As we get braver we should also aim to tax all those unrealised gains – so if a billionaire’s wealth rises, they pay tax on that annually, whether or not they sell (or “realise”) assets. Some powerful Democrats in the US are now pushing for just this.
Sigh.
So where does the money come from to pay taxes on unrealised gains? The gains must be realised, right?
Jeff Bezos gave umpteen billion to the ex Mrs Bezos. So the state would have had to give him a massive tax rebate on his reduced wealth, right?
aaa in comments.
Quite so, if rises in uncrystalised wealth are to be taxed – the current insistence – then losses should generate rebates.
ProPublica’s bombshell report on America’s super-wealthy paying little or nothing in taxes reveals not only their humongous wealth but also how they’ve parlayed that wealth into political power to shrink their taxes to almost nothing.
Jeff Bezos, the richest man in America, reportedly paid no federal income taxes in 2007 and 2011. Elon Musk, the second richest, paid no taxes in 2018. Warren Buffett, often ranking number 3, paid a tax rate of 0.1% between 2014 and 2018.
The real scandal is it’s legal.
Wealth and power are inextricably connected. The super-rich have bought armies of lobbyists to keep their taxes minuscule and to create and maintain tax loopholes large enough to drive their Lamborghinis through.
This talk of loopholes and avoidance.
America has never had a tax system which taxes those uncrystalised capital gains. So what loopholes, what tax avoidance?
HMRC has been charging too much tax:
HM Revenue & Customs has refunded millions of pounds to taxpayers who paid its controversial loan charge.
But only a fraction of those who applied for a refund have so far received any money, meaning hundreds of taxpayers face a longer wait for their cash to be returned.
The taxman has so far refunded, or waived, £3.6m to 50 taxpayers who paid the loan charge, at an average of £72,000 each, a Freedom of Information request submitted by this newspaper has revealed.
And here’s the bit:
The remuneration schemes, which were legal at the time,
So HMRC has been charging taxes, unlawfully, on something that was entirely legal? That benevolent state idea is looking a bit iffy, no?
The European Commission suffered an embarrassing defeat in its court battle with Amazon on Wednesday, after EU judges cancelled Brussels’ order that Luxembourg recoup about £215m in back taxes from the US tech giant.
The victory for Amazon is another setback for Margrethe Vestager, who leads the EU’s powerful competition authority and had accused Luxembourg of signing sweetheart tax deals with the company that amounted to illegal state aid.
At the heart of the case is a simple concept. Were the rules special for Amazon? If yes then maybe it’s state aid and thus illegal. If no, if other companies could achieve the same deal, then it’s not state aid and is just the normal ability of a country to decide its own tax rates.
As with the Apple and Ireland result – so far – the courts are finding that it’s not special to the specific company therefore isn’t state aid. All very simple indeed.
Charity donations soar as thousands dodge inheritance tax
All gifts to charitable causes are tax free. However, someone can cut the inheritance tax rate paid by their estate by donating more than a tenth of your worldly possessions to charity. This discounts the typical 40pc rate to 36pc on assets over the £325,000 tax-free threshold.
As an example, if your taxable estate is worth £250,000, you would be faced with an IHT bill of £100,000, leaving your family with £150,000. By giving away 10pc – £25,000 – to a registered charity, the tax bill would drop to £81,000, leaving your family with £144,000 following the donation. Although heirs lose £6,000, the charity is £25,000 better off.
What’s a “dodge” about obeying the tax law?
Treasury Secretary Janet Yellen says a ‘shocking’ $7 trillion in taxes is going uncollected
No, she didn’t say that much is going uncollected – and it’s over a decade too.
“It’s really shocking and distressing to see estimates suggesting that the gap between what we’re collecting in taxes on current tax and what we should be collecting — if everybody were paying for taxes that are due — that amounts to over $7 trillion over a decade,” Yellen said in an interview with The Atlantic published on Tuesday.
She said that it’s shocking to see estimates that it’s that much. This is a different statement.
Not sure. A brief reading of the Biden tax plan suggests – suggests – that dividends should be taxed like other income.
So, 28% corporate income tax, then 39.4% individual income tax. That is, remove the 15% dividend tax rate.
So, taxing dividends twice is going to be the same rate as once, is it?
A Connecticut middle school teacher who raised $41,000 to help hundreds of his struggling neighbors during the COVID-19 pandemic got an unwelcome surprise for his charitable efforts: a form stating he could owe $16,031 in income taxes.
Louis Goffinet, 27, of Mansfield, began picking up groceries for elderly neighbors afraid to go to the store during the early days of the pandemic, often spending his own money. Given the great need, he later organized two fundraisers on Facebook over a year and helped hundreds of families with groceries, rent money and holiday gifts, the Hartford Courant reported, setting a $200 limit.
The grifters in government always want their slice, don’t they?
The committee report is now out:
79. Tim Worstall, Fellow of the Adam Smith Institute, was concerned about the nature of
a wealth tax, in that it would tax wealth accumulated in the past. He told us:A retroactive tax is an appalling idea. It is akin to theft. Roy Jenkins did
this in the 1960s. He retroactively imposed a 130% tax at the top end of
capital incomes on the previous tax year that was already closed. That is
just appalling behaviour. However much Government need the money, that
is just not what we should be doing. Tax, just like any other form of law,
should be: “It starts today. If you do not agree with it, you can change your
behaviour in the future to avoid it and not do the activity [ … ]88
The charity TaxWatch tells me that the Department for Work and Pensions prosecutes 23 times more people for benefit fraud (usually small sums) than HMRC prosecutes tax frauds (often vast), a quiet ticking off for wealthy tax cheats, the slammer for often penniless benefit offenders.
Perhaps it’s actually more people doing benefit fraud than tax evasion?
His company’s tax savings, now Ratcliffe has moved to Monaco, have been estimated at £4bn.
She backs this up with a reference to Baron Sikka of all people.
And you’d think that someone might have grasped. Where Jim Ratcliffe lives changes where Jim Ratcliffe pays taxes. Where Ineos is incorporated/resident, changes where Ineos pays taxes. Where you pay taxes of course makes a difference to the amount of tax you pay.
But where Jim Ratcliffe lives and pays taxes does not change where Ineos is resident and pays taxes. Because they are different legal persons with different residencies, see?
So it is said at least. Why should children benefit just because they won the lucky sperm club thing? And yet inheritance tax is also the most hated of all taxes:
What’s your financial priority for the years ahead?
I’d like to keep working for as long as I can, so that the wealth I accumulate can benefit my children.
Things do tend to get done to benefit children. That’s rather how the species works.
That is, those who say that inheritance tax is the best tax are those who haven’t met than many humans.
If I ran into a fortune by chance, I’d want to find a way to use it productively, and after setting some money aside for my children,
Ratcliffe, as a result of the taxation of his money made at Ineos, is a tax exile.
The Grenadier is to be built abroad.
An interesting thought about tax rates that are too high. Tax an entrepreneur out of the country then whine about his new factory not being in the country.
This would require a new tax on property sales and a levy on the freeholders which own many cladding-hit blocks. It also proposes additional taxes on non-dom and foreign buyers. From April, overseas buyers will pay a 2 percentage point stamp duty surcharge and the report said this should be increased further.
Let’s tax foreigners living in foreign countries was indeed a joke, not a plan.
He is getting rather overheated:
“If the minimising of Indian tax revenues is ‘standard’ for British investors, that’s not a justification, it’s a condemnation,” said Alex Cobham, the chief executive of the campaign group Tax Justice Network. “India needs its tax revenues for schools and hospitals. We must hope that the chancellor himself is committed to the progressive taxation of wealth and top incomes, or the UK will only see the deepening of the stark individual, racial, gender and regional inequalities that the pandemic has laid bare.”
This is about people investing in India through Mauritius. Entirely and wholly legal by the way. And which does reduce Indian tax payable in the event of a profit.
So, the defence is? Well, investment in India benefits the Indian economy. A reduction in tax upon the success of an investment increases the likelihood and amount of investment. Thus offering tax breaks – whether they be to foreign investors directly, or by double taxation treaties of this type – thereby benefits the Indian economy.
The correct people to be making this decision – whether to offer such breaks or not – are the Indian government. Not colonialists like Alex Cobham.
Cobham would no doubt start to insist that Kim Clausing proved that this doesn’t work. As Kim Clausing has expressely and specifically denied she has done.
For those who have difficulty following the point – or are Cobham or Murphy, but I repeat myself – if corporate taxation changes the amount of investment that is done then the above at the top point about changing taxation changing the volume of investment is true. Clausing showed that she can’t see any change in the amount of investment as a result of changes in corporate taxation. Then goes on to agree that the reason for this is that investors are already not paying those local corporate taxes because they use offshore, double taxation treaties and the like. Therefore we cannot see the change in investment as a result of changes in tax because the tax isn’t biting upon the investment.
One way to try to ensure compliance and prevent avoidance would be to announce a one-off tax to be applied retrospectively to wealth held at a given moment in the past, then demand payment over the next five years.
But Tim Worstall of the Adam Smith Institute said this would be “akin to theft”.
He said: “Taxing people today on what they earned last year, changing the law on them, I regard as an appalling breach of civil rights.”
Magnus Henrekson, the head of Sweden’s Research Institute of Industrial Economics, points to the country’s lack of any form of wealth tax as a key motivation for entrepreneurs to make and keep their money.
Sure, without a wealth tax there’s more incentive to become wealthy. But there are many places without a wealth tax and not all of them have a start up scene like Sweden.
CGT at 30% when income tax can top 60% (including social charges) might be an incentive. No inheritance tax so dynastic fortunes can be created might help. Being a more free market economy than the UK or US could be a boost too. But the absence of a wealth tax? Naah, that’s too common a feature.
Donald Trump maintains a bank account in China where he pursued licensing deals for years, according to a report that could undermine the president’s election campaign claim that he is tough on Beijing.
Tax records reviewed by the New York Times showed a previously unreported bank account in China controlled by Trump International Hotels Management. The account paid $188,561 in taxes in China between 2013 and 2015 in connection to potential licensing deals, according the newspaper.
Earlier reporting by the Times showed he paid just $750 in US taxes in 2016 and 2017.
If the NYT actually thought about this they’d realise that the taxes Trump paid in China come off his US tax bill…..
The announcement of his non-prosecution agreement on Thursday came as prosecutors brought tax charges against Robert Brockman, a Houston billionaire whose money launched Mr Smith’s private equity career in 2000. Mr Brockman denies the charges against him
So, anything interesting you can tell us that might help with your sentencing then?
As prosecutors indicted Mr Brockman in a $2bn personal tax evasion case that is the largest of its kind in US history, they said that Mr Smith would face no charges for his scheme to evade taxes by hiding some of his Vista Equity profits offshore. In return, he had agreed to continue co-operating.
Sorry, how do you spell that? Mr. B..r…o…c…..OK got the rest of it. That’ll help.