2/3 of millionaires leave Britain to avoid 50% tax

[Coito ergo sum]

http://www.telegraph.co.uk/news/politic ... -rate.html

Oddly, this will be hailed as a success by some, because by the millionaires leaving, the statistics will reflect a leveling out of the wealth ratio. It will be hailed as making the country more egalitarian, despite nothing changing for most of the population.

[Tyrannical]

And some started to move back when the rate was dropped to 45%.

But should the super wealthy be able to freely relocate to avoid high taxes while still controlling their empire from abroad?

[Robert_S]

And some started to move back when the rate was dropped to 45%.

But should the super wealthy be able to freely relocate to avoid high taxes while still controlling their empire from abroad?

Should they even be allowed to own property in countries where they do not live?

[Coito ergo sum]

And some started to move back when the rate was dropped to 45%.

But should the super wealthy be able to freely relocate to avoid high taxes while still controlling their empire from abroad?

Should they even be allowed to own property in countries where they do not live?

I would imagine so, since I can guarantee that if the US tried to enact a law preventing furreners from owning property in the US, it would be deemed racist. Probably it would be hailed as perfectly reasonable for Yerpeens and racist for Merkins.

But, tax is payable on property in Britain regardless of who owns it (property tax), and if it's not paid then the gubmint can just lien the property an take it. But, income tax is not on property - it's on income.

[MrJonno]

There has been discussion of a mansion tax, ie far higher property taxes on £ million + houses, perhaps those taxes should be higher if the owner isnt resident in them (generally stupidlly at the moment they are lower!)

[Cormac]

Britain has signed up to international trade agreements on the free movement of capital and the free movement of people.

These are foundations of the massive success of the City of London, which is by far the biggest single contributor of revenue to the state.

these are important principles for driving investment and entrepreneurship. Conversely, restrictions and punitive taxation will always cause capital flight. This is not rocket science, but something that the left never seem to grasp. A golden goose needs to be nurtured so that it continues to give moderate golden eggs - not spatchcocked and barbecued to give one delicious but short-sighted meal.

property taxes are probably the stupidest taxes ever proposed. Utterly utterly dumb.

[Tyrannical]

And some started to move back when the rate was dropped to 45%.

But should the super wealthy be able to freely relocate to avoid high taxes while still controlling their empire from abroad?

Should they even be allowed to own property in countries where they do not live?

Interesting point since only Mexicans can own land in Mexico
I know US-expats use long term leases for property, but I don't know the legal specifics.

[MrJonno]

Britain has signed up to international trade agreements on the free movement of capital and the free movement of people.

These are foundations of the massive success of the City of London, which is by far the biggest single contributor of revenue to the state.

these are important principles for driving investment and entrepreneurship. Conversely, restrictions and punitive taxation will always cause capital flight. This is not rocket science, but something that the left never seem to grasp. A golden goose needs to be nurtured so that it continues to give moderate golden eggs - not spatchcocked and barbecued to give one delicious but short-sighted meal.

property taxes are probably the stupidest taxes ever proposed. Utterly utterly dumb.

The City of London has had massive government bailout out, a significant part of it was nationalised (we are not stupid enough to bail out say a large car manufacturer and not expect owernship of it).

At the moment we have large multinational companies that apparently make zero profits in the UK and pay close to zero profits yet seem to have 1000's of shops and high share prices

[PsychoSerenity]

http://www.telegraph.co.uk/news/politic ... -rate.html

Oddly, this will be hailed as a success by some, because by the millionaires leaving, the statistics will reflect a leveling out of the wealth ratio. It will be hailed as making the country more egalitarian, despite nothing changing for most of the population.

The article provides no evidence that anyone left the country due to the 50p tax rate, it merely says "It is believed" that people left or avoid paying. And there is evidence that a huge amount of tax, HMRC say £16 - 18 billion in terms of income, was avoided by shifting the tax liability to the previous year to avoid the higher rate. The reported £7 billion in lost taxes seems quite small when you see the level of tax avoidance amongst the very rich.

But most importantly this would have been a once-only effect - but we don't yet have the tax records for the 2011/12 year, which would have been the first year with a relatively accurate record (baring other tax avoidance schemes) under the 50p rate - because the deadline for tax returns isn't until is the end of January. And now with the reduction to 45p in the budget for next year, again, significant amounts of income, and so tax liability, can be shifted to avoid the higher rate - so we will never have a full picture of how much tax the higher rate would have generated.

The article and especially the headline and title of this thread is just utter bollocks.

[Coito ergo sum]

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

Other than leaving Britain or reducing their income to below a million pounds, what alternative is there? And the title of this thread matches the headline of the article. If it's bollocks it certainly isn't "especially" bollocks.

Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.
Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.
“Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”
Mr Osborne argued earlier this year that the 50p rate was deterring entrepreneurs from coming to Britain.

[Drewish]

Cutting off the ability of foreigners to own property in your country is a great way to scare off investors. Raising taxes is a great way to encourage them to move elsewhere. Capitalism beats government every time.

[PsychoSerenity]

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

Other than leaving Britain or reducing their income to below a million pounds, what alternative is there?

Did you not read my post? HMRC said at least £16 billion in income was brought forward from the 10/11 year to the 09/10 year to avoid paying the higher tax rate that year, while maintaining the same level of income over both years. That's a reduction of well over a million pounds in income for each one of the people that have supposedly left the country in the 10/11 year. And that is the only year, with those highly distorted figures, that is being used to make these claims.

The headline is bollocks because there is no evidence that the tax rate made any millionaires leave Britain, let alone two fucking thirds of them.

[Coito ergo sum]

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

Other than leaving Britain or reducing their income to below a million pounds, what alternative is there?

Did you not read my post? HMRC said at least £16 billion in income was brought forward from the 10/11 year to the 09/10 year to avoid paying the higher tax rate that year,

Link please. I need to understand how income not realized in 2010, but anticipated in 2011 can be taxed in 2010. That's not allowed here in the US, so it's something I'd like to understand. Sounds like folks can pre-pay their taxes for 2011 by taking some of what they expect to earn and taxing at the 2010 rate. I must be misunderstanding it, because that sounds ludicrous.

[Cormac]

Britain has signed up to international trade agreements on the free movement of capital and the free movement of people.

These are foundations of the massive success of the City of London, which is by far the biggest single contributor of revenue to the state.

these are important principles for driving investment and entrepreneurship. Conversely, restrictions and punitive taxation will always cause capital flight. This is not rocket science, but something that the left never seem to grasp. A golden goose needs to be nurtured so that it continues to give moderate golden eggs - not spatchcocked and barbecued to give one delicious but short-sighted meal.

property taxes are probably the stupidest taxes ever proposed. Utterly utterly dumb.

The City of London has had massive government bailout out, a significant part of it was nationalised (we are not stupid enough to bail out say a large car manufacturer and not expect owernship of it).

At the moment we have large multinational companies that apparently make zero profits in the UK and pay close to zero profits yet seem to have 1000's of shops and high share prices

Your last sentence has nothing to do with the great of your response.

It is true to say that some companies in the City of London were bailed out, but not ALL. The flip side is the revenue generated by the city still generates massive revenue for the UK, and this should not be forgotten. ANYTHING that threatens the prosperity of the City threatens the entire welfare state.

The City is a golden goose. Roast it, or nurture it?

[Cormac]

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

Other than leaving Britain or reducing their income to below a million pounds, what alternative is there?

Did you not read my post? HMRC said at least £16 billion in income was brought forward from the 10/11 year to the 09/10 year to avoid paying the higher tax rate that year, while maintaining the same level of income over both years. That's a reduction of well over a million pounds in income for each one of the people that have supposedly left the country in the 10/11 year. And that is the only year, with those highly distorted figures, that is being used to make these claims.

The headline is bollocks because there is no evidence that the tax rate made any millionaires leave Britain, let alone two fucking thirds of them.

The only problem with this is that it will hide the stupidity of wealth taxes and hide the reality of capital flight.

It takes about three years of such taxation for the capital to leave, but unfortunately, once it has left, it will not come back to unfriendly shores. This means that there will be no liquid capital. The huge money that currently flows through London solely because of capital friendliness will simply cease. This would cause a huge evaporation of jobs from London. Downstream jobs dependent on the city will also disappear, (Shops, restaurants, bars, theatres, estate agents, bike shops, and so on), along with all the PAYE and social inurance revenues.

This would precipitate the immediate and complete collapse of the UK economy.

"Wealth Taxes" and "Property Taxes" are stupid. The only useful taxation is that which is applied when an asset MOVES.