Err, yes?

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…..

Well, umm, yeah, you know?

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.

Not the most ridiculous of policies

If you were Chancellor, what would you do?

I would simplify the tax system so there were no ways to get out of paying tax. I’d raise the threshold at which you start paying income tax and make everyone pay the same standard rate – probably around 30 per cent.

I think the Government would make more tax revenue overall because there would be fewer tax dodgers. Also, by raising the threshold, more people on low incomes would be taken out of tax, so I think it would be fairer.

Indeed, I recall a proposal from Madsen of exactly this – well, near exactly, the tax rate was 33%.


In June Rishi Sunak, the chancellor, said that the coronavirus crisis had made tech giants even “more powerful and more profitable” and that they needed “to pay their fair share of tax”.

However, The Times has learnt that Amazon, whose total British tax bill last year was £293 million on sales of £13.73 billion, will not have to pay the levy on goods it sells itself. Instead it will have to pay the 2 per cent charge only on revenues it receives from third-party sellers that pay to use its marketplace platform.

The tax is upon platforms. So as not to tax the online sales of, say, John Lewis. So, Amazon charges it on use of the platform and not in its sales.

Doesn’t make sense

So, the tax gap.

The Government’s claim that £31billion of taxes go uncollected each year is based on a misleading algorithm created for the American tax system, it can be revealed.

Revenue & Customs is now working on major changes to the calculation which could see the figures altered radically – up or down.

OK, interesting.

But there is disquiet that the use of US software could be giving a very misleading picture as America and Britain have quite different tax systems.

In the US, almost everyone fills out their own tax return, in contrast to Britain’s PAYE system that taxes salaries before money is transferred to bank accounts.

Idiocy. You think they don’t have withholding in the US?

Blimey, Snippa gets one right

Tax Research UK founder Richard Murphy says this will be the “easiest tax on Earth to pass on”, as the tech giants like Facebook, Google, and Twitter are “effectively monopoly suppliers”.
“The reality is those platforms are unique and they can therefore pass the cost on if someone wants to advertise with them,” he says.
This stems from the fact the tax is on revenue, instead of profit. “This is essentially a sales tax levied on top of VAT on these companies and what we know about this form of sales tax is that it’s passed straight onto the consumer,” Murphy says.

So it is possible for him to grasp tax incidence then.

Now all he’s got to do is apply the same corpus of knowledge to corporation tax….

Quite so, quite so

Capital gains tax, actually all taxes on investment, should be abolished. The correct taxationsystem is:

He said the IFS had long called for the introduction of an “average rate of return allowance”.

Because here’s the thing. We like investment, investment makes the future richer. It’s what makes the future richer. As we also know, tax something and you get less of it. So, don’t tax investment to make the future richer.

And yet economic rents should be taxed. Normal returns to capital not, but “excess profits”, stuff earned by having a corner or a privilege, should be and harshly.

So, distinguish between that normal return on capital (say, the average return in the economy, something like 3 to 5% real, currently this is horribly depressed by QE but in normal times not far off normal long term gilts yields perhaps) and such excess returns. Tax the latter and not the former.

This now accords with best theory – optimal taxation theory, Mirrlees and all that – and also solves the political problem. The plutocrats get taxed and the average saver not so much.

But then just because something is sensible doesn’t mean it will become policy.

Well, no, not really

Google’s UK staff took home an average of £234,000 last year on the back of £441m in share-based payouts at the search giant.

The company’s UK business saw its total wage bill rise to more than £1bn for its 4,439 UK employees – an increase on the £829m earned by staff in 2018.

However, the company’s tax charge for the year fell from £65.6m to £44.3m. Around £10.6m in taxes were deferred.

The only logical manner of calculating the tax charge is “What is the tax charge on this activity?” – not which legal person or entity is nominally responsible for which bit of the tax bill. We do know that tax incidence exists after all.

Of that £billion in wages some £300 to £400 million will have gone in tax, no?

Christianity has been learnt well here then

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.

To answer Nick Shaxson’s question

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.

Problem solved.

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?

Letter in The Times

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.
Tim Worstall
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.
Anthony Moffoot

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 ( ) 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 ( ) 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.

Yours etc

Ho hum

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.

The effect of Trump’s tax cuts

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?

Of course govt healthcare means higher taxes

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.

A thought on pension tax relief

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.

Fair enough

If you were Chancellor what would you do?

Reduce income tax rates for everyone. I think they’re too high at the moment.

Higher earners should carry on paying a bit more than lower earners, but I think all taxpayers should pay less.

Bruce Foxton of The Jam.