas and query the timing of them). We’re all going to have accept new and higher taxes. Inevitably the wealthy, who actually pay less on an income basis than most people right now, are going to have to start paying their fair share, if not much more than everyone else seeing as they’ve more disposable income.

      Go abroad? Where are you going to go? You mention the US and its low tax. That’s precisely what worries me about the US. While the Euro is currently the most “at risk”. Longer term I would argue the US is in a much worse position largely because it has many expensive programs such as its military, medicare, farm subsidies and various other corp. pork barrel projects and it simply isn’t taking in enough in taxes to pay for all of this. Cutting these programs would be economically and politically painful, especially in Tea Party states (ironically enough!) or in many swing states, making such cuts little short of political suicide. If the US does not cut down its spending then they will have no choice but to raise taxes substantially to match this level of spending…or follow Greece into the Abyss.

      The PAYE you’re employees pay is a matter of them meeting their personal responsibilities as tax paying citizens. Arguing that just because you’re company collects lots in PAYE and that gives you some kind of special privileges is equivalent to a copper arguing that just because he catches hundreds of criminals he’s entitled to break the law himself. Or a bin man to decide that because he empties hundreds of bins every day he’s entitled to dump his rubbish in the middle of the street. Paying tax is a matter of personal responsibility. If you earn more you should pay more, unfortunately right now many in the rich man’s club pay less than or very little compared to the ordinary tax payer.

      Income tax revenues have dropped? Probably because there’s a recession and people are earning less, so less tax flowing into the gov’s coffers. Hence why I question the timing of current austernity measures.

      Long hours? sleepless nights? that makes two of us! welcome to the club! You talk about the woes of being a boss. My dad sits on the board of a small engineering firm. You know the first time he ever complained about tax was right after the Irish economy went belly up and the austerity measures kicked in. There’s a lesson there for you!

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  3. Pingback: Two things you can’t avoid: Tory lies and Stealth Taxes | daryanblog

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