Gideon In Talks With Tax Havens

[R K]

http://www.bbc.co.uk/news/business-11749085

The UK is entering into talks with three tax havens, as part of moves officials hope could help raise £10bn over the next five years.

The Treasury is seeking to claw back billions of pounds in undeclared funds from British citizens.

Discussions are already taking place with Switzerland about imposing a tax on new deposits and Lichtenstein has agreed to help British officials.

The three tax havens involved in the talks have not been identified.

The Financial Times reported that Jersey, Guernsey and the Isle of Man had all denied being approached by the Treasury.

Switzerland, famous for its banking secrecy laws, is expected to introduce a tax on new deposits by British citizens.

A deal signed in August 2009 between HM Customs and Excise and Liechtenstein was aimed at targeting £3bn in offshore accounts belonging to 5,000 British taxpayers.

The government says it hopes £10bn could be brought in from the three tax havens, Liechtenstein and Switzerland between now and 2015.

Chancellor George Osborne said: "We are all in this together, and that includes those who try and evade tax. We are in the process of striking a deal with Switzerland and more deals will follow.

"In total, this will raise many billions of pounds which the previous government failed to do. This is tough but fair.

We're all in this together, unless perhaps you've got existing deposits in Switzerland and are one of Osborne's holiday chums running the Inter-Alpha banksters from behind the curtain.

I'm sure Messrs Rothschild will continue to sleep soundly in their beds.

[mel in w9]

Yes, I am sure this doesn't apply to Lord "Belize".

When I think that my husband and I pay more tax than the likes of these fellows who hide their money offshore, it really pisses me off.

Somehow I just think, "We are all in this together." does NOT apply to the Friends of Dave and Osborne.

[Eddie_George]

Yes, I am sure this doesn't apply to Lord "Belize".

When I think that my husband and I pay more tax than the likes of these fellows who hide their money offshore, it really pisses me off.

Somehow I just think, "We are all in this together." does NOT apply to the Friends of Dave and Osborne.

So they'll just put new deposits in the havens that don't sign up.

I think it should be a forum rule that he should be referred to by his birth name, Osborne from now on.

[LuckyOne]

Yes, I am sure this doesn't apply to Lord "Belize".

When I think that my husband and I pay more tax than the likes of these fellows who hide their money offshore, it really pisses me off.

Somehow I just think, "We are all in this together." does NOT apply to the Friends of Dave and Osborne.

To play devil's advocate for a minute, I think that enough people are annoyed enough by the way that the state is consuming the economy that they are doing everything that they can to protect their investments from the state.

Some are doing it by fair (read legal) means while other by foul (read illegal) means. In both cases, people are rationally considering the risk and reward of their actions.

Part of the solution lies in the way that the state acts onshore. Part of the solution lies in tracking down people who have cheated. Part of the solution lies in changing the law : The unintended consequence of this might be that some of the people who are legally minimizing their taxes will choose to leave altogether as they just cannot bring themselves to pay more than a certain amount of tax to pay for what they see as a failed state.

[Cinzano Bianco]

http://www.bbc.co.uk/news/business-11749085

We're all in this together, unless perhaps you've got existing deposits in Switzerland and are one of Osborne's holiday chums running the Inter-Alpha banksters from behind the curtain.

I'm sure Messrs Rothschild will continue to sleep soundly in their beds.

Standby one... What exactly are you pinning on the Tories here, after 13 years of a prudent party of the working people?

"Messrs Rothschild" - Mandelson's friends you mean?

[Cinnamon]

The UK is entering into talks with three tax havens, as part of moves officials hope could help raise £10bn over the next five years.

Isn't 10 billion the inconsequential sum that we generously pass on as a trivial alm to those poor countries like India etc to help them with important projects like space exploration?

[DeepLurker]

Osborne will come down on tax havens as hard as Brown/Darling did.

[alexw]

To play devil's advocate for a minute, I think that enough people are annoyed enough by the way that the state is consuming the economy that they are doing everything that they can to protect their investments from the state.

Some are doing it by fair (read legal) means while other by foul (read illegal) means. In both cases, people are rationally considering the risk and reward of their actions.

Part of the solution lies in the way that the state acts onshore. Part of the solution lies in tracking down people who have cheated. Part of the solution lies in changing the law : The unintended consequence of this might be that some of the people who are legally minimizing their taxes will choose to leave altogether as they just cannot bring themselves to pay more than a certain amount of tax to pay for what they see as a failed state.

Its got bugger all to do with annoyance or what they see as fair, zero, zip, nil, zilch. And everything to do with risk vs reward. If they currently have money hidden abroad thats costing them 12.5% tax on profits, if somewhere else opens up that charges 5% they will with absolutely no hesitation move that money to the new location. If afterward somewhere else opens up that charges zero tax they will do the same again. In neither example would they give even the slightest thought about whether their current level of taxation was fair.

For the very rich for whom the administration costs of avoidance is minimal, the only way to get them to pay tax is to make the risks high enough through increased penalities and oversight, that it outweighs any potential benefits. But as you said there is the risk that some will move offshore. However what i believe will happen is that all the major western developed nations will follow the same path, making it exceedingly difficult for them to base themselves in places that they would find hospitable, where they can at the same time avoid tax.

[wonderpup]

To play devil's advocate for a minute, I think that enough people are annoyed enough by the way that the state is consuming the economy that they are doing everything that they can to protect their investments from the state.

Some are doing it by fair (read legal) means while other by foul (read illegal) means. In both cases, people are rationally considering the risk and reward of their actions.

Part of the solution lies in the way that the state acts onshore. Part of the solution lies in tracking down people who have cheated. Part of the solution lies in changing the law : The unintended consequence of this might be that some of the people who are legally minimizing their taxes will choose to leave altogether as they just cannot bring themselves to pay more than a certain amount of tax to pay for what they see as a failed state.

Would this be the same 'failed state' in which they generate the wealth that gives rise to their tax liability?

And would you extend this right to decline taxation to all Citizens, or only the very wealthy?

[MarkG]

Didn't their last attempt to do this discover that most UK citizens with money abroad were declaring and paying tax on it? I remember when I opened my Channel Islands account I had to either prove I was non-resident in the EU or agree that they could pass on my income details to HMRC.

In addition, interest rates on offshore accounts were no better than putting the money in a high-street account and paying tax on it. The primary benefit would have been having it in a foreign currency whose value relative to the pound increased 60% over the last five years as the pound collapsed.

Edited November 13, 2010 by MarkG

[Boom Boom]

Would this be the same 'failed state' in which they generate the wealth that gives rise to their tax liability?

And would you extend this right to decline taxation to all Citizens, or only the very wealthy?

It's the old exceptionalism at work again.Having significant wealth seems to require that an individual be elevated above the laws by which the proles are bound.

[N1AK]

However what i believe will happen is that all the major western developed nations will follow the same path, making it exceedingly difficult for them to base themselves in places that they would find hospitable, where they can at the same time avoid tax.

No chance, and I'm surprised that you can't see the obvious flaw in the argument. You're talking about a typical example of game theory where if every party did the same thing the combined benefit would be higher, but where the benefit to one party acts differently they benefit more. I think the closest common example is the 'prisoner dilemma': Prisoner Dilemma

The “dilemma” faced by the prisoners here is that, whatever the other does, each is better off confessing than remaining silent. But the outcome obtained when both confess is worse for each than the outcome they would have obtained had both remained silent. A common view is that the puzzle illustrates a conflict between individual and group rationality.

In this case if all the developed countries put in place high taxation on the rich and their savings then their is a massive benefit to be gained by any of those countries that taxes less. Being the country in which all the rich choose to save (even at lower levels of taxation) will make you far more money than having the same tax as elsewhere and only your only rich people to tax.

[stormymonday_2011]

In this case if all the developed countries put in place high taxation on the rich and their savings then their is a massive benefit to be gained by any of those countries that taxes less. Being the country in which all the rich choose to save (even at lower levels of taxation) will make you far more money than having the same tax as elsewhere and only your only rich people to tax.

That rather depends on where the potential taxable liablity is generated and what credit/currency controls are in place.

The rich can indeed move overseas but they may necessarily not be able to take their income or capital assets with them.

How much of their wealth did the Russian aristocracy get out of the USSR or wealthy Jews out of Nazi Germany.

Nasty governments can make life unpleasant even for he very rich.

[MarkG]

How much of their wealth did the Russian aristocracy get out of the USSR or wealthy Jews out of Nazi Germany.

And look what happened to both of them.

The threat of currency controls is just another reason why the rich would want to have their money outside the UK... one of the reasons the rich have money in the UK is precisely because it can be moved in and out within seconds. In addition, any threat of such controls would lead to a mass outflow of money while it can still leave within seconds... this isn't the thirties anymore when moving money around took a long time.

[ken_ichikawa]

Heh Red Dwarf back in 1987 made a joke about Outland Revenue service.

2010 it turns out to be real.

Back to reality a joke in jest is turning true as well

"Betray your friends and family fabulous prizes to be won"

[LuckyOne]

Would this be the same 'failed state' in which they generate the wealth that gives rise to their tax liability?

And would you extend this right to decline taxation to all Citizens, or only the very wealthy?

It's the old exceptionalism at work again.Having significant wealth seems to require that an individual be elevated above the laws by which the proles are bound.

In the current system, some taxes are collected at source (consumption taxes, PAYE taxes etc) while some are voluntary (sometimes legally and sometimes illegally).

Anyone who chooses not to pay taxes but breaks the law in doing so should go to jail.

Those who have a globally mobile tax base are free to choose the jurisdiction to which they expose their tax base.

Money brings choice. This is probably the main attraction of money and why so many pursue it. It is also the reason why totalitarian regimes try to prevent its accumulation by anyone not in the most elite part of its heirarchy.

[R K]

Standby one... What exactly are you pinning on the Tories here, after 13 years of a prudent party of the working people?

"Messrs Rothschild" - Mandelson's friends you mean?

Yes, Osborne's friends. Mandelson's friends.

You really think it matters what colour tie Tony Blair wears or what Nick Clegg promises?

They all supp with the same devil even if they may occasionally use different spoons.

[tim123]

Its got bugger all to do with annoyance or what they see as fair, zero, zip, nil, zilch. And everything to do with risk vs reward. If they currently have money hidden abroad thats costing them 12.5% tax on profits, if somewhere else opens up that charges 5% they will with absolutely no hesitation move that money to the new location. If afterward somewhere else opens up that charges zero tax they will do the same again. In neither example would they give even the slightest thought about whether their current level of taxation was fair.

For the very rich for whom the administration costs of avoidance is minimal, the only way to get them to pay tax is to make the risks high enough through increased penalities and oversight, that it outweighs any potential benefits. But as you said there is the risk that some will move offshore. However what i believe will happen is that all the major western developed nations will follow the same path, making it exceedingly difficult for them to base themselves in places that they would find hospitable, where they can at the same time avoid tax.

This isn't about avoidance, it's about evasion.

tim