They say if you want something done, ask someone busy, which Julian Richer certainly is.
Alongside the hi-fi retailer he founded as a teenager under the arches of London Bridge in 1978, the entrepreneur runs seven non-profit organisations, including the Good Business Charter (GBC), an accreditation scheme that launches on Monday.
Baptised at 47, Richer speaks freely of his faith. He says he is motivated to do good “for Jesus”, so it is perhaps no coincidence that the charter is comprised of 10 commandments to commit companies to improving their behaviour voluntarily.
These include pledges on paying fair tax,
This all being funded by having sold the business free of CGT and income tax.
The tension at the heart of it all is this: when a multinational from one country invests or sells in another, which nation taxes its profits?
Don’t tax profits, tax incomes. Companies are legal persons, not natural ones. There’re only us natural persons here to be actually taxed – any tax lightens the wallet of a live human being. So, tax the people, not the fiction.
And to give an idea of Shaxon’s academic rigour on the subject:
These profit-shifting shenanigans cost the US an estimated $100bn a year,
Well, no, not really. The reference is to this paper. By, yes, K. Clausing again. Which is based upon 2017 tax year numbers. The American corporate tax system has already been changed by Trump – for the 2018 tax year – which massively changes how it all works.
What is it toads do?
TAXING THE RICH
Sir, Simon Pegg states that he and other well-paid people should pay more tax (Thunderer, Jan 23). Fine and dandy, but he should do it first. Whether in the US or the UK, it is possible to pay more than the legal minimum in tax. Both countries will send thank-you letters. When Pegg shows us his, perhaps we’ll listen to his calls. Until then, I’m not bothering.
Senior fellow, Adam Smith Institute
Sir, Simon Pegg is to be congratulated on his Thunderer. He should start the ball rolling: there are forms from HM Revenue & Customs that facilitate voluntary contributions. He can then let everyone know how he gets on, so as to encourage the rest of the wealthy to follow suit.
That’s not quite what I wrote but still. Elsewhere:
Matthew Lesh, head of research at the Adam Smith Institute, said: “We’ve all had enough of millionaires lecturing the rest of us about not paying enough tax.
“If these hypocrites really want to pay more, the Treasury will happily take their spare dosh.”
Quite so. And my original:
Simon Pegg (https://www.thetimes.co.uk/edition/comment/inequality-will-only-be-tackled-if-the-rich-are-taxed-more-9tnxq7rbr ) states that he and other well paid people should pay more tax. Fine and dandy – you first Simon. I pointed out in these pages in 2006 ( https://www.thetimes.co.uk/article/show-us-your-cheques-bhgb7r22vm0 ) that 5 people had paid more than their legal due to the Treasury in the previous year – and four of those were dead. Whether in the US (the “Gifts to the United States” account) or the UK (“The Accountant, HM Treasury”) it is possible to pay more than the legal minimum in tax. Both will send thank you letters – when Mr Pegg shows us his perhaps we’ll listen to his calls for people like him to pay higher taxes. Until then, well, you should but I’m not bothering as yet isn’t an attractive argument.
With statements like this no wonder they get confused:
And at the very top, among those taking home hundreds of millions each year, the tax code is actually regressive, meaning the more they make the less they pay. The richest 1% own nearly 40% of all the wealth, but pay only 20% of all the taxes.
We tax income, your income tax bill does go up the more you earn. America’s income tax system is in fact rather more progressive than that of most other places. Comparing to wealth is a nonsense as income and wealth are different things.
I don’t vouch for the numbers here but this is fun:
In 2016, the IRS reports, New York had 48,570 agillionaires (that’s someone with a million in annual income). Their average deduction for state and local taxes was $472,000. They were making mighty contributions to New York’s lavish government, that is, but not fully feeling the pain because they could deduct those contributions on their federal returns. Agillionaires in Texas, in contrast, averaged only $52,000 in state and local taxes.
With a $10,000 cap on the deduction, Trump made the difference between New York and Texas a lot more perceptible.
Still not entirely sure how deductions work but that’s still going to cause some pain, isn’t it?
How can it not?
Democrat candidates rounded on Elizabeth Warren, the new putative front-runner in the race for the party’s nomination, accusing her of being “dishonest” for not admitting her healthcare plan would raise taxes on the middle class.
And no, you can’t tax the rich enough to pay for it. There aren’t enough rich and they don’t have enough money. Private health care is, after all, some 8 or 9% of US GDP. Not even in your wildest dreams can you tax the 1% enough to cover that.
Even if you believe the “the 1% have 20%” you can’#t. Because that 20% is pre the taxes they already pay.
From the comments:
There is a potential saving for some rather than simply a time deferral.
Many people will get a tax “rate” saving. For example, gain tax relief on their pension contribution at 40% but then have their pension taxed later at basic rate, etc. Ie, few people actually earn more retired than when they are working.
Intuitionally – to coin a horrible word – I don’t think so.
Say the tax rate saving is 20%, as above. OK.
So, I put £100 into my pension now. That grows at 5% a year (yeah, I know, har har) for 20 years. Without compounding that gives me £200. I then get 5% a year off that for 20 years of retirement.
I get £200 in income and pay £40 in tax on it.
My tax saving when I put the £100 in was £20.
Maybe this particular example doesn’t actually show it, or it does, whatever. But there’s definitely some combination of investment returns, lifespan and tax rates which shows me paying more tax by having pensions deferment than not.
The IPPR says we should tax income from wealth the same as income from working. Except, obviously, Sir John Mirrlees had things to say about this. Which they acknowledge and good for them. It’s actually a rather fine piece of working out of what a tax system should be.
It has one great flaw in it. The assumption that doing it properly will raise more revenue. Properly being to do it as Mirrlees said of course. There should be a rate of return allowance. It’s only economic rents that should be taxed, not normal returns to capital.
Great, then they model the 10 year Treasury yield at 2.6%. Which, in this era of QE, it is. But as it hasn’t been outside QE. At more normal long term rates of perhaps 5% – outside excessively inflationary periods that is – the Worstall Calculator (here, simply a guess) says that such capital gains taxation would reduce revenue.
Oh, and the Mirlees rubric applies to income as well as capital gains. And we’d have to get rid of the double taxation of dividends as well. And lower the top rate of income tax.
But, you know, it’s a great report because it does get the basic economics of the discussion right. It’s just the sums it gets wrong.
The caveat is that it is highly likely that the market will adjust quickly to the new system and that sellers, far from footing the bill, will simply price it in — pushing up house prices.
Or rather, it does work this way. The price is the price, how it’s distributed between tax and seller’s receipts is a very secondary issue.
From the IFS report:
Partnership and dividend income are taxed at lower rates than normal salaries – a policy choice to tax the incomes of business owners at lower rates than employees, which therefore benefits a significant share of the top 1%.
If you add corporation tax and income tax and NI together, are dividends actually taxed less than labour incomes? There’s been so much change in rates and stuff that I no longer know….
Anyone want to do a calculation (perhaps with and without NI?) on a £1 million income taxed as partnership income, labour income and dividends?
Oh, OK, never mind. They do the calculation in the report.
Boris Johnson proposes a Worstall policy:
Increasing the starting point for national insurance contributions to £12,500
Cost: £11bn. At present people pay NICs when they earn £166 a week and income tax when they earn £12,500 a year. Johnson wants to gradually align the two systems by raising the NICs ceiling to an annual £12,500. Doing this in one go would cost £11bn a year and take 2.4 million people out of paying NICs altogether, but would still offer most benefits to those on higher earnings.
Huzzah and Gloria etc.
And how do I know it’s a Worstall policy? Because of the £12,500. That’s what the full year, full time, minimum wage was when I made the proposal. Which was my proposal – income tax and NIC should be aligned with the full year, full time, minimum wage.
Sure, inflation and minimum wage changes have moved the number on, but the policy is still living in that old form.
….and ordering Apple to pay €13bn plus interest — the biggest tax fine in corporate history — for using Irish law to cut its bill.
It’s not a fine. It’s the return of unlawfully provided state aid.
And as the EU itself points out. It’s the state that provided the aid. Therefore, if there were any fines they would be levied on the state, not the company. The company being the innocent recipient of that illegal state aid.
Revealed: the HMRC scam most likely to trick you out of your savings
Tax, that’s what the scam’s called.
Hmm? Oh, you mean scamsters pretending they’re HMRC. Oh yes, that is different then. You’ll only have to pay them if you’re stupid, they can’t claim it as of right….
Teachers and police officers will not have a national exemption from a controversial workplace parking tax agreed by the SNP and Greens, under plans lodged in the Scottish Parliament.
The Scottish Greens tabled amendments to a Transport Bill, agreed with the Scottish Government, that will allow councils to introduce the new levy.
They included a “national exemption” for hospitals and NHS properties and, following complaints from doctors and charities, specified this should include GP practices and hospices.
Blue badge holders will also not have to pay the charge but pleas by teachers and other groups that they should be extended the same privilege fell on deaf ears.
How wide should the exemption be? Politicians? Bureaucrats? Employees of vital exporting firms? Members of political parties?
So, they all pile in about Trump not releasing his tax returns. Then Beto O’Rourke, s#rising start, releases his returns for the past decade.
This is really quite glorious, Beto O’Rourke has released his tax returns and the WSJ has thus found out that he underpaid his taxes for two years, 2013 and 2014. Given the emphasis the Democrats are putting on getting Trump to release his tax returns is that the end for this little campaign? I mean, it should be, right?
Yep, it’s a technical and near trivial mistake. And yet, you know….
The archive of Tony Benn has been donated to the British Library under the acceptance in lieu scheme, allowing his family to reduce a substantial inheritance tax bill.
The enormous collection, comprising several hundred thousand documents and recordings and worth over £500,000, has been gifted to the nation.
And in a move that won praise from Conservative MPs for prudent financial management, the donation settled £210,000 in tax.
But then Tony Benn always was very careful with the family money, wasn’t he?
But now, Beefeaters from the Tower of London, Hampton Court Palace and Kensington Palace could vote to strike for the first time in 55 years in a row over pensions.
Historic Royal Palaces (HRP) employees, including Jewel House Wardens and other workers, who have been affected by the closure of their pension will be balloted on strike action from Friday, November 30, which could result in a walkout.
Unions claim changes will mean members’ final salary pensions will be replaced by an inferior plan
What is the value, as a percentage of their annual pay, of the accrual of that final salary pension?
It’ll be an eye popping number and one that rather puts the lie to he idea that the public sector is underpaid.
Alston asked a group of Glasgow kids who it is that should help those in poverty. “The rich people,” one shot back. “It’s unfair to have people earning billions and other people living on benefits.” Out of the mouths of babes.
How do you get the benefits if there are no richer people to tax to pay them?
Legal experts have accused the Government of sneaking in a new “death tax” by the back door without proper parliamentary scrutiny.
New rules will mean estates worth £2m or more pay £6,000 in probate fees, up from £155 currently. The 3,770pc increase is a reduction on the original plans, which would have meant a bill of £20,000 for the largest estates.
A “grant of probate” allows the executor to access and distribute someone’s estate when they die.
The fiercely unpopular changes have been dubbed a “stealth death tax” and a de facto increase on top of existing inheritance levies (IHT). Experts have now warned that the probate fee structure will not be thoroughly debated in Parliament, as any other tax rule changes would.
The changes are expected to be introduced in April 2019, but the rules already form part of the law, it has emerged.
Making use of a parliamentary procedure called a “negative statutory instrument”, the Government is able to write the changes into law without debate.
The procedure dictates that an amendment is made to existing legislation on the day it is announced and remains so unless a motion to reject it is agreed within 40 days.
Given the use that is made of these things – despite the entirely true case that they have positive uses – perhaps it’s time to abolish SIs altogether?
Further, the best argument against more government is what government currently does.