Clegg\’s idiotic tycoon tax

The Deputy Prime Minister says he has uncovered evidence that hundreds of millionaires are paying a tax rate of less than 20 per cent on their earnings by using an “army of lawyers and accountants”.

In an interview with The Telegraph, Mr Clegg indicates he is willing to support the scrapping of the 50p top rate of income tax provided that millionaires are “properly” taxed in Britain.

A wide array of tax loopholes and reliefs are exploited by the wealthy to reduce their tax bills, leading to them paying overall rates on annual earnings beneath those faced by ordinary workers, he said.

Mr Clegg, who will be at Saturday\’s Liberal Democrat spring conference in Gateshead, believes that thousands more millionaires pay tax at a rate of less than 30 per cent, depriving the Exchequer of hundreds of millions of pounds a year.

He believes that a specific minimum rate of tax should be written into law

Dear God the man\’s a twat isn\’t he? This is just the US Alternative Minimum Tax. Something which, as we know, doesn\’t actually work very well.

But the important point here is that all those loopholes are written into the tax law by Parliament. Film finance, whatever. They\’re there because Parliament thinks that getting money spent on those things (special tax rates on angel investments for example) is worth the revenue lost.

Now, if you think there are too many of those loopholes then get rid of the loopholes: you\’re the people in Parliament, this is something you can already do.

Clegg, you fool, you\’re the Deputy Prime Minister. You already have the ability to get these loopholes swept away: so if that\’s what you want to do, get on with it.

10 comments on “Clegg\’s idiotic tycoon tax

  1. He wants the votes from complaining about the problem not the actual responsibility of dealing with it. Many if not most of your readers will be very sympathetic to tax simplification (loophole removal).

  2. Lawyers and accountants would be very unhappy with tax simplification- it would put them out of work. They’d prefer every perceived problem be addressed with further complications.

  3. “Many if not most of your readers will be very sympathetic to tax simplification (loophole removal).”

    I’m sure this is right. But then two years down the road of a simplified tax system someone suggests that it might be a good idea if the UK film industry or forests or biotech start-ups were supported and that giving people a tax break to invest in these would be a good way of doing it…….

    And you’re back to where we are now.

    I’d like a bit more detail on Clegg’s claims that 100s of millionaires are paying less than 20% tax on earnings. I presume he doesn’t mean someone in a £1m house, cash in bank earning 0.5% interest and a £30k pension.

  4. There are two major problems with the tax system in the UK now. 1. It is FAR too complex. 2. They keep changing it.

    The effect of this is that those who can best afford financial advice and are in a position to take advantage of that advice can reduce their taxes.

    Government makes loopholes and then acts surprised when people push income through them. Then they close loopholes while making more. If they didn’t make and break loopholes then they wouldn’t get lobbied and enjoy getting lobbied to create them.

    Perhaps it’d be better to have just one Finance Bill per parliament. Set duty rates, tax rates, etc for a five year period and then leave it alone.

  5. I’ve always believed that there is surely a point that someone has contributed enough to society through tax. I’m not entirely sure at what point that might be but I’m inclined to feel that if you cough up, say, 10 million quid to the goverment you have really done your bit, irrespective of how much you earn. If there was a maximum tax limit I suspect that a lot of millionaires would flock to the UK, happily write a cheque for 10 million each year and voluntarily contribute to society in many other ways.

    If the state needs more than 10 million from one individual I suggets the problem is on the expenditure side of the ledger, not the income side.

  6. Lot of trouble with the whole subject is the way it’s looked at. Particularly by the media. Of course if you talk percentages, a millionaire paying 20% compared with Mr Average looks unfair.
    Try looking at the money.
    Mr Average pays a few thou & gets in return a few thou’s worth of services provided by the State. Mr Big pays £200,000 on his mil & uses hardly any of the costly ones. Country’s way in front on Mr Big. Where exactly is the problem with that?

  7. I don’t think that loopholes are “written into the tax law by Parliament” (as per Tim W) or that the Government “makes loopholes” (as per Gareth). Rather, loopholes arise because they involve structures unforeseen by the legislators -well, nobody’s perfect.

    Film finance is a good example. The problem there was not in the tax advantage itself, but in the fact that the original legislation was so loosely phrased that abuse (whatever that means) abounded.

  8. The real issue here, and you see it in black and white on the lefty forums, is that Clegg and his ilk don’t want the law to be applied universally. They want the loopholes in the tax laws to apply to some people but not others, and without abandoning the concept of universal application of the law (something I’m sure the likes of Ritchie would have no issue with) it is impossible to achieve.

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