The Tories are sorting out the wealthy tax-avoidant

[LittleFrieda]

members of our society. Why on earth did Labour fail to act during their long term in office? Eh? Eh?

I can't believe people are complaining about George Osborne doing something about it.

I don't - that's precisely my point, niceguy2. You read my comment about tax being for the little people.

You can't force people to behave morally or responsibly. It doesn't mean they shouldn't at least try.

If you can justify your bad behaviour by looking at those supposedly above you and can genuinely say they are no better than you, then that's your perfect excuse not to change your ways, that you don't get rich without being greedy, power seeking and selfish. That's why huge wealth should bring huge responsibility, because otherwise you enable the selfishness of an entire society (or world system). If we have to have hugely wealthy people, we need to have a good reason to look up to them, rather than using them as an example of how we too can get very rich and do what was like. At the moment, the only use they have that is advertised is that they accidentally trickle down a bit of their wealth to those beneath them (and everyone else is considered either beneath them or irrelevant....). That is not good PR.

And that's why my preference would be to have a low tax economy for all where the superrich would then not care about paying rather than continually demanding they pay more and driving them away.

They don't get driven away and they aren't as useful as they claim to be, either.

If Lakshmi Mittal didn't exist, steel would still be made.

When my parents died and we sold their house we had to pay several hundreds of thousands of pounds in inheritance tax. Although eye watering, I didn't object as it seemed fair enough.

A considerably wealthier friend is sorting out her Mum's massive estate and has managed to avoid, through odd trusts and other legal bits and pieces, nearly £3million in inheritance tax. All set up by lawyers AFTER her death.

It will always be in the richest's interest to avoid tax and they will always have the means to do it

You are quite right Rabbit, it would be just A.N. Other who would be making the steel instead of Mittal. Not sure what your point is.

Why encourage Mittal to become ever wealthier and run more and more of a monopoly? What benefit is that to anyone? Yet we do encourage him, in order to get him to stay. And the City of London makes a nice fat profit out of mergers and acquisitions.

There is not any rate of tax that the super rich would all pay happily, flat or otherwise. They will always take the same approach: keep some cash and property in politically stable countries with good infrastructure and a skilled workforce, even if they have a high tax rate, and risk some in countries that only have low or no tax going for them. They will not, of course, willingly contribute towards the infrastructure of the country they keep their cash in - that's someone else's problem. If people are scared away from this country, it's not the tax rate, it's problems caused by poor long term planning - overcrowding, no resolution of major issues in terms of long term energy supplies, water, roads, transport, an unbalanced economy and no firm idea on how to educate the populace and what skills are required. With a population as large as that of the UK, you can't become a specialist economy focusing on just one area (eg financial services), because however good your education system, you cannot ensure your entire population becomes good at just one thing, so you are just setting up a huge proportion of your population to be useless to the economy because of your stupidly poor planning. And a lot of useless people (who could actually have been engaged in productive work if properly used) are expensive, and generally depressed and unhealthy, and countries with huge inequalities are not, generally, attractive places to my mind, particularly not once they've lost their infrastructure. The problem with relying on attracting any old wealth into the country is that wealthy individuals are interested in retaining their wealth, not in helping you with the long term planning for your entire country.

Can't believe that people are arguing that the very rich make little contribution to the country. As well as the enormous tax revenue they pay, if they decided to up and leave and take their money with them, then our balance of payments would look very grim indeed.

Do we know how much the very rich contribute? I don't count all the top 10% as amongst those who could or would easily up sticks and live in another country. I for one am not planning to move out of the EU, or even out of the UK. The idea that 10% of the population is ready to leave and thinks it can set up elsewhere at the drop of a hat is somewhat far fetched. If I were to move out of this country, it would be because I don't like the inequalties and can no longer put up with the poor infrastructure and services any more, not because of my tax bill.

niceguy-

There are two types of flat tax, one which asks for a flat rate of tax, the other which asks for a flat amount.

Indeed, the rich would pay more under a flat rax rate, but then again 10% from someone who makes £100K is the difference between a medium-sized yacht and a large yacht, while 10% for someone on on minimum wage is the difference between affording to feed your kids or not.

So, no, not fair.

And I fully accept trickle down economics isn't perfect at all. Capitalism is a wasteful system. But i've said before, it's better than the alternative. I'd rather be poor in a capitalist trickle down economy than any socialist/communist economy. How about yourself?

You make about a half dozen errors in this paragraph:

a) The criticism is not that trickle-down economics isn't perfect. The criticism is that it is an utter failure. Wealth doesn't trickle down in this way. The graph of share of income shows this.

b) You equate trickle-down with Capitalism

c) You make the error that there is only one form of Capitalism: trickle-down. Whereas there are many different forms of Capitalism, some more egalitarian and civilised than others.

d) You equate socialism with communism

e) You think that a democratic socialist country exists; one doesn't.

To answer your question, I'd rather live in a social democratic country, like the northern european countries (Germany, Denmark, Sweden, etc.) where there is far less wealth inequality and poverty, and the health and education systems are public and to a very high quality. Though I agree, these social democracies are now under attack, as Capitalism infects everything like a disease and must constantly be fought against.

If I were to move out of this country, it would be because I don't like the inequalties and can no longer put up with the poor infrastructure and services any more, not because of my tax bill.

Agreed rabbit... agreed...

aiton-

Can't believe that people are arguing that the very rich make little contribution to the country. As well as the enormous tax revenue they pay, if they decided to up and leave and take their money with them, then our balance of payments would look very grim indeed.

Thirty Of America's Most Profitable Companies Paid 'Less Than Zero' In Income Taxes In Last 3 Years: Report

Many major corporations have managed to pay taxes at just over half of the corporate income tax rate, according to a new report.

Nearly 300 of the nation's most profitable companies paid an average tax rate of 18.5 percent from 2008 to 2010, less than half of the 35 percent corporate tax rate, according to a study by the Citizens for Tax Justice released Thursday. Of the 280 companies, 78 studied paid a tax rate of zero or less during at least one year of the three year period.

And thirty companies, the report says, had a negative income tax rate from 2008 to 2010, even though they took home a combined $160 billion in pre-tax profits.

www.huffingtonpost.com/2011/11/03/major-corporations-tax-subsidies_n_1073548.html

The situation, you can be sure, is little different in the UK. Amazon was recently in the news in the UK as having paid NO tax at all to HMRC in the past tax year.

Rabbit, look here: BBC News Link

As you can see, the top 1% make up nearly 25% of income tax. I assume if they sell any shares etc they'd also pay capital gains on that.

The facts are quite simply the rich pay the most of our tax, either in terms of percentages or real amounts.

There are only a handful of the ultra filthy rich billionaires. Raising taxes on them to even more punitive levels than already does more harm than good. It does virtually nothing to help our deficit or national debt and encourages them to employ more tax avoidance measures.

Amazon was recently in the news in the UK as having paid NO tax at all to HMRC in the past tax year.

Again you are being economical with the truth. A more factual statement would be that "Amazon was recently in the news in the UK as having paid no corporation tax at all to HMRC..." And why would they? As you well know, Amazon operates within the EU from Luxembourg. So they pay taxes on their profit there. Just in the same way that Rolls Royce would pay their taxes in the UK and not Luxembourg.

Amazon do however pay VAT to HMRC on everything they sell, provide vital employment to UK citizens whom then are able to pay income tax and use the services of other UK companies (eg. delivery companies).

The principle of the EU is that any European country is free to trade with another and isn't taxed any extra for operating in another EU country. The solution is for the EU to adopt a unified corporation tax rate. Good luck with campaigning for that. Although I'd support your cause.

'niceguy'-

The facts are quite simply the rich pay the most of our tax, either in terms of percentages or real amounts.

Firstly, the share of total tax revenue has shifted away from corporation towards individuals during the 20th Century. Corporations used to pay the majority of tax. Now they pay a minority.

Secondly, as I've pointed out a few times already (why do I have to keep doing this with you?), the richest pay the most income tax because they grab the largest share of the total income.

The problem isn't high taxation (with marginal rates being at a historical lowpoint), but income inequality. If you want more people to pay more tax, then they need to actually have a large enough income to contribute substantially.

If you have 5 people earning £1,000,000 per year and 95 people earning a minimum wage of around £12K per year, it's no use complaining that the 95 contribute very little towards total tax revenue. They have very little to pay.

This is exactly the situation Western Capitalist economies find themselves in today. We've become a low-wage economy with gross wealth inequalities...

...and then we have 'niceguy's like you who complain the poor aren't paying their share, when corporations increasingly pay no tax and the poorest earn little or no taxable income because they're so poor.

The facts are not that, niceguy2, as the article you have linked to states in black and white. They pay nearly 25% of income tax, but that's just one tax, for a start. And given that the richest 10% earn more than 100 times that of the poorest, it doesn't actually seem like a huge share for them to carry to me, given the huge benefits they receive from living in a country that allows such inequalities. It's all just pathetic statistics used to bat one argument about or another. The fact is, one human being is not in all fairness worth that much more than another and to argue that it is remotely fair, or that the richest are paying a fair share, or that it is fair to reduce the tax burden for the richest, is just silly. There is absolutely nothing fair about it.

Ttosca. OK, so what you are saying I think is that you believe that corporations should pay the majority of taxes instead of the individual. Am I correct?

If so then that is only realistic if the major economies of the world worked together and made sure they all have similar rates of tax. Until then we now live in a global world and we must change our policies accordingly.

I haven't complained the poor don't pay enough. I don't hear anyone complaining of that at all. If I say the rich pay enough, it doesn't mean I think the poor should pay more. What we need to do instead is spend less and live within our means.

I'd rather be poor in a capitalist trickle down economy than any socialist/communist economy. How about yourself?

Are you really sure about that, I don't think you have ever known true poverty to even say that.

This is poverty, in the mother of all capitalist countries.

We need to spend less and live within our means Maybe that is an option for you, it isn't for everyone.

The rich pay the greatest percentage of all the revenue from tax, despite finding cunning ways to avoid it, we know that. There is such a huge inequality of income. I would agree with a flat rate of tax, ie percentage if we had less inequality of income and higher levels of employment. Not only are wages falling but unemployment is rising, so in time I guess the percentage of tax raised from the top 20% will increase, it will have to unless we are happy to step over people sleeping on our streets, dying of treatable conditions and eating out of bins.

Apparently, mansion selling is boom time in London and close-by counties. Many foreign investors - why here? Does this help our economy? I'd be interested to know how our system benefits, how much stamp duty comes our way - I wonder if this is the reason for the mansion tax , that all this foreign investment does not reach our coffers and pushes up prices for the average and middle - class wage earner.

Does anyone have figures about this?

I think stamp duty is frequently avoided altogether on multi-million pound purchases of London mansions. It is fashionable to spend obscene amounts of money on things if you are exceptionally wealthy - ie to buy yourself a status symbol. It certainly isn't fashionable to crow about how much tax you can afford to pay, or how you are propping up an entire country as a result of your tax bill. Of course, you could always claim you are employing a score of servants on a few thousand a year each, many of whom won't be from this country originally, because people from your home country are cheaper and speak your language, and that you are responsible for the employment of a few shop workers in the better establishments near your mansion. And of course, you will have well paid local tax advisers, accountants, lawyers and other well paid hangers on advising you how to avoid paying anything you don't find to be personally fun or rewarding, and to advise you how to move the local beggar on to another area. And one or two artists might also love you to bits. And local auction houses. And foreign businesses who ship in stuff for your house when you want something more exotic than that offered locally. And of course, it's so easy to take over businesses and football clubs altogether in the UK. We really are very friendly to people who buy up our businesses, even if they ultimately ship them out. Because we think we'll be able to persuade them to hand over some of their cash to us, if we fawn all over them, flatter them and show them how to get what they want without the burden of a tax bill. The fact that they are just as likely to shit all over us and then flounce off elsewhere is irrelevant - we think we can run a master-servant economy and that this is desirable. A sort of return to an aristocracy, only without the good manners.

Mini, I have thankfully never experienced true poverty and I hope you never have either. I have however seen it first hand having been to many countries in many continents as part of my job.

Of course poverty exists in western countries but at least we have a decent support system in place, guaranteed freedoms and do not live in fear of repression. Well maybe except America. They may have their constitution but there's virtually bugger all help for the poor. That's something I do dislike about the country despite it having many admirable traits.

Niceguy2, do you think that percentage of all tax revenue raised from the top 20% will increase over time? Will this translate to more overall revenue raised through taxation and a better system of redistibution?

I do because those at the bottom are either having wage freezes or losing their jobs, that's without factoring in that wages haven't risen in line with inflation since the early 70's. That's is the real reason people have borrowed.

No, thank you, I haven't lived in such poverty but I am concerned that others do.

Thank you rabbitstew for your take on buying up mansions.

However, I still am interested to know why foreign investors are buying our properties when our economy is not growing. I don't fully understand the attraction to those investors - are there really some gaping loop-holes?

please don't assume that loathing the Tory scum current govt results in inevitable support for New Labour. It doesn't. They support the same free market economics that got us into this shit in the first place.