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Where will the rich people and the businesses go?

(27 Posts)
ojalele Wed 17-May-17 14:53:21

I have read on several threads that if taxes on the wealthy and on business are raised, then those people and their business will leave the UK.

So where will they go? I believe that the UK has relatively low taxation rates (compared to mainland Europe at least).

And if the UK has a relatively low tax rate, why are rich people from across Europe not all living in the UK? Could it be that people generally prefer to stay where they are and will put up with paying more taxes? And if so, isn't it a good thing to fund public services that are clearly struggling?

TheNaze73 Wed 17-May-17 18:06:07

USA, Switzerland, Middle East.

ssd Wed 17-May-17 18:08:44

They won't go anywhere, they have good accountants.

Don't listen to this nonsense.

AnnasBella Wed 17-May-17 18:11:47

They won't go anywhere.

It's just throwing toys out of the pram. We've been squeezed beyond belief for the last 5 years, it's someone else's turn

Kursk Wed 17-May-17 18:19:50

USA, Trump would probably welcome businesses if they will employ Americans.

Either that or register the business in Isle of Man, or some other tax haven.

I half expect the EU to offer tax brakes to businesses that move to the EU as part of thr Brexit deal.

From watching a lot of threads on MN over the past couple of weeks. It seems clear that the poor are fed up, the rich are fed up and services are crumbling due to a excessive population and massive government waste.

ssd Wed 17-May-17 18:31:55

why are the rich fed up confused

Kursk Wed 17-May-17 18:36:55

From whatIhave seen, poor are fed up with getting kicked about, rich are fed up with being blamed for there success/ wealth etc.

In reality it's the government that is failing everyone

cejay Wed 17-May-17 21:26:47

Businesses come here because we have a healthy workforce due to free healthcare, we are relatively safe due to paying for police and we have a literate workforce and infrastructure. The more the Tories destroy this infrastructure, the less productive we become and businesses will leave anyway. Also, small businesses will benefit from having fair competition if we tax multinational properly.

amicissimma Thu 18-May-17 15:52:34

I've met some uber-wealthy people over the years and heard about some from other people who know them. They tend to have homes in various countries. They consider the best education is British public (private) schools, but because they move around a lot, their children tend to board. If they are UK tax payers it is because they have chosen to be. In order to 'move' as individuals they simply have to ensure they spend fewer than 90 nights per year in the UK. In general they probably spend quite a lot of time out of the UK, so this is a minor adjustment.

What I have learned from them is that UK nationals tend to prefer to pay tax and support the UK, even if that disadvantages them slightly, but they all have a point at which they regard the rate as too high and switch to another country.

I understand that the UK is a good place to do/base business because we have a good, stable, centuries-old and impartial legal system and a reliable financial system. Again, if the tax price rises too high, they will look elsewhere and simply move their HQ to a branch elsewhere and put up with a legal/financial system that requires more effort. As to where they go, it depends on where they also have interests/ties: familial or business.

For the very rich, who contribute the most financially, moving is a relatively small administrative matter, nothing like the upheaval it would be for most of us.

amicissimma Thu 18-May-17 15:57:07

"And if the UK has a relatively low tax rate, why are rich people from across Europe not all living in the UK? "

Apparently London is the sixth-largest French city (in terms of population). The Lycee has recently had to open a new site to accommodate the increased number of students.

ApricotExpat Thu 18-May-17 16:07:01

Switzerland, Lux, Dublin, Frankfurt and Paris - if they want to stay in Europe.
Otherwise Singapore, Hong Kong, BVI, Middle East etc.

LightYears Thu 18-May-17 17:09:04

Maybe they could start a new colony on Mars.

imablackstarnotapopstar Wed 31-May-17 08:22:36

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

Badbadbunny Sat 03-Jun-17 16:42:09

I thought we had a shortage of doctors because they were emigrating to Australia and Canada?

How will a marginal tax rate of nearly 70% help to keep doctors and dentists in the UK?

Corbyn's proposals to hit the "rich" will just mean more and more dentists and doctors will go part time, retire early, or emigrate as they won't be happy with a marginal tax rate of nearly 70%.

namechange20050 Sat 03-Jun-17 16:43:49

Our doctors leave because we don't pay them enough.

JimmyGrimble Sat 03-Jun-17 17:09:47

So Labour will increase Corporation tax to 26% by 2020 but this is still less than it was in 2010 (28%).
Currently we have a Corporation tax of 20%. One of the lowest in the G20.
The Tories would have us believe that in doing this they have created jobs and been responsible for wealth creation.
However - 80% of the jobs created have been low paid (many zero contract) jobs where people earn less that £7.95 an hour.
*A few questions*:
If lower Corporation tax was going to 'trickle down' and improve general standards of living wouldn't we have started to see an effect by now? Hint - We haven't
If lower Corporation tax was going to impact on public services positively why are we looking at a chronically underfunded NHS, education system and social care?
If those same corporations are genuinely going to go elsewhere where the fuck would they go?
Corporation tax in UK under Labour - 26%
Corporation tax in US - 40%
If they were looking for a Corporate tax rate of less than 26% they would need to go to:
Indonesia, China, Russia, Saudi Arabia, Turkey or Korea - all of which have their own political and economic problems.
It's flannel. They're not going anywhere.
Who's got a magic money tree?

Crumbs1 Sat 03-Jun-17 17:18:44

Only places they'll go will be Mustique and Whistler on holidays.

elevenclips Sat 03-Jun-17 17:34:44

Taxing these people won't help. There just aren't enough of them. They can go anywhere they want.

JimmyGrimble Sat 03-Jun-17 17:49:58

If you're talking individuals rather than corporations yes they can. And let's not kid ourselves, they're already avoiding tax and using offshore accounts.Making more profits for people like Theresa May's husband (why is that not a scandal BTW?) Why would we miss them exactly?
If they stay we should pursue them aggressively for the tax they're not paying.

tiggytape Sat 03-Jun-17 17:53:32

Many won't go anywhere - they will just rearrange their financial circumstances should any particular policy cause them real loss:

In high taxation periods of the past people stopped taking dividends. The wealthiest can simply opt not to take any salary in some years and live off what they have or sell assets that attract fewest penalties to live off.

Or they can make a loss and pay not tax at all - many accountants advise clients on hoe to (completely legally) make the most of offsetting losses so that they aren't actually making a paper profit.

People can drop down to 4 days a week so that they don't earn over the cliff-edge limit whereby they see barely anything from every extra £1 they make.

They can pay more into their pension rather than take it as salary.
They can refuse a promotion or ask for other perks rather than taxable ones.

They can (legally) declare that they are a limited company (as long as they take measures to meet the criteria for this as some doctors did when their tax rate was affected). You then pay yourself (and possibly a business partner) just under the higher tax rate and let the rest of the money build up (companies can be liquidated in the future).

Companies if faced with very high wage bills can make people redundant.
Companies faxed with rising corporation tax can make people redundant, move parts of their operations elsewhere looking at rates for those operations or put up the prices they charge consumers to offset their losses.

If you are rich you have a lot of options that aren't open to low and middle earners and you can afford to pay for advice to legally make the best of a difficult period.

tiggytape Sat 03-Jun-17 18:02:48

I'm not advocating any of those as a moral option but avoiding tax is legal whereas tax evasion isn't.
Where taxes are raised by a small amount, people generally grumble but pay up. It is a huge hassle to rearrange your entire business or personal finances.
But where potential tax bills are going to increase significantly, more people legally avoid paying that additional tax and do make the effort to rearrange things to lower their liability.

That is why, beyond a certain point, raising taxes doesn't bring in more money. And it is why organisations like the IFS looking at Labour's costings for example have pointed out that the tax raised initially is likely to go down as people adjust (i.e. avoid paying it). Behaviour changes when taxes rise above a certain point.

JimmyGrimble Sat 03-Jun-17 18:15:30

Yes but in terms of Corporation Tax an increase to 26% still puts us at lower than 2010 levels and sill makes us one of the lowest in the G20. So where will they go?
The only countries lower than the UK would be:
Indonesia, China, Russia, Saudi Arabia, Turkey or Korea - all of which have their own political and economic problems.
They say they will leave but it's just a rather cynical attempt to influence voting and hang on to their tax breaks. Disgusting really.

PelvicFloorTrauma Sat 03-Jun-17 18:17:34

We are looking at parts of Europe or the Middle East. Other people we know are house hunting in Singapore and New York. After the last election I was amazed by how many of our friends and my husband's clients admitted to having made contingency plans. If taxes go up to levels described in papers then we won't be able to afford to live here. Will be a massive upheaval but there will be no alternative for us.

tiggytape Sat 03-Jun-17 18:42:35

Yes but in terms of Corporation Tax an increase to 26% still puts us at lower than 2010 levels and sill makes us one of the lowest in the G20. So where will they go?

Unlike 2010 however, we will also be facing:
1.Brexit - potential loss of trade without tariffs so potential loss of custom and / or increased price of components and raw materials
2. Increased minimum wage to £10 which will be a real burden for many companies

And these companies won't necessarily go anywhere else. They may simply lay off staff. Or put up their prices.
There's a fine line between wanting to hang on to their tax breaks (big companies who will have enough flexibility to hang on to them no matter what) and facing bankruptcy (smaller companies whose margins are too tight to absorb a triple whammy of Brexit price rises + wage rises + more taxation)

Thiscantreallybehappening Sat 03-Jun-17 20:44:58

My DH has already applied for a position in Canada. This is a massive upheaval for us but we can't and we won't pay anymore tax in this country.

If Labour are elected next week or we have a hung parliament we will go and that is not bullshit. Yes, my DH is in the top 5% of earners. He already pays a high proportion of tax. We do not have a luxurious lifestyle and we have to plan for meals out at birthdays etc. My children go to a state school, we do not have private health insurance and we have one modest holiday a year. Ed Conway on Sky news did a section of how much tax high earners paid and it showed that they do already pay a substantial proportion of total tax.

The thing is Rebecca Long-Bailey said in the spin room at the end of last night's Question Time that there were "initial" tax increases in the Manifesto. There will be more, there must be to fund everything. In addition to this there will be the Land Valuation Tax and the Wealth Tax and we simply are not going to stick around to lose everything we have worked so hard for.

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