Ignorance, ignorance

Not everyone who uses offshore vehicles is a crook. But the main takeaway from the Panama and the Paradise Papers, published again by the Guardian and media partners in November, is that the offshore industry is not a minor, shadowy part of our economic system: it is the system. The burden of taxation has moved away from multinational corporations and the rich to ordinary people. Offshore has made this happen. We – those of us who pay our taxes – are the dupes.

No, it’s the other way around., The vast majority of those who use offshore are not crooks. Instead, they’re – if they’re from the more turbulent areas of the world – those trying to protect their property from their own government. Or, as with those funds of David Cameron’s father, people struggling to make sure that people from different tax regimes can all obey those different tax regimes.

You know, they all were paying tax?

As to the burden of taxation moving away – corporation tax has never been a large portion of the economy in the first place. A few percentage points of GDP, no more. It’s been a larger portion of the tax take, true, but then that was back when the tax take was a smaller amount of GDP. And as to taxation moving away from the rich – the portion of income tax coming from the rich is at record highs in both the US and UK currently.

23 thoughts on “Ignorance, ignorance”

  1. As with the top thread the bullshit in the Gladrag is NOT IGNORANCE. It is MALICE directed at the destruction of everything worthwhile.

    All enemies of socialist evil need to counter the left’s lies with equal malice. Mistaking devils for mere fools is a massive and dangerous failing.

  2. “the portion of income tax coming from the rich is at record highs in both the US and UK currently.” Have you a reference for that, Tim? There’s a few FB ‘friends’ I’d like to bury,

  3. The burden of taxation has fallen on the majority for decades – how can it not when the State spends 40%+ of GDP? As socialists find the world over, there just aren’t enough rich people to pay for it all, so they have to create new ones.

    There’s a deeper point here though – the idea that your money is yours and you can keep it in a place where they cannot steal it. Absolutely anathema to them.

  4. UK figures (here) seem to show a pretty inexorable rise, with blips around the changes in govt and the recession, in the tax burden on the top 10, 5, & 1 percentiles.

    The burden on the 1% has risen from 21.3% in 99-00 to 28.9% in 15-16. Slightly less projected for 17-18 at 27.7%.

    US figures (here) are more difficult to parse but my quick and non-professional analysis shows a rise in tax gained from (taxable) incomes over $1m from $97 billon (1996) to $396 billion in 2015.

  5. He says:

    In May 2016, David Cameron promised a new public register that would for the first time identify the “significant” person behind a UK company. It was a start. Two months later Cameron exited as prime minister.

    As with quite a bit in that article, let’s see how “misleading” we can be!

  6. A bit more analysis on the US figures.

    The tax burden on the top 0.34% in 1995 was 21.3% of total tax take. By 2015, the burden on the top 0.31% (closest I could get, sorry) had risen to 26.7%.

  7. As far as I can work out from those HMRC figures, there’s about 900k people who earn over £100k, and they pay just over £70bn in income tax out of £173bn in total. There’s over 30m taxpayers so were talking 3% of taxpayers contributing 40% of all income tax.

    If you add in those on over £50k, that adds another 2.9m taxpayers and £40bn in tax payments. So the top eighth of tax payers pay 63% of all income tax.

    This is why I’m sanguine about a Corbyn government – We are SO dependent on a very few people to continue paying taxes here, and they are the very people who can up sticks and leave the easiest. They won’t wait to be fleeced, they’ll be on the first Learjet out of here. Its not like they won’t have other places to go either. It will collapse far faster than when socialists took over decades ago. Its not 1945 or even 1975. Modern States can’t withstand much destabilisation, it all falls apart very quickly if you frighten the horses.

  8. The Other Bloke in Italy

    PF, misleading indeed. About the middle of last year, companies had to file details of Persons with Significant Control, so Cameron’s promise was kept.

  9. TOBI

    Exactly. You have to re-read it to realise that he is acknowledging (“it was a start”) that it might have happened; rather than a more obvious message of “Cameron buggering off putting paid to the one good idea he might have had”.

    I’m always reminded, with these “journalists”, of what many of you on here have always pointed out: When they invariably talk bollocks or generally mislead on stuff that you know about, why on earth would anyone assume that they might be telling the truth or know what they are talking about on anything else?

  10. ” At least for the US, the rich’s increased share is explained by rising income inequality. In 1980, the top 1% of taxpayers earned 8.46% of the total AGI. In 2014, the top 1% earned 20.58% of the total AGI.”

    It doesn’t really matter WHY the wealthiest x% are paying such a large % of all tax, just that in cash terms they are. If you try and take too much (whatever that too much eventually turns out to be) you (ie the rest of society) lose out too, because tax revenue nosedives.

    The West has gotten itself into a situation whereby it is more and more reliant of the continued existence of the large incomes and wealth of a very few people. This is not a good position to be in. Small disturbances to the equilibrium can have massive effect on the outcome. The financial affairs of millions of ordinary people are now intimately linked to whether a few thousand billionaires decide they’ve had enough and leave. Those ordinary people are not going to thank the politician who ends up impoverishing them, because they tried to pluck a few more feathers off the golden goose.

    Its like a company that has one large customer who provides a massive proportion of the sales. Great while you continue to have the customer, not so great if they fuck off, it can finish you.

  11. “At least for the US, the rich’s increased share is explained by rising income inequality.”

    Inequality ?!?! Like one guy makes more than another? You think that’s a problem ?!?!

  12. Jim,

    The point is that this particular statistic highlights expanding income inequality. It would not have shut down Kevin’s FB friends. The assumption being these are lefty friends that can read.

    If you don’t bother to look into why the wealthiest are paying such a large percentage of the total tax burden, you’ll make bad assumptions. The linked article contains data necessary to disprove many bad assumptions. Use it, or not.

  13. Gamecock,

    I am saying that the rich are getting a much larger share of AGI than they used to. It makes sense that if they are earning more of the income, they will be paying a higher percentage of the total tax bill.

    If you see some major problem with the dramatic shift in income share that needs to be addressed tonight, please do so.

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