What is this
here for?
UK-based non-domiciled taxpayers contributed £6.57 billion in income tax in 2014/15, an average of £56,589 per non-dom over the year compared to the average of £5,152 collected from the remainder of the population. This substantial tax revenue, as well as other benefits brought by wealthy non-doms based in the UK such as …
Let me guess, Pinsent Masons is worried it will lose some of its regular non-dom clients, and shamelessly pushes its own agenda by producing a press-release disguised as a (syndicated) news article under the Out-Law brand, with one-sided quotations from its own staff, and not even a half-hearted attempt at balanced analysis. (E.g. how about comparing pennies-in-the-pound, and the break even point for tax income, comparing number of non-dom oligarchs vs oligarchs paying regular tax rates?) It would be difficult to find a better way of undermining the credibility of Out-Law articles. I wonder whether/why The Register was obliged to take this piece.
I guess this is "normal" behaviour for Pinsent Masons: even its WIkipedia entry looks like a self-penned puff piece.
They pay 10 times more income tax than the average taxpayer. But isn't their income vastly more than 10 times the average? I mean, would these people even get out of bed for £250k per annum? Shall we say, 100 times to 10,000 times the average income? But they only pay 10 times the average income tax????
@Smooth Newt: You have to get used to the fact that the uber rich don't pay tax like the rest of us. After a certain point of wealth various intricate and legal tax minimisation schemes become highly cost effective which is why they use them and we don't. Like it says in the article, they are extremely wealthy and can pick and choose where they live. Personally I would rather collect the 10 times the average from them and the potential for their lavish spending rather than nothing at all. Is it fair? No, but then neither is life in general so get used to it.
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Tax them too highly and they piss off completely.
"Too highly" means "the same as everyone else". I expect for many, spending a lot of time here is a lifestyle choice rather than a financial one, plus everyone buys goods and services from countries that we don't live in, and many also have overseas investments. Why should this group be any different?
"I guess this is "normal" behaviour for Pinsent Masons"
A little bit of work in google news will turn up a set of these articles, exclusively from Pinsent Masons and mostly in the right wing end of the press, appearing on average about every 3 months or so.
Suspiciously closely aligned to that mad end-of-quarter period all sales people know and love...
"They pay 10 times more tax than the average taxpayer. But isn't their income vastly more than 10 times the average?.."
Unless you're HMRC this is almost impossible to determine, and they're effectively banned from publishing their analysis on this (see also: economic impact of immigration). However, third-party analyses are available online (the short answer is yes). The complicating factor is that many non-doms are genuinely non-domiciled. High but unremarkable incomes, genuinely based overseas. Given the inherently complex nature of these persons' affairs, decoupling not-that-dodgy non-doms from media barons and russian oligarchs who are just taking the piss is really impossible. This is what enables bastions of the establishment like Pinsent Mason's to get away with publishing this kind of twaddle without falling afoul of ethics rules. They are, of course, the best kind of correct. Technically correct.
>A little bit of work in google news will turn up a set of these articles, exclusively from Pinsent Masons and mostly in the right wing end of the press, appearing on average about every 3 months or so.
Yep though the headline revenue figure they invent varies by a few hundred million each time - and they seem to be using the flakey IFS non-doms figure for 2012/13.
It's the kind of thing Pinsent Masons are paid to do - I guess El Reg are promoting it as part of their on-going drive to lose readers to SlashDot?
You don't need to be foreign, you can be a mega-rich British person apparently living abroad.
We don't live in a Democracy, we live in a Plutocracy. With the ruling elite kept in place by our absurd First-Past-the-Post electoral system and government determined to have the country ruled by Big Business.
the ruling elite kept in place by our absurd First-Past-the-Post electoral system
Constituency based voting isn't perfect but at least it gives the voters a choice on who is allowed to be an MP. In PR it's "The Party" which decides, the public gets to choose how many "The Party" gets but then it's up to "The Party" to fill the seats. You can't decide your MP is a crook and vote them out.
Leaving aside the need to form coalitions and the ability of minor parties who can leverage the balance of power to get their way, PR would lead to an even more corrupt system.
"Constituency based voting isn't perfect but at least it gives the voters a choice on who is allowed to be an MP. In PR it's "The Party" which decides, the public gets to choose how many "The Party" gets but then it's up to "The Party" to fill the seats. "
In theory you're right. In practice most parliamentary candidates stand as party candidates and will only be appointed as candidates if they toe the party line. So (apart from a few maverick MPs) you are still voting for "The Party" rather than a specific candidate.
"… PR would lead to an even more corrupt system."
Well, I don't like bandying that particular c-word around, but I might be tempted to apply it to a situation where getting just under 37% of the votes leads to a party getting 52% of the seats in Parliament.
Personally I wouldn't mind more coalitions as I think they _can_ lead to a steadier course, with less disruption when there's a change in government. It also gives homes to more extreme elements, which relieves the more mainstream parties of the burden of having to deal with them. I quite liked the Conservative/LD coalition, but I appreciate that I might be in a minority.
In theory you're right. In practice most parliamentary candidates stand as party candidates and will only be appointed as candidates if they toe the party line. So (apart from a few maverick MPs) you are still voting for "The Party" rather than a specific candidate.
While this is true the electorate does from time to time kick out senior party appointees in "safe seats". The most obvious example is Michael Bell beating out Neil Hamilton. I think this keeps them on their toes.
Personally I wouldn't mind more coalitions as I think they _can_ .... I quite liked the Conservative/LD coalition, but I appreciate that I might be in a minority.
Actually I'm with you on that one. Our 1 modern example of a coalition was a good thing, even if it then wiped out the LD party at the next election since many of their voters had voted against everyone else rather than for the LDs.
However I think we were lucky.
Can you imagine a Tory/UKIP or Corbinite/SNP coalition?
In many countries that routinely have coalitions extreme parties very effectively block out sensible moves they happen to be against.
In our 'democracy' a minority of votes regularly leads to an unstoppable government majority, mps that dont do their job (representing their constituents)) and governments that fail to listen or live up to promises. Part of this of course is the civil service (if I were elected I would shoot the whole lot on day 1)
However as all the mps do what the boss says we effectively only need a single dictator. As there are only ever two parties elected we could draw straws to see which dictator has the next 5 years.
The electorate don't help much... Conservatives have lower taxes despite all evidence that says no is a regular argument with my dad. Conservatives always win here so voting for anyone else is a waste is not even worth arguing about with my mum. Couldn't vote for him his suit doesnt fit is one I have also heard... frankly democracy needs intelligence and thought, it also needs people willing to look at each individual thing on its own merits... our people are not up to the task... either the politicians or the public.
"I quite liked the Conservative/LD coalition, but I appreciate that I might be in a minority."
I'm also with you on that one. The LibDem supporters thought they'd been hoodwinked, but as the minor partner had a lot less sway so coudn't push stuff through, but they were quite effective at reining in the more stringent Tory policies. Labour were pretty much useless at that point (were? I hear you say :-))
"Sadly the UK voted against the transferable vote"
"Of all the possible PR voting systems, we got that single version offered to us in the full knowledge that it would not be chosen because everyone knew it was not the one that was wanted."
Indeed, the 2011 referendum was on the Alternative Vote (AV), which is not a proportional voting system. It seems bizarre that the referendum was about switching to a voting system that the Jenkins Commission had explicitly rejected, on the grounds that it could be even less proportional than FPTP.
The Commission actually recommended the rather different AV+ additional member system, which is more proportional than FPTP while preserving constituencies. Of course we never got to vote on that far more sensible compromise. The "choice" we ended up being offered was then to keep the flawed status quo, or replace it with something potentially worse (... sounds strangely familiar...).
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@ Lost all faith...
"...if you are a rich foreigner, despite living here for 15 years, you don't need to pay the full tax rate.
But the poor plebs at the bottom of the rung do, from day 1. Got it."
Got it spot on in one, I think. Considering the hardships many have suffered over recent years I can't help thinking out-law are, at best, unreasonably sticking their neck above the parapet with a bleadin' hearts story about how the 1% may flee elsewhere with their sacks of cash if they're asked to pay 0.2% tax instead of the current 0.1%. It's amazing how much squealing these people (and companies) do (and how deafeningly loud it is!!) at the slightest hint they're not paying their fair share towards the infrastructure and society that enables them to do their thang (be it create jobs, create wealth, or just piss about in their millionaires playground).
Re the article I also pay VAT when I buy stuff. Does that excuse me from paying the full amount of income tax and NI too? Thought not.
Define "fair".
Pay for what you use? Absolutely, including paying employers NI for your personal housekeeping staff.
Subsidise those who can't afford to pay for what they use? OK, no problem.
Subside those who can afford to pay but don't want to? Fuck right off.
The "average" person who pays 5K p.a. in income tax probably pays out about 15K p.a. in all "taxes" - income tax, VAT, council tax, road tax, energy tax, insurance premium tax. Still less than the average non-dom pays in just income tax. So what do they get for their money? How is it "fair" to them? Are they burdening the NHS? Schools? State pensions?
I think you have your neurons in a twist...
If income is not earned in this country, and not brought into this country, why should tax be paid in this country?
Of course they will pay tax on UK earnings, and as shown they contribute a hell of a lot more than the average domiciled earner.
High taxation will just push money out of the country, not draw it in!
Taxes are too high as they are, a 45% rate is idiotic and encourages money laundering and tax evasion, even the 40% is stupid... it just pushes up the higher earners/managers rates, reducing money available for the average (i.e. easily replaceable) workers
Poor plebs? the plebs as you call them are more the problem than the rich are...
We will never have a fair society while we have plebs.. Education is the only solution to the crisis in this country, and it will take 2 generations to fix after we fix the schools (they are so bad I will not send my kids to a state school, even if I have to keep working 14 hours a day to fund a private education)
"We will never have a fair society while we have plebs.. Education is the only solution to the crisis in this country, and it will take 2 generations to fix after we fix the schools (they are so bad I will not send my kids to a state school, even if I have to keep working 14 hours a day to fund a private education)"
I suspect that you'd be better off moving to an area with a decent state school reducing your hours and spending more time with your kids... In the long run they will benefit more from that than the slightly better education* that they get at a private school.
* I have friends who went to private and state schools and you wouldn't be able to tell them apart based on looking any aspect of their lives...
* Additionally: I also have another friend who worked as an assistant at a few private schools before she started uni. She regularly created the lesson plans and took classes without the teacher present... Thats an unqualified, teenager (at the time) teaching subjects that she barely scrapped a C grade GCSE in...
> If income is not earned in this country, and not brought into this country, why should tax be paid in this country?
Address this question to the US tax authorities, who sent Boris Johnson a bill for capital gains tax on a house he sold in the UK. As I understand it, USians owe tax to Uncle Sam wherever they are in the world, though they can offset local taxes against their US tax liability. BJ was selling his home, so UK capital gains tax didn't apply.
Alien, obviously -->
@ Jonny Calcutta: Was there a point there? Are you saying that their tax contribution which is orders of magnitude greater than many others, does not matter so send them and their money somewhere else?
Oh great, that means I will have to pay even more tax, will you?
His point was the stat was useless - mega rich people pay more tax than poor people. I understand the nuances of the argument the article is making and I still agree with Jonny Calcutta that the stat was ridiculous.
What if we show the stat that the rich pay more tax than both the mega rich non-doms and the poor which is likely to be the case and therefore we should cut taxes and provide loopholes for the rich. Or just consider that many people visiting this site pay more tax than the poor, therefore **insert argument about helping them pay less tax here**.
Their tax contribution isn't "orders of magnitude greater" at all. It's a tiny fraction of the money they make. The tax system works on percentages, those that earn more are supposed to contribute more.
A bunch of selfish greedy people leaving the country isn't a bad thing. The idea that industry and business will stop if they leave is laughable.
A bunch of selfish greedy people leaving the country isn't a bad thing. The idea that industry and business will stop if they leave is laughable.
All well and good until they're gone and you realise that:
Yeah, that'll be wonderful then, so glad you've single-handedly solved the economy.
They're not going to take their company away just because they're made to pay more personal income tax; they exist to make money, and if there's money here they will exploit it.
And as others have said, what's unfair about them contributing a percentage of the money they earn in this country back into it? We do.
So if these selfish greedy bastards leave, I assume you'll be happy to pay much, much more tax to cover the shortfall?
I assume from the giant chip on your shoulder that you pay less tax that it costs for the state to take care of you ( the NHS alone costs £3k/year per person ).
that means I will have to pay even more tax
That doesn't follow. It's just as much a fallacy as saying that industrialisation or immigration destroys jobs.
There is now plenty of evidence that societies that are more equal are happier and have stronger ecomonic growth. Even the FT ran a piece a couple of years ago entitled A more equal society will not hinder growth. You are ultimately worse off if a dependence on this income stream results in lower long-term, sustainable growth.
It's also an extremely transient opportunity. Rather like reducing corporate tax rates, it's a race to the bottom to see who's willing to be bought off for the lowest price. And it leaves no actual economic legacy.
The quickest way to increase tax revenues and economic activity is to push up the minimum wage. Offering safe haven to a bunch of dubious oligarchs is not only immoral, it's economically illiterate.
That doesn't follow. It's just as much a fallacy as saying that industrialisation or immigration destroys jobs.
Not sure that it's on the same level, but there's no certainty that everyone's taxes would go up without the high-earner tax revenues. There are a lot of public policy options that could be implemented, given that there's various types of tax increases, potential spending cuts, or some measure of both. All of which provides it's own clusterfuck of political theatre for all to enjoy. Sigh.
There is now plenty of evidence that societies that are more equal are happier and have stronger ecomonic growth.
I think this is a chicken-or-egg problem. That research assumes that equality came first. There's competing research that shows economic growth came first. Again, it devolves into political theatre that really does make my head hurt at times.
It's also an extremely transient opportunity. Rather like reducing corporate tax rates, it's a race to the bottom to see who's willing to be bought off for the lowest price. And it leaves no actual economic legacy.
This really needs some context. If tax rates are too high, lower rates can induce economic growth (and tax revenue growth) on their own. Think the 90% top rate of the US until the 1960s (and their revenues leapt after JFK pushed through tax reform). But in the case of corporate taxes, the problem is more complicated since corporations don't pay taxes; only people do. So corporate taxes are really taxes on employee wages/benefits, shareholder returns, etc. Frankly, it's right there with completely, unilateral free trade in it's universal benefit to all. All capital taxation is far more economically harmful than virtually every other type of tax (excepting any sort of transaction taxation, which is the worst kind).
The quickest way to increase tax revenues and economic activity is to push up the minimum wage.
Virtually no research shows this to be the case. Minimum wage legislation is a net drag when above about 50% of the median wage, and virtually no impact below it. No one in their right mind would ever say that we could increase tax revenues and economic activity if we could just raise the price of things. Labor is not different in this regard.
Offering safe haven to a bunch of dubious oligarchs is not only immoral, it's economically illiterate.
Completely agree, but not for your stated reasons. Providing a stable and just system of law absolutely provides a direct economic benefit (as we've known since Adam Smith). Providing a method for the politically well-connected to extract economic rents from everyone doesn't really benefit anyone but to those crony-capitalist bastards who have the political connections and to the politicians that continue to get elected through the help of their crony-capitalist supporters. Indeed, fuck them both with a hot poker.
It's just as economically illiterate to assume that all high income earners are crony capitalists, which isn't your point but it certainly seems to be the point of most taxation arguments calling for "soaking the rich", as though most income is ill-gotten at the expense of the middle and lower classes (which it isn't).