Tax

Spain will struggle to match Nato defence spending targets because of political divisions and the weak position of the country’s Left-wing government.

But there is another factor that is making it difficult for the country to spend 2 per cent of its GDP on its military: its booming economy.

Pedro Sánchez, Spain’s prime minister, is meeting the heads of other parties on Thursday to seek support for his objective of accelerating the 2 per cent target in response to the call from Ursula von der Leyen, the European Commission president, for an €800 billion spending rise across the EU to face the threat of Vladimir Putin’s Russia.

Spain’s buoyant economy, with GDP growing by 3.2 per cent in 2024, only makes the target harder to reach. Countries such as Germany and France are barely registering economic growth, meaning such GDP-based spending objectives are static and not such a moving target.

No, it works the other way around. Tac revenues are leveraged towards growth.

Say – just an example – you get 40% of GDP in taxes. If you get 3% of growth then you – probably, a guess – get 60% of that 3% of growth in taxes.

Because everyone’s already using all their tax free allowances, any increase in income gets taxed at full whack – and perhaps more as people are pushed up income bands. Etc, etc, across the economy as the money circulates.

The marginal tax rate in the economy is always higher than the average rate…..

Two British taxi companies have launched a crowdfunding drive for the last leg of a lengthy legal battle with Uber that could result in higher cab fares.

Uber will seek, at a supreme court hearing in July, a ruling on contractual models that affect whether VAT applies to private-hire companies outside London, which it has argued would level the playing field across the UK.

However, the minicab industry has fought the move, which it said could raise the cost of taxi journeys outside London by at least 20%.

The tossers like Jololyon insisted that Uber must pay VAT. So, righteously, Uber is insisting the cab firms must pay VAT. Spot on. Bit of a pisser for consumers but that’s Jololyon’s fault.

Since 2022, a quarter of Norway’s top 400 taxpayers have left,

Still, as a result the country is no more equal so everything is better, right?

Roman Abramovich may owe HMRC £1bn for unpaid taxes, analysis shows

We nick his £2 billion and change from selling Chelsea and then also demand tax on top?

Rachel Reeves has been accused of “asset stripping” businesses by a senior executive at the ethical cosmetics chain Lush.

Jack Constantine, the chief digital officer at Lush and the son of co-founders Mark and Mo Constantine, said the Government was “sucking” profits out from businesses with policies such as its inheritance tax raid.

Lovely, lovely, lefties.

Nononono, we didn’t mean take the money away from us rich people. You’re supposed to be nicking it from those rich people, over there.

Jack said the inheritance tax changes were “teasing assets away” from businesses.

He said: “Unfortunately for us, if you look at it, it feels as if this is effectively asset-seizing. We’re basically building the business here, and then you’re just stripping these assets away. There’s no option. There’s nothing a business can do about it. It’s out of our hands.”

But this is exactly what inheritance tax upon business assets is. We’ve got to take the money off the usefully productive capitalists to pay current benefits to our voting base.

And?

In total Britain lost a net 10,800 millionaires to migration last year, a 157 per cent increase on 2023, meaning it lost more wealthy residents than any other country except China.

A limit we might well be over…..

To remind about the Laffer Curve. It is possible to talk about a societal such curve. But it’s also true that each and every tax has its own deadweight cost. Taxing this, in this manner, over here, prevents more economic activity than raising the same sum in revenues from taxing that other thing, in that other manner, over there.

Akin, very akin, to the marginal elasticity of demand with respect to price that we all know is true in other parts of the economy. A tax change here changes behaviour – and thus the amount of activity that revenue can be skimmed off – more than one over there.

Wealth taxes are known to have higher deadweights than income, both than consumption, all three than “repeated taxation of real property” ie, land value tax. And transactions taxes have the very tippy topmost deadweights.

What this means. It is, in fact, possible to squeeze more tax out of the British economy. Other countries manage to do so out of theirs after all. But to do so requires doing what those others do as well. Abolish all those marginal in revenue terms taxes on wealth and the acqusition, possession and passing on of it. And go get the revenue from a swingeing rise in VAT and rates.

Which is, of course, a regressive tax change, not a progressive one. But then that’s also always true. You don;t get much revenue from taxing the rich because there aren’t very many of them. There’re lots of poorer people so that’s who you have to tax.

Farmers have been told by the Chancellor that they must pay inheritance tax to fund the NHS, despite mass protests planned for Tuesday.

Converting capital into current spending seems a strange way of getting to a high investment, high wage, economy.

One of the laddies around here worked in UK for 5 years, 10 to 15 years back.

He paid NI while doing so.

He thinks he can claim back the NI he paid.

I dunno but I’ve been elected to write letters, do the English, for him in his quest.

So, is this possible? If it is, how? Where does one even start?

Rachel Reeves has insisted the nation cannot afford to let all farmers continue passing on their estates without paying inheritance tax.

Independent farmers who own their own land and who are not routinely raped for wealth taxers. TYhy’d be sturdy yoemen, wouldn’t they? They’d be exemplars of the bourgeoisie in fact and we can;t have that when the project is to have all reliant upon govt – in order to give govt power over all.

“If people only live here because they pay less tax, they should f— off,” said Mr Vince, who donated £5m to Labour before July’s general election. “This is a brilliant country. There’s no way people won’t live here because of a fairer tax system.”

The thing is we’ve tried this before and the result was the brain drain. So objective reality disagrees, right?

Asked on Sky News whether “someone who works but gets their income from assets as well, such as shares and property” was a working person, he said: “Well, they wouldn’t come within my definition. I think people watching this will know whether they’re in that group or not.”

Sir Keir said his definition covered “those people who work hard and are anxious about whether they can make ends meet, and know that should something happen to them and their family they can’t write a cheque to get out of the problem”.

So, taking that strictly, anyone who hsa some savings – hell, an overdraft facility – on which they can write a cheque is not working class. So, you know, be afraid for the budget.

Reeves insists National Insurance increase won’t break manifesto pledge
Chancellor says raising employers’ contributions would stick to promise to protect working people from tax rises

That’s the tax she’s going to raise.

It’s obviously a bad tax to raise too – why do we want to tax employment? Yes, yes, that’s only the first incidence, the second is upon wages. But that first incidence is indeed upon employment. We’re narrowing the gap between what you get from going to work and the bennies you get from not going to work.

Rachel Reeves should launch a tax raid on wealthy people fleeing Britain as part of sweeping changes to capital gains rates, a leading think tank has said.

The Institute for Fiscal Studies (IFS) has called on Ms Reeves to impose an exit tax on investors moving their money out of the country, which it said would reduce incentives for them to flee.

The IFS proposals are odd, most odd. I don’t trust the two who have written them as far as the Vunipola brothers could throw them. I take their writing for the IFS as being a proof of Conquest’s Second Law.

There’s not a hope in hell of the overall proposals being accepted. Even though some of them are economically sensible.

But the effect of that overall set of changes. It would be to tax, and hugely heavily, successful entrepreneurs. And to not really tax anyone else very much. Which, – incentives, you know? – doesn’t really seem like quite the right thing to be doing.

Indeed, critics are suggesting that the VAT raid is not worth the hassle involved to raise the £1.5bn a year Labour says it will bring in.

Leading tax experts this week warned that the Government’s definition of a private school was so vague, it could cover universities, forcing them to also levy 20pc VAT on fees from January.

And try defining private education in a manner that doesn’t include universities…..

It makes me think I’m missing something because they can’t – really, they can’t – be as stupid as I think they’re being. Sadly, they’re using the usual trick of not having the report up so that people can cehck the contentions in hte press release.

Corporate tax breaks designed to encourage companies to buy new machinery and equipment are set to cost the taxpayer around three times as much as they generate, according to analysis of official forecasts.

The tax relief on new plant and machinery announced by Jeremy Hunt as chancellor in 2023 was billed as a major part of the solution to the problem of Britain’s low economic productivity. Labour supported the measure at the time and have now promised to make it permanent.

An analysis by the thinktanks Demos and Common Wealth has found that the measure, known as full expensing, will cost nearly £30bn in lost tax revenue and spur a maximum of £10.5bn in fresh investment. The Treasury says the move will generate £15bn in investment, still only half what it has cost the taxpayer.

Profits taxes are paid on profits. Profits are revenues minus costs. Investments are a cost, therefore they get taken off revenues before profit is calculated.

What changes with full expensing is *when* you can recognise that cost of the investing. You still get to take that cost off revenue to get to profit you just have to do it later if the more normal depreciation schedules are followed.

So, net revenue loss of full expensing is zero. Unless we want to start talking about the interest cost of govt borrowing they’ve got to do while waiting for the revenue.

I think – as above, I can’t check – that their trick here is to only run hte revenue collection out a few years instead of a couple of decades. That’s how they’re able to claim lower tax revenue. But to do that would be between lying and stupid. So, clearly, they can’t be doing that.

Full expensing changes when costs are recognised, not which costs are recognised.

Or am I missing something here? Is it me being ill-informed rather than they being lying bastards?

Small firms behind 80% of tax evasion

All that Spud stuff about miltinationals and offshore wsa complete crap. Obviously.

Some have already gone. The “impuesto de solidaridad a las grandes fortunas” raised just €632m in 2022, representing 0.1pc of all taxpayers in Spain.

Despite the relatively low yield, Labour’s union paymasters are already calling for the UK Government to follow suit. The Tax Justice Network claims as much as £24bn a year could be raised from the UK if it copied Spain’s model.

They’ve said they’ll copy Spain’s model but have calculated the income by not following Spain’s model. They’re to tax all the things that Spain doesn’t tax – family companies, close companies and so on.

Jus’ lyin’

But Mr Cleverly has said he would make it his ambition to go further, scrapping the “perverse” levy entirely for anyone purchasing a home, regardless of the value of the property or whether they have owned one before.

He argued this would remove blocks on older people downsizing and young families upsizing, allowing for more movement in the market.

Quite right too. Transactions taxes are a bad idea – all they do is gum up the market itself.

Abolish all stamp duty too….including the one on shares.

HMRC is understood to be checking whether all the transactions Robinson has received are donations rather than payments for services. By a quirk of tax law, donations are tax-free. If, however, he was being paid to make a video or a speech, that would count as income and be taxed.

More a feature.

Whadda Prat:

Biden has proposed a 25% tax on wealth of more than $100m, calculating that it would raise $500bn over 10 years to help fund benefits such as childcare and paid parental leave.

No, he hasn;t. a 25% tax on wealth is something that you’d get to do once and once only. His actual suggestion is that *increases* in wealth, even if uncrystalised, should be taxed like income.

That is, it taxes, very heavily, the successful entrepreneur while leaving the Scrooge McDuck piles of the already wealthy unscathed. Exactly, precisely and totally the opposite of what we’d want any tax system to do.

But then Joe is senile – whats’ everyone else’s excuse?