Now Ritchie\’s advocating slavery!

Another report from Ritchie today.

First we propose that everyone who has a UK passport should be tax resident
in the UK, automatically, wherever they live in the world. That means they
would always have liability to pay tax in the UK on their worldwide income,
gains and wealth, just as all US citizens do in the USA.

How d\’ye like them apples? You are to be, wherever you live in the world, a helot to HM Treasury.

This is
especially true of those who have long term ties to the UK and who have the
right to reside here permanently but who seek to avoid their obligation to pay
tax in exchange for that right.

Yup, just the right of residence in the UK means you should be paying tax in the UK. You could be born in The Bahamas, grow up, live, work, marry and die there, but if you\’ve the right of residence in the UK (say, through inheritance) then Ritchie says that you should be paying tax in the UK.

The fact that a person has the
right to reside in the UK and make use of all the facilities it has to offer –
whether they do so or not – is what establishes the obligation to pay tax.

That you don\’t use the NHS, education system, roads and the rest matter naught in Ritchie world. You\’ve got money and the State should have it!

Tax
is not after all a payment for services supplied: tax is the price we pay for
having the right to live, work and participate in a state, whether we avail
ourselves of that right, or not.

See?

This provides a giggle though:

Firstly, and perhaps most importantly, this briefing suggests that the domicile
rule should be abolished with regard to taxation. This historic legal
anachronism, which is discriminatory in origin and practical outcome, should
have no place in a modern tax system. It is quite unacceptable that an accident
of birth should alter a person’s UK tax liability when all other matters are
identical.

Erm, isn\’t being born with the right to British nationality, residence, simply an accident of birth? Meaning that he\’s just contradicted everything he\’s suggesting above about the passport method of determination?

Finally, he talks about the money these changes will raise. Ah, but he\’s forgotten, he\’s forgotten that he\’s just abolished domicile. There\’s no certainty that there will in fact be any money raised by this at all.

Take me as an example. I\’m not resident in the UK. I am, however, almost certainly domiciled. I\’ve not yet bothered to take up my right to an Irish passport so almost certainly am, despite having been out of the country for what, 18 of the last 20 years?

So I\’ve no income tax arising in the UK….however, the UK, me being domiciled, will indeed take an interest in whatever might be in my will when I pop my clogs. Taking me into the income tax net (given his exemptions, especially for EU countries, where he\’s got no alternative than to exempt) but taking me out of the domicile net would be a money loser, not gainer.

This is the problem with getting the tax system redesigned by a retired small time (his practice was dealing with the affairs of luvvies and musicians) accountant.

18 thoughts on “Now Ritchie\’s advocating slavery!”

  1. I can imagine the outrage that would follow when all the tin-pot dictatorships start calling in tax money from any of their citizens – most of whom are considered such for life regardless of what the individual does – who live in the UK. i.e. those Zimbabwean refugees we just let in getting a twenty grand tax bill from Mugabe, who says “Well, Britain does it!”

  2. Just started watching Dispatches on tax havens. I decided in advance it would be bollocks if Ritchie made an appearance. Sure enough, he appeared, got one sentence in saying tax havens are at the expense of the rest of the world, and I turned it over to the far more worthwhile Ray Mears.

  3. I just can’t get over what an unreconstructed fascist the man is, for all his abuse about right wing critics. If you’re born in a country, he argues, you’re owned by that country and nothing is your inalienable right. Louis 14th would have whistled through his teeth in appreciation.

    We’ve got rid of absolute monarchs and their claim to ownership of their subjects. Tax is just money paid for services, by citizens and by consent, not a due exacted by a totalitarian state.

  4. Quite funny this:

    “The fact that a person has the
    right to reside in the UK and make use of all the facilities it has to offer –
    whether they do so or not – is what establishes the obligation to pay tax”

    For this makes every EU citizen subject to UK tax. And, of course, assuming that the same wise principle be applied everywhere in the EU, makes every EU citizen subject to tax in all 27 member states….

  5. I am no Ritchie fan – indeed I loathe the man and his politics – but I do have some sympathy with the view that the UK’s rules on tax residence and tax domicile are increasingly anachronistic and unfit for purpose.

    It strikes me that a better solution than Ritchie’s would be to abolish the dom/non-dom rules and tax people on the basis of residency. That’s the way most EU countries do it.

  6. I watched the very one sided Dispatches earlier and whilst trying to stay awake couldn’t help noticing how ill Richard Murphy looked (even worse than his new photo).

  7. “For this makes every EU citizen subject to UK tax. ”

    Well yes – I am a dual EU and Australian citizen, also with the right to an Israeli passport which I haven’t taken up, plus as far as I know I could get Polish, German and Hungarian passports based on the complex WW2 history of my family. I assume that it wouldn’t be worth working at all once all these states have had their cut?

  8. I was born in England in 1935 but I have been resident on Australia for 50 years. Still English though ( that was the deal when I came out)
    But if I upset some of their laws I could get deported back ( a fairly recent change)
    Would i get a bill as well?

  9. It’s largely irrelevant when Richie discovers another method of taxation or another reason to tax someone, he still doesn’t grasp the basic ideas of whether tax of a particular type is needed at all.

    To Richie, more tax is always better, so he’s already ignored the bloody obvious historical fact that this is not always the case.

  10. Of course what the Great Dim Bulb fails to mention (probably out of sheer ignorance) is that while U.S. citizens are taxed on their worldwide income, there are foreign income exclusions, foreign housing exclusions, foreign housing deductions, as well as foreign tax credits available to said taxpayers who qualify.

  11. Quite frankly it is a difficult question whether this man’s stupidity is or is not exceeded by his evil. Both faculties loom large in him. He manages the difficult position of being simultaneously fool and knave.

  12. Do U.S. citzens have to do this (exemptions or not?) and if so do we think they live in slavery? I’ve never thought that about the US before, but now I think about it I remember a right-wing US commentator (maybe on the ‘corner’) saying US income tax was worse than slavery, so maybe that is the general view.

    Tim adds: I have, repeatedly, said that that is the one part of the US tax system which I think is morally repugnant. That it is tantamount to all US citizens being helots of the State. So I’ve certainly not changed my tune.

    Trust Ritchie though, when looking for something to poach from other tax systems, to find absolutely the most objectionable part of said system to poach.

  13. Ian, yes, to Ritchie more tax is better, but that’s not all that’s driving him.

    He needs a system that involves both of the following:

    1) lots of snooping. The idea of having someone trawl over Guy Hands’ travel records (to see how long he has been in the UK in a year) sends him drooling.

    2) plenty of work for tax officials. He is a mouthpiece for their union, and will never advocate a tax system (no matter how high the rate) that involves easy collection and low surveillance. The ‘lots of snooping’ thing does create a lot of work.

    And if HMRC is to be trailling the world for 80 year old Aussies or Kiwis who are entitled to a British passport due to a British grandfather, it will require a lot of manpower. See his threatening tone in the comments – ‘they’ll be in for a shock when they arrive’ type threats.

    Awful.

    Question is: why is the TUC getting involved in this issue? It has nothing to do with workers rights and seems ultra vires from its own objects, and as such, if funds have been used on this exercise, a misuse of its funds.

  14. You missed the classic Ritchie trick. He says: “Tax is not after all a payment for services supplied: tax is the price we pay for
    having the right to live, work and participate in a state, whether we avail ourselves of that right, or not. These rules recognise that fact.” it’s the “fact” that is his signature – the assertion, the assumption, that he hangs his argument on without defending or explaining, and that he refuses to engage in discussion about – anyone challenging him will be dismissed as “wilfully obtuse” or evil or something, but he won’t argue. And what a howler it is. Horrible.

  15. This is all part of the bootstrapping towards slavery built into Welfarism and Socialism that the Fabians so love.

    I have an idea for Ritchie. How about…shock horror…we pay as we go, eh?

    If we had an insurance based healthcare system the argument for that would evaporate.

    If we had a defined contribution, personalised pensions and unemployment insurance mechanism, then that, too, would deal with it.

    If Universities were not subsidised, then that, too would solve the problem.

    Education of minors is a little trickier, but still, most of the reasons for the State owning your ass would evaporate if the State did not barge into so many sectors with menaces, violence and coercion.

    This is similar to the arguments over eating and smoking. First they secure a monopolistic beachhead, then they demand control.

    Unless we have an opt-out, we are indeed slaves, or at best indentured servants.

  16. David Gillies:

    In general, most knaves are fools (it’s virtually foolish to be a knave); it’s just that there are few who show the foolishness quite as prominently or predictably. That’s one of Ritchie’s redeeming features: you can rely on him to fuck up.

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