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Two-Thirds Of Millionaires Left Britain To Avoid 50P Tax Rate


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Higher taxes mean less revenue. Tax wealth creators and they will bugger off and take their incomes, jobs and investment with them.

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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.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.

However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis.

Last night, 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.”

http://www.telegraph.co.uk/news/politics/9707029/Two-thirds-of-millionaires-left-Britain-to-avoid-50p-tax-rate.html

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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.

Propaganda.

A fall in the number of people declaring an income of £1m does NOT mean they have left the country. It just means they have got better at avoiding tax.

What Brown also did earlier on (2008?) was reduce CGT from 40% to 18% and this encourages people to divert income to Capital Gains.

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Higher taxes mean less revenue. Tax wealth creators and they will bugger off and take their incomes, jobs and investment with them.

-

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.

[...]

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

[...]

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.”

This is incredibly misleading. The only facts underlying that article are 1.) there were 16,000 declaring incomes of more than £1million before the introduction of the 50p rate and 2) there were 6,000 declaring incomes of over £1million the year it was introduced. Everything else is just speculation. The comments on the Telegraph article appear to have come from either sock puppets from the right wing of the Tory party or from right wing think tanks, none of whom address the misleading nature of the article.

There appears to be no evidence at all that any of the 'missing' 10,000 have left the country. It may be that the people earning high incomes from whatever sources actually earned less that year (unlikely in such high numbers) or that they indulged in clever accounting treatment to reduce their taxable income, or carried out tax avoidance strategies. But, yes, some may have left the UK, but the author(s) of the article seem to have no way knowing - if they had any evidence, you can bet they would have shared it.

The article provides no basis for saying that the UK has lost £7billion. What they have probably done is look at how much a 'millionaire' pays in tax (impossible to assess from the figures provided above - someone earning £3million pays a lot more tax than someone earning £1.1million) and multiply this by 10,000, because 'these people have all clearly left Britain and they are all clearly paying no tax at all any more."

The idea that, if people have taking aggressive tax avoidance steps as a result of the 50p rate, they would suddenly unwind these arrangements if the top rate was brought back down to 40p is also a bit silly.

But no, it seems that all the commentators on the article are either blind to these flaws or just hope that no one else will spot them, instead just RAGING about the need to cut taxes and the state. For what it's worth, I also believe that large parts of the state need to be cut, but this article is just insulting claptrap.

And finally: the undue focus on incomes rather than wealth is a real problem. Just because you earn a lot doesn't mean you are rich. This is part of the bias in reporting which is intended to favour those who are already asset rich at the expense of those who are bright, work hard and earn money, but who missed out on the '97-2007 asset price boom.

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This is incredibly misleading. The only facts underlying that article are 1.) there were 16,000 declaring incomes of more than £1million before the introduction of the 50p rate and 2) there were 6,000 declaring incomes of over £1million the year it was introduced. Everything else is just speculation. The comments on the Telegraph article appear to have come from either sock puppets from the right wing of the Tory party or from right wing think tanks, none of whom address the misleading nature of the article.

There appears to be no evidence at all that any of the 'missing' 10,000 have left the country. It may be that the people earning high incomes from whatever sources actually earned less that year (unlikely in such high numbers) or that they indulged in clever accounting treatment to reduce their taxable income, or carried out tax avoidance strategies. But, yes, some may have left the UK, but the author(s) of the article seem to have no way knowing - if they had any evidence, you can bet they would have shared it.

The article provides no basis for saying that the UK has lost £7billion. What they have probably done is look at how much a 'millionaire' pays in tax (impossible to assess from the figures provided above - someone earning £3million pays a lot more tax than someone earning £1.1million) and multiply this by 10,000, because 'these people have all clearly left Britain and they are all clearly paying no tax at all any more."

The idea that, if people have taking aggressive tax avoidance steps as a result of the 50p rate, they would suddenly unwind these arrangements if the top rate was brought back down to 40p is also a bit silly.

But no, it seems that all the commentators on the article are either blind to these flaws or just hope that no one else will spot them, instead just RAGING about the need to cut taxes and the state. For what it's worth, I also believe that large parts of the state need to be cut, but this article is just insulting claptrap.

And finally: the undue focus on incomes rather than wealth is a real problem. Just because you earn a lot doesn't mean you are rich. This is part of the bias in reporting which is intended to favour those who are already asset rich at the expense of those who are bright, work hard and earn money, but who missed out on the '97-2007 asset price boom.

Also, of course, it could be a case that Entrepreneurs who were taking a huge amount of cash out of their businesses decided to take less out and invest more to build up the capital value.

One thing I've never seen is a comprehensive breakdown of who paid the 50p rate. I suspect a fair number would be financial services (state supported), legal profession (state supported closed shop), top(sic.) public servants/council bosses, etc.

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Sounds about right. The jealous and feckless do not consider that to be important. For them, it' all about justifying stealing other people's money and labelling it fair.

What a crock.

I am definitely no lefty but this is a Tory propaganda piece, so deliberately misleading it's damned close to outright lies, the other posts in this thread have outlined why.

In the fat times I have legally shifted income between years and between different types of income to be more tax-efficient, unless you're a PAYE salary earner there's nothing easier. Anyone earning enough to have an accountant will be doing it.

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Sounds about right. The jealous and feckless do not consider that to be important. For them, it' all about justifying stealing other people's money and labelling it fair.

Fair enough. Lets push all the tax burden onto PAYE slaves, and let them pay for the "State" and its stable legal and social framework which allows these "millionaires" to make so much money.

In fact lets cancel all taxes for the rich, they obviously don't need the State, the Police, the Judiciary, education system, military and so on. Sure the plebs can pay for all that.

Edited by Secure Tenant
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Fair enough. Lets push all the tax burden onto PAYE slaves, and let them pay for the "State" and its stable legal and social framework which allows these "millionaires" to make so much money.

the people on middle income always bear the burden because the super rich are exempt from tax.

The middle income folks are getting a big subsidy at the moment when you consider what our budget deficit is. If they balanced the budget they would need to raise tens of billions to pay for the current government unless spending is radically cut, where do you think they're going to get that money from ?

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the people on middle income always bear the burden because the super rich are exempt from tax.

The middle income folks are getting a big subsidy at the moment when you consider what our budget deficit is. If they balanced the budget they would need to raise tens of billions to pay for the current government unless spending is radically cut, where do you think they're going to get that money from ?

being rich doesnt exempt you from tax.

You pay tax on income...not on what you own...although, that will change as the state becomes ever more destitute and continues to pay itself whatever it deserves.

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Propaganda.

A fall in the number of people declaring an income of £1m does NOT mean they have left the country. It just means they have got better at avoiding tax.

What Brown also did earlier on (2008?) was reduce CGT from 40% to 18% and this encourages people to divert income to Capital Gains.

I'm pretty sure Capital Gain's have to declared on your tax return, the fact is they're getting less tax returns from millionaires or millionaires have reduced their incomes accordingly, working less and legally avoiding what they can.

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being rich doesnt exempt you from tax.

You pay tax on income...not on what you own...although, that will change as the state becomes ever more destitute and continues to pay itself whatever it deserves.

The super rich are exempt from tax because they structure themselves in such a way as to avoid it. 'Sir' Phillip Green for example lives in Monaco with a lot of other uber rich people, Switzerland is also a favoured (low-tax) domicile

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I'm pretty sure Capital Gain's have to declared on your tax return, the fact is they're getting less tax returns from millionaires or millionaires have reduced their incomes accordingly, working less and legally avoiding what they can.

or maybe they own property...much of which has declined in value.

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Lewis Hamilton moved to Switzerland as not to pay the UK treasury anything on his estimated £20m/year earnings. I think he'd probably pay around 20% tax there. clever lad.

Good old Bernie Ecclestone structures everything through Lichtenstein trusts.

The super rich do not pay taxes.

Edited by punter
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Lewis Hamilton moved to Switzerland as not to pay the UK treasury anything on his estimated £20m/year earnings. I think he'd probably pay around 20% tax there. clever lad.

I thought he lived where ever his team were racing...

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I thought he lived where ever his team were racing...

Although on the road for significant times of the year he bases himself in Switzerland, probably has his bank account there and an agreement with the government to pay 15-20% in taxes which is quite common there among foreign nationals.

Edited by punter
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.. Tax wealth creators and they will bugger off and take their incomes, jobs and investment with them...

Having a lot of money does not make you a 'wealth creator'. What 'wealth', for example, does the Duke of Westminster, Britain's richest man, create? None. He just charges people for rent on land acquired by his ancestor through marriage to the 13 year old daughter of a cabbage farmer. The rich=wealth/job creator meme is nonsense cooked up by right wingers in the USA.

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Harriett Baldwin ‏@HBaldwinMP

Labour's tax cull of millionaires also in the @telegraph Link tweeted by stupid woman

Two-thirds of millionaires left Britain to avoid 50p tax rate..........

Nick F ‏@CrookedRed

@HBaldwinMP So 10,000 millionaires went abroad; absolutely no-one employed tax avoidance measures. #youwouldhavetobesimpletobelievethis

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Having a lot of money does not make you a 'wealth creator'. What 'wealth', for example, does the Duke of Westminster, Britain's richest man, create? None. He just charges people for rent on land acquired by his ancestor through marriage to the 13 year old daughter of a cabbage farmer. The rich=wealth/job creator meme is nonsense cooked up by right wingers in the USA.

a lot of these people ARE wealth creators, small and medium sized businessmen etc. they employ people and make capital investments. If they all collectively do less of that then due to punitive taxation the economy suffers.

The Duke in your example also makes large capital investments like Liverpool One which cost £1bn to develop. That's a good use of his funds wouldn't you say?

Edited by punter
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It's a laff eh?

Or maybe not. Who can really say what happened during those turbulent, volatile times to earnings? What if you shifted out of zooming gilts and into to bombed out stocks? What if you lost your bonus?

Edited by Sledgehead
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What all these "High earners" should do is move to Monaco or a special island (a bit like Whicker Island in Monty Python) and only make money from each other. They could open little shops and just trade among themselves, make their own laws up and pay no tax.

Edited by Secure Tenant
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  • 433 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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