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The truths they don't want you to read....

Wednesday, February 13, 2008

Taxation and politics

Two very interesting taxation stories appeared just above the radar, sending complementary but confusing messages about Labour's stance on equality on taxation.
    The "super rich" should pay 10% more tax on earnings over £150,000 or give the same amount to charity, senior Labour MP Frank Field has proposed.
Oblivious to the fact that as it stands donations to charity can reduce your tax bill in any event, this appears to be a way of proposing a 50% tax rate on the 'super-rich', which will not get shot down in flames by the Treasury.

To get the support of the Socialists, Frank Field quotes their heroine:
    Mr Field said the idea came from a conversation he once had with Baroness Thatcher
But the idea was knocked down by the senior partner at Grant Thornton, Chartered Accountants:
    Mr Warburton said many of his company's wealthy clients would welcome the chance to put something back into society - provided it was not through the tax system, which they saw as wasteful.
So presumably their less wealthy clients don't see the tax system as 'wasteful'?

Of course this is a non-runner, as the attitude of Labour towards equalising the tax burden and that old discredited concept of "From each according to their abilities, to each according to their needs" has moved from listening to the words of Karl Marx to those of his brother Harpo.
    The Treasury has been accused of climbing down over its plans to tax wealthy foreigners living in the UK, after it moved to clarify its position.
No accusation, this IS a climb-down as a result of extensive pressure from the super-rich, who saw this as the first step towards them having to pay some tax, somewhere. The crawling continued,
    Under the government's plans, wealthy non-doms will be eligible to pay a flat £30,000 in tax a year - once they have lived in the UK for seven years - or else sign up to the existing British tax structure. "We don't need to know the detail of people's worldwide income if they are going to be paying the £30,000," said Ms Cooper.

In other words, if you can persuade the Inland Revenue that you actually reside in Fiji, or Russia or the moon and are only temporarily in the UK for a decade or three, then you can pay £30k and no questions are asked. Questions like do you pay any tax anywhere in the world?

Meanwhile, the poorest face punitive 67% tax rates ....

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